The Supreme Court is considering a case involving a couple’s $14,729 tax bill, which questions whether the federal government can tax “unrealized” gains from investments.
The Moores were required to pay taxes on their share of a foreign company’s earnings under the mandatory repatriation tax, leading to a dispute over the interpretation of the 16th Amendment.
This case has broader implications for proposals targeting wealthy households, including Biden’s billionaire minimum income tax. (Trending: Joe Biden Admits He’s ‘Not Sure’ About Running If Trump Wasn’t)
Some argue that the outcome could challenge the concept of taxing unrealized gains, while others have expressed concerns regarding the potential implications for the U.S. Tax Code.
“If the bright‐line rule requiring realization for an income tax to be imposed were jettisoned, then there would be no limit to the types of taxes the federal government could enact. Indeed, such a rule would open the door for the federal government to impose a future wealth tax entirely divorced from any connection to actual income,” the filing read.
“I’m not for a wealth tax, but I think if you use this as the argument to spike a wealth tax, you’re going to basically get rid of, I don’t know, a third of the tax code,” former Republican House Speaker Paul Ryan said.
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