This page provides a summary and links to relevant briefing by both sides in the litigation including amicus briefs. Read selected additional commentary illustrating the range of tax system participants concerned about the potential outcomes of the case.
"Supreme Court" by Mark Fischer is licensed under CC BY-SA 2.0.
On December 5, 2023, the U.S. Supreme Court will hear oral argument in Moore v. United States, a case in which petitioners have asked the Court to find that Congress’s power to tax income under the Sixteenth Amendment extends only to “realized” income. This case challenges the constitutionality of the mandatory repatriation tax (MRT) (section 965 of the Internal Revenue Code) enacted as part of the 2017 “Tax Cuts and Jobs Act” signed into law by President Trump. The Tax Cuts and Jobs Act made major changes to the way that the U.S. taxes foreign profits made by U.S. companies. To transition to the new system, the law required U.S. shareholders who owned at least ten percent of U.S.-controlled foreign corporations to pay a one-time tax on past foreign profits that the companies had held offshore, which had not yet faced any U.S. tax under the old system. The petitioners invested in a foreign corporation, and by 2017, their share of the company’s profits was more than $500,000. Based on their share, the petitioners paid about $15,000 in tax under the MRT. They argue that the MRT is unconstitutional as an unapportioned tax on unrealized gain. This guide summarizes the central and distinctive contributions of each amicus brief in this case (including those in support of the Moores, in support of the government, and in support of neither party).
We have previously explained how a Supreme Court ruling for the petitioners could result in a windfall for large multinational corporations and could dismantle or unsettle wide swaths of the tax code, including fundamentals of the tax system that have been on the books for decades and were built on a bipartisan basis. The petitioner’s case is built on an incorrect characterization of section 965, which in fact taxes income that has been realized at the corporate level.
Given the high stakes for the tax system and the petitioner’s misinterpretation of the relevant constitutional and tax law, the Tax Law Center collaborated with other tax experts on a brief. In doing so, the Tax Law Center joins an “unusual alliance” of tax professionals, states, bipartisan former officials and congressional staffers, legal academics, historians, business groups, organizations, and individuals weighing in about the mistakes that underpin the petitioners’ case and the inherent dangers therein.
Links to briefs of the Parties
Petitioner (Moore) merits brief
Respondent (U.S.) merits brief
Petitioner (Moore) reply brief: due November 15, 2023.
Amicus Brief Summaries
I. Briefs Supporting the Government
Briefs Providing Conservative or Bipartisan Perspectives
- George A. Callas and Professor Mindy Herzfeld
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George A. Callas and Professor Mindy Herzfeld
This brief—filed on behalf of two amici: one, a former congressional staffer who, as of 2017, served as Senior Tax Counsel for then-Speaker of the U.S. House of Representatives, Paul Ryan; and the second, an international tax law scholar and practitioner—explains that section 965 taxes realized income and that it is consistent with longstanding congressional practice and power. Further, the brief explains that section 965 is not a new tax but rather a provision that Congress used to end a deferral. The brief then describes how ending this deferral was an integral part of Congress’s 2017 reform of the international tax system. Holland & Knight is counsel for this brief.
- Tax Economists
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This brief—filed by five tax economists who are affiliated with the American Enterprise Institute—argues that instead of reaching the constitutional meaning of income, the Court should find that section 965 is a constitutional indirect tax. The brief explains that if the Court instead imposes a constitutional realization requirement, it could destabilize the tax system and the economy. Perkins Coie LLP is counsel for this brief.
Briefs Providing Tax Practitioner Perspectives
- American Tax Policy Institute
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This brief argues that the case is not about whether there is a realization requirement, but about whether income realized by an entity can be taxed to its current (or former) owners. It explains why Congress has been regarded as having the power to tax this income and shows how Macomber is no bar to this conclusion. Finally, the brief describes provisions of tax law that could be called into question by a decision in favor of the petitioners. Adler & Stachenfeld is counsel of record.
- American College of Tax Counsel
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American College of Tax Counsel
This brief—submitted on behalf of an association comprised of tax lawyers in private practice and government, as well as tax scholars—argues that an originalist interpretation of the Sixteenth Amendment is consistent with the imposition of tax on shareholders of a foreign corporation with respect to undistributed corporate earnings not otherwise subject to U.S. federal income tax. This brief explains that it is unnecessary for the Court to address whether Eisner v. Macomber imposes a constitutional realization requirement as the income was clearly realized in the petitioners’ case and Macomber addresses the issue in an entirely different context which is distinguishable from the petitioners’ situation. This brief further discusses the background of section 965 and explains why it is a tax on income and not a tax based merely on ownership of property. Finally, the brief alerts the Court about the negative consequences, including the spawning of much litigation, of a broad opinion in favor of the petitioners. Proskauer Rose, LLP is counsel for this brief.
