The Biden administration is currently facing some major issues with the Supreme Court, particularly concerning taxes on the wealthy.
The government’s plans to tax the wealthy may soon be overturned in light of the court’s recent ruling that President Joe Biden’s $430 billion transfer of student debt was unlawful.
Moore v. United States could have a great impact on the president’s plans for a wealth tax, as well as other cases such as those involving gun rights and federal agency authority.
President Joe Biden has frequently expressed his desire for a wealth tax, which includes taxation of capital gains that are currently not taxable.
He proposed a 25% annual tax on all gains above $100 million per year, including unrealized capital gains.
This proposal faces strong opposition from Republicans in Congress, but it could be completely stopped if the Supreme Court rules that such a tax is unconstitutional.
Moore v United States is highly important because it deals with taxation and definition of “income” according to the constitution’s apportionment clause- meaning that stock gains cannot be taxed by the federal government unless stocks are sold off first.
Charles and Kathleen Moore sued to get their repatriation tax refunded after they had invested near $40 thousand into an Indian company back in 2005 and never received payments from them despite their profits every year since then.
If this case goes through, it would mean that future wealth taxes would be off limits at a federal level- something progressive leaders like Bernie Sanders and Elizabeth Warren have spoken out against numerous times before now.
Thomas Berry from Cato Institute suggests Democrats should instead focus on raising traditional income taxes or imposing tariffs rather than trying for this wealth tax again.
However, he also states there is no way to predict what the justices will decide yet either way when hearings start about whether unrealized capital gains should count as income or not.