Will John Roberts’ Supreme Court Use This Tax Case to Defend the Constitution or Empower the IRS?
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Will John Roberts’ Supreme Court Use This Tax Case to Defend the Constitution or Empower the IRS?


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Today, the US Supreme Court is set to hear a case that has the potential to derail the “billionaires tax” proposed by Joe Biden – but no one is talking about it. Charles and Kathleen Moore of California were taxed on their profits they didn’t even receive in a way that violated the 16th Amendment.

In 2005, they invested $40,000 in an Indian business called KisanKraft, and were promised 13% of the shares. Despite KisanKraft becoming profitable, Charles and Kathleen never received a single dollar in income, but were still expected to pay a $14,729 tax bill when the Tax Cuts and Jobs Act of 2017 was passed.

Article 1, Section 9, Clause 4 of the Constitution states that “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.” Since this tax is direct and not apportioned among the states, many believe it to be unconstitutional. To further prove this point, the Court in the 1920 case of Eisner v. Macomber ruled that income must be “clearly realized” for it to be taxable. This ruling sets precedent that the 2017 bill goes against.

The Moores sued the federal government, claiming the tax violated the 16th Amendment, but lost in both district court and the Ninth Circuit. However, the US tax code has since moved away from its relation to the Constitution, as other taxes on unrealized income are prevalent. The biggest example is partnership tax law, which states that partners are to be taxed on income allocated to them for tax purposes whether they actually receive the income or not.

Most importantly, if the Court rules in favor of the Moores, it could have huge ramifications for Biden’s proposed ‘billionaires tax.’ Biden wants to implement a 20% tax on unrealized capital gains, which would affect households with over $100 million net worth.

If the Court rules in the Moores’ favor, it is possible that Biden’s proposed tax would not pass. It is important that the Court recognizes that words should have meaning, and that taxing people on money they haven’t made is immoral and ultimately unconstitutional. This case is a chance for the Court to prove that it still honors the black-letter words of the Constitution

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