• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Economy Supreme Court appears wary of massive tax code overhaul
Economy

Supreme Court appears wary of massive tax code overhaul

by December 6, 2023
by December 6, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

A Washington state couple’s nearly $15,000 tax bill was debated by the Supreme Court on Tuesday, in a case the Biden administration says could have ‘far-reaching consequences,’ potentially costing the government more than $5 trillion.

At issue is whether Congress has authority to tax people and companies for sums that have not yet been received, or ‘realized,’ as income.

The current case may be relatively small in scope, but the high court was told its eventual ruling could have an enormous impact on taxing the wealthiest Americans who shield their earnings through a variety of investment loopholes.

SUPREME COURT DISMISSES CASE IMPACTING ACCESSIBILITY INFORMATION ON HOTEL WEBSITES

In a lively two hours of oral arguments, the high court heard claims that its decision would cause financial chaos, upend much of the federal tax code, and derail a so-called ‘wealth tax’ that has been promoted by some Democrats, but has not yet been enacted.

The justices appeared cautious about issuing a sweeping ruling, and instead seemed ready to uphold the current tax on unrealized foreign income.

‘We don’t have to agree with you on that for you to prevail,’ said Justice Brett Kavanaugh on the implications of a sweeping decision, telling Solicitor General Elizabeth Prelogar that the government could win on narrow grounds.

‘Why is it that you think we can decide for you without putting any of those kinds of very established taxation schemes at risk?’ Justice Elena Kagan asked the lawyer for the investors.

Charles and Kathleen Moore, a retired couple from Redmond, Washington, are challenging taxes on their 13% minority shareholder stake in KisanKraft, an Indian corporation that supplies power tools to small farms in that Asian country.

The married couple says the company reinvested its earnings to expand the business rather than distribute dividends or payments to its stakeholders, and therefore should not be considered taxable income.

‘If you haven’t received any income, how can you be required to pay income taxes?’ Charles Moore says in a video from the Competitive Enterprise Institute, a libertarian group representing the couple in court. ‘It seemed, to both of us, unconstitutional.’

The specific provision in question was part of a massive 2017 corporate tax overhaul passed by Congress and signed into law by then-President Trump.

A one-time levy – known as the ‘mandatory repatriation tax’ – is imposed on deferred earnings of American shareholders in foreign corporations, even any gains that have not been ‘realized’ or passed on to them. It was imposed as an offset to other tax benefits.

SUPREME COURT HEARS ARGUMENTS IN $6 BILLION PURDUE PHARMA SETTLEMENT THAT WOULD GRANT IMMUNITY TO SACKLERS

The IRS says that provision could reap the government $340 billion over ten years.

The provision was designed to address one of several workarounds investors have relied on for years to access unrealized investment property, before receiving it and paying taxes on it.

Groups supporting the government say while the Moores may not have received any actual money, their initial $40,000 foreign investment has increased over the years to more than a half-million dollars.

More broadly, groups like the U.S. Chamber of Commerce supporting the Moores’ situation say this case could be applied as a preemptive strike against any wealth tax on the assets of the richest Americans, including stocks that are only taxed when they are sold.

Senator Elizabeth Warren (D-Mass.) has championed such a tax for years. Just last week, Senate Finance Committee Chairman Ron Wyden (D-OR) led a group of 15 fellow Democrats to introduce the Billionaires Income Tax.

And President Biden has suggested a version of a ‘billionaire’s tax’ on U.S. households worth more than $100 million to pay a minimum of 25% on capital gains each year, whether those assets were sold for a profit or still held by them.

But none of the justices publicly expressed enthusiasm about venturing down that path, suggesting any consideration of a wealth tax or other IRS provisions is off the table.

The arguments focused instead on how a narrow ruling could be crafted, with Justice Sonia Sotomayor saying, ‘I don’t fault the parties for shooting for the stars but I guess the tenor of the questions is that nobody’s happy with anybody’s definition of anything, okay?’

The Moores’ appeal prompted one of the largest series of amicus briefs filed with the high court from a variety of interest groups and lawmakers.

Concerns were expressed over how a ruling would affect other longstanding tax provisions – including business partnerships, real estate investments, and charitable and philanthropic donations.

An underlying ethics question has dogged the Supreme Court’s consideration of the tax case.

Senate Judiciary Committee Democrats urged Justice Samuel Alito to recuse, because lawyer David Rivkin representing the Moores also co-conducted four hours of Wall Street Journal opinion page interviews with the justice.

Alito in a four-page statement in September refused to step aside.

‘There is no valid reason for my recusal in this case,’ he wrote. ‘We are required to put favorable or unfavorable comments and any personal connections with an attorney out of our minds and judge the cases based solely on the law and the facts. And that is what we do.’

Alito was an active questioner in the Moore case.

This post appeared first on FOX NEWS
You Might Also Like
  • Vance says his mission at GOP convention speech is ‘to fire up the crowd tonight’
  • US imposes new round of sanctions on network involved in Iran’s drone production
  • Biden’s Venezuela policy feeds Maduro strongman image, emboldens dictator in election controversy: Rubio
  • Trump medical report released as Biden faces concerns over age, health
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Speaker Johnson hits back at House GOP critics in closed-door meeting
next post
How and where to watch Donald Trump’s town hall with Fox News’ Sean Hannity

You may also like

Judge blocks Illinois law targeting crisis pregnancy centers, calling it...

August 6, 2023

Louisiana debates special legislative session to address insurance crisis

January 18, 2023

US approves F-16 fighter jet sales to Turkey and Greece:...

January 27, 2024

VP Harris appears to commit another gaffe in climate change...

July 15, 2023

Desantis, Haley, Ramaswamy, sitting side-by-side, get personal during ‘family discussion’...

November 18, 2023

Comer and MTG confront DOJ on whether Hunter Biden violated...

September 9, 2023

Top senator assails Biden for letting heroin users off easy...

July 14, 2023

Americans identifying as socially, economically conservative hits highest point in...

June 9, 2023

America under Kamala Harris would be unsafe and unaffordable for...

August 9, 2024

Republicans probe EPA on why East Palestine waste sent to...

March 2, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past...

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    SafeMoon and Litecoin: SafeMoon is holding...

    September 13, 2024

    Kaspersky security software is banned in...

    June 23, 2024

    New Hampshire showdown: Why Trump is...

    January 23, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here