Briefs Providing Business Perspectives
- Main Street Alliance, Small Business Majority, and Anne Zimmerman
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Main Street Alliance, Small Business Majority, and Anne Zimmerman
This brief—filed on behalf of two national small business groups, as well as Anne Zimmerman, business owner, and co-chair of Small Business for America’s Future—emphasizes the inability of small businesses to deal with the uncertainty that would follow from a ruling in favor of petitioners. The brief points to small businesses operating on thin margins and relying on predictability in the tax code to plan their budgets and ensure their ability to comply with their tax burdens. Further, the brief argues that a ruling for the petitioners would introduce long-lasting uncertainty around many provisions of the tax code, beyond and including those that affect small businesses. Democracy Forward Foundation is counsel for this brief.
- L.E. Simmons
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This brief—filed on behalf of the founder of an energy investment firm—argues that section 965 is constitutional as a tax on income realized by a company not taxed at the entity level under U.S. law. The brief further contends that while the Ninth Circuit reached the right result, its holding was wrong because both the Sixteenth and Fifth Amendment preclude the taxation of unrealized capital gains. Schertler Onorato Mead & Sears is counsel for this brief.
Briefs Providing States’ Perspectives
- States of Arizona, California, Colorado, Connecticut, Hawai’i, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Vermont, Washington, and the District of Columbia
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This brief—filed on behalf of Arizona and fifteen other states, as well as the District of Columbia—argues that section 965 is neither a threat to state tax bases nor to the balance of federal-state power, as it is consistent with prior income tax regimes that have taxed undistributed income. The brief explains that, in fact, this challenge to section 965—and more broadly, to Congress’s ability to tax realized but undistributed income and to its agility to respond to new tax avoidance schemes—hurts states. This is because states receive a significant portion of their revenue from the federal government, often have income taxes tethered to the federal tax code (and in some cases, to section 965), and often rely on the federal tax system for administrative support. The Arizona Principal Deputy Solicitor General is counsel of record for this brief.
Briefs Providing Academic Perspectives
- The Tax Law Center at NYU Law and Professors Ari Glogower, David Kamin, Rebecca Kysar, Darien Shanske
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This brief—filed on behalf of the Tax Law Center and four tax law scholars—explains that the real question presented in this case is not whether taxation of income requires realization, but instead, whether Congress may attribute income realized by a corporate entity to its shareholders and assess a tax based on their pro rata shares. It also explains that in relying on Macomber to argue that the answer to that question is no, the petitioners’ theory contravenes a century’s worth of judicial decisions and congressional enactments. Gupta Wessler LLP is counsel of record for this brief.
- Professors John R. Brooks and David Gamage
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Professors John R. Brooks and David Gamage
This brief—filed on behalf of two tax law scholars—examines the original meaning of “taxes on incomes” in the Sixteenth Amendment, demonstrating that unrealized profits and gains were understood to be taxable as “income” at the time of the Amendment’s drafting and ratification. Specifically, the brief makes three basic points: (1) in 1913 and for half a century before that, federal law, judicial precedent, and administrative decisions all treated unrealized gains, including a shareholder’s portion of undivided corporate earnings, as taxable income; (2) as was generally understood at the time of its drafting and ratification, the purpose of the Sixteenth Amendment was, by eliminating any focus on the source of the taxed income, to restore Congress’s broad income-taxing power (which had included taxing unrealized gains) that existed before Pollock; and (3) dictionaries and treatises from the ratification era further confirm that “income” was understood to be an extremely broad concept that could include unrealized profits and gains. The Constitutional Accountability Center and Professor Brooks are co-counsel for this brief.
Note: Brooks and Gamage are co-authors of Moore v. United States and the Original Meaning of Income, Fordham Law Legal Studies Research Paper No. 4491855 (revised Oct. 11, 2023), and “From Whatever Source Derived”: The Sixteenth Amendment and Congress’s Income Tax Power (Oct. 8, 2023).
- Professors Reuven Avi-Yonah, Clinton G. Wallace, and Bret Wells
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Professors Reuven Avi-Yonah, Clinton G. Wallace, and Bret Wells Bret Wells
This brief—filed by three international tax law scholars—argues that requiring realization will wreak havoc on the Federal tax system, including the Subpart F regime, taxation of partners in partnerships, mark-to-market rules, original issue discount rules, and other rules that generally protect the income tax base. It explains that there is a well-settled consensus that realization is a policy choice, and indeed non-realization rules are a necessary element to a functioning income tax. Further, existing non-realization rules include basis adjustments so that income tax is imposed only one time. Imposing a realization requirement will render some income untaxable. Kostelanetz LLP is counsel of record for this brief.
- Professors Donald B. Tobin and Ellen P. Aprill
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Professors Donald B. Tobin and Ellen P. Aprill
This brief—filed by two tax law scholars—has two key purposes. First, it describes the intellectual and political context from which the Sixteenth Amendment emerged to show that the meaning of “income” at the time was not limited to realized income. Second, it explains that policy issues related to specific income tax statutes enacted by Congress from time to time must not be confused with issues regarding the power granted to Congress by the Sixteenth Amendment. Professors Tobin and Aprill are co-counsel for this brief.
- Professors of Tax Law, Legal History, and Computational Science
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Professors of Tax Law, Legal History, and Computational Science
This brief—filed by a set of academics who study tax law, legal history, and computational science—argues Macomber was wrongly decided and should be overturned. It explains that originalist arguments offered by petitioners’ amici, purportedly based on corpus linguistics methods, are deeply flawed and unpersuasive. The Georgetown Institute for Constitutional Advocacy and Protection is counsel of record for this brief.
- Professors Bruce Ackerman, Joseph Fishkin, and William E. Forbath
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Professors Bruce Ackerman, Joseph Fishkin, and William E. Forbath
This brief—filed by three constitutional law scholars—argues that Pollock was wrongly decided; the dissenters were right. It explains that the American people, with the Sixteenth Amendment, decisively rejected Pollock and sided with the dissents. It urges the Court not to repeat the mistake of Pollock by using the direct tax clauses to invent novel restrictions on Congress’ taxing power. It argues that, to the extent that there is really a constitutional argument in this case, rather than a policy argument, the Constitution weighs in favor of enabling Congress to fulfill its duty to construct an equitable and broad-based tax system. Ahmad, Zavitsanos & Mensing PLLC is counsel for this brief.
- Professor Theodore P. Seto
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This brief—filed by a partnership tax law scholar—explains that realization is a form of event-based accounting that is divorced from economic income, and that although realization is sometimes used for mechanical reasons, a constitutional realization requirement would undermine the ability of Congress to collect an income tax that accurately measures income. The brief argues that the Code departs from realization in many contexts, and that, in other contexts, it incorporates “indirect” realization, which encompasses realization based on accounting events not experienced by the taxpayer. The brief further situates section 965 as an integral part of the 2017 tax law and argues that severability questions would therefore arise if the Court were to hold section 965 unconstitutional. Professor Seto is counsel for this brief.
- Professor Amandeep S. Grewal
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This brief—filed by a tax and constitutional law scholar—argues that the Sixteenth Amendment has a realization requirement but that it is a holistic requirement that is met so long as the federal income tax base as a whole follows realization principles, even if individual parts of the tax base do not. The brief argues that if the Court takes a holistic approach to realization, it will protect other income tax provisions that may be under threat if the Court adopts a strict realization approach. The brief also explains that even if viewed in isolation, section 965(a) follows realization principles. Finally, the brief argues that, if the Court were to find that section 965(a) violated realization principles, this case should be returned to the lower courts to determine whether section 965(a) is nonetheless constitutional under Congress’s Article I taxing power. Professor Grewal is counsel for this brief.
- Professor Calvin H. Johnson
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This brief—filed by a tax law scholar—argues that, under the original meaning of the Constitution, a “direct tax” assumed that per capita tax bases were the same in every state; thus, when a tax base was not equal in every state, an apportioned tax would not have a uniform tax rate in every state, and hence the tax was not direct. It further contends that Pollock—which was inconsistent with the original meaning of the Constitution when decided, later confined to its facts before the Sixteenth Amendment by an infinitely elastic definition of “excise,” and finally abrogated in its last redoubt by the Amendment—should be overruled explicitly, and that Eisner v. Macomber, 252 U.S. 189 (1920) should thus be overruled as well. Professor Johnson is counsel for this brief.
- Professors Akhil Reed Amar and Vikram David Amar
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Professors Akhil Reed Amar and Vikram David Amar
This brief—submitted by two constitutional scholars and historians—explains that, under the original meaning of the Constitution, the only two categories of direct taxes were head taxes and real-estate taxes. It explains that because section 965 falls into neither of these categories, it is constitutional because it is not a direct tax and thus does not have to be apportioned. The brief states that section 965 is a constitutional income tax under the Sixteenth Amendment but argues that the Court need not reach this question since section 965 is not a direct tax. Professor Vikram David Amar is counsel for this brief.
- Professor Alex Zhang
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This brief—submitted by a tax law scholar—argues that Macomber articulated five different possible limitations on Congress’s power to tax income, any of which could have justified the holding in that case. The brief contends that the Supreme Court subsequently refined all of the Macomber Court’s holdings except one. It argues that, as refined, Macomber stands for the proposition that Congress can tax as income any object or transaction that generates economic income, even when there is no realization. The Emory Law School Supreme Court Advocacy Program is counsel for this brief.
II. Briefs in Support of Neither Party
Briefs Providing Business Perspectives
- Small Business and Entrepreneurship Council
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Small Business and Entrepreneurship Council
This brief explains that if the Supreme Court finds section 965 unconstitutional, it will create chaos and uncertainty for small businesses unless it addresses severability. It further contends that, in addressing severability, the Court should conclude that section 965 is severable from the rest of the 2017 tax law. Gibson, Dunn & Crutcher LLP is counsel for this brief.
Briefs Providing Organizations’ Perspectives
- National Taxpayers Union Foundation
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National Taxpayers Union Foundation
This brief argues that Congress can only tax realized income but explains that KisanKraft was a pass-through that realized income and that Congress can therefore tax its shareholders on income realized by the business. The brief further explains that controlled foreign corporations have always been pass-through businesses under U.S. law: section 965 did not create a new pass-through tax; rather, it ended the deferral that had previously been allowed. The brief contends that if the Court rules for petitioners, it should limit its ruling and not disturb the rest of the 2017 tax law. The National Taxpayers Union Foundation is counsel for this brief.
Briefs Providing Academic Perspectives
- Professors of Law and Linguistics
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Professors of Law and Linguistics
This brief—filed on behalf of four professors of law and linguistics—argues that the meaning of the Sixteenth Amendment should be decided using its contemporaneous ordinary public meaning. It argues that, in this case, dictionaries fall short, but using corpus linguistics, it finds that, at the time of the Sixteenth Amendment, “income(s)” referred exclusively to realized economic gain. Hunton Andrews Kurth LLP is counsel for this brief.
III. Briefs Supporting Petitioners
Briefs Providing Tax Practitioner Perspectives
- Mark E. Berg
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This brief—filed on behalf of a tax attorney in private practice—argues that the government has acknowledged that section 965 is direct and unapportioned. It contends that section 965 is therefore unconstitutional because Macomber has not been repudiated or overruled. Further, the brief contends that other parts of the tax code would not be implicated by a ruling in favor of the petitioners because these parts of the code either are not direct taxes or tax income that has been “derived.” Klehr Harrison Harvey Branzburg LLP is counsel for this brief.
Briefs Providing Business Perspectives
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The Buckeye Foundation and National Federation of Independent Business Small Business Legal Center, Inc.
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This brief argues that significant harm may occur as a result of the Ninth Circuit’s decision. It argues that by including unrealized appreciation of property within the definition of income, this decision is inconsistent with the text of the Constitution and with Supreme Court precedent. Shumaker, Loop & Kendrick, LLP and the Buckeye Institute are co-counsel for this brief.
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This brief argues that realization as a limiting principle for taxation creates predictability and certainty that businesses rely on. It further contends that, under the Ninth Circuit’s reasoning, businesses and shareholders could be taxed on gain that disappears as the market fluctuates. Sidley Austin LLP and the U.S. Chamber Litigation Center are co-counsel for this brief.
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Saving America’s Family Enterprises and Former Senator John Breaux
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Saving America’s Family Enterprises and Former Senator John Breaux
This brief—filed on behalf of Saving America’s Family Enterprises and former Senator John Breaux—argues that section 965 is an unconstitutional, direct, unapportioned tax on unrealized gains and that upholding it will lead to more complicated and burdensome taxes for individuals and family businesses. Hogan Lovells US LLP is counsel for this brief.
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This brief—filed on behalf of individual United States citizens who hold shares in controlled foreign corporations—argues that section 965 is unconstitutional, and that it harmed and created uncertainty for individual taxpayers who had section 965 liability. Winston & Strawn LLP is counsel for this brief.
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This brief—filed by two French organizations that focus on overseas Americans and extraterritorial applications of U.S. tax—argues that section 965, as applied to individual shareholders, is taxation based on nationality rather than residency, which it argues violates equal protection, the United States’ obligations under bilateral tax treaties, and other nations’ sovereignty. SEAT and AARO are co-counsel for this brief.
Briefs Providing States’ Perspectives
- West Virginia and 16 Other States
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West Virginia and 16 Other States
This brief–filed by West Virginia and sixteen other states—argues that, absent the passage of an apportioned tax, which is politically infeasible—only states can tax unrealized gains. The brief argues that the Ninth Circuit’s reasoning would allow Congress to tax areas traditionally reserved for the states and harm state revenues. The West Virginia Solicitor General is counsel of record for this brief.
Briefs Providing Academic Perspectives
- Former Attorney General Edwin Meese III and Professors Steven G. Calabresi and Gary S. Lawson
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Former Attorney General Edwin Meese III and Professors Steven G. Calabresi and Gary S. Lawson
This brief—filed on behalf of a former Attorney General and two constitutional law scholars—argues that contemporary dictionaries and context and the roughly contemporaneous Macomber decision show that unrealized capital gains were not income under ordinary public meaning. It contends that taxes on unrealized capital gains are essentially wealth taxes, which require apportionment, and that the Ninth Circuit’s reasoning opens the door for federal taxation of gains in Vanguard funds, stock portfolios, and real property. Taft, Stettinius & Hollister is counsel for this brief.
- Professor Hank Adler
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This brief—filed by an associate professor of accounting who was formerly a public accountant—argues that the MRT’s bifurcated rate makes it an unconstitutional direct tax. Spach, Capaldi & Waggaman, LLP is counsel for this brief.
- The Manhattan Institute for Policy Research and Professors Erik M. Jenssen and James W. Ely
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The Manhattan Institute for Policy Research and Professors Erik M. Jenssen and James W. Ely
This brief—filed on behalf of the Manhattan Institute and by two emeritus professors of law, one of whom is also an emeritus professor of history—argues that the petitioners never sought nor received any income from KisanKraft. It further argues that the Ninth Circuit’s opinion could lead to taxation of wealth and property that neither the original Constitution nor the Sixteenth Amendment were intended to allow and that could harm the economy. It contends that holding section 965, as applied to individual taxpayers, unconstitutional would have limited effect on other provisions of the tax code. McDermott Will & Emery LLP and Ilya Shapiro of the Manhattan Institute are co-counsel for this brief.
Briefs Providing Organizations’ Perspectives
- Freedomworks, Inc.
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This brief argues that the federal government can only tax unrealized income in narrow circumstances and that the government’s claim, as well as any attempt to comprehensively tax all economic (or Haig-Simons) income, would transform the taxing power and disrupt the economy. John Yoo and Richard A. Epstein are counsel for this brief.
- Atlantic Legal Foundation
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This brief argues that if the Court does not reverse the Ninth Circuit, Congress will be able to define “income” and could pass unapportioned taxes on the appreciated values of investments. It further argues that such taxes would hurt the U.S. and global economy through disincentivizing investment, entrepreneurship, and innovation. Marco Q. Rossi & Associati and the Atlantic Legal Foundation are co-counsel for this brief.
- The Cato Institute
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This brief argues that section 965 taxes wealth rather than income. It further argues that this distinguishes it from other existing taxes and that a ruling in favor of the petitioners would not, therefore, affect the rest of the existing tax code. The Cato Institute and Fenwick & West LLP are co-counsel for this brief.
- Americans for Tax Reform
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This brief argues that, under the pre-ratification law, the statute implementing the income tax under the Sixteenth Amendment, and the century of history and practice following the amendment, the Sixteenth Amendment requires realization. It argues that the Ninth Circuit’s reasoning opens the door for a wealth tax, and that history shows that Congress has a tendency to expand its tax schemes whenever its power is expanded. Dechert LLP is counsel for this brief.
- Landmark Legal Foundation
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This brief argues that a ruling for the government would effectively eliminate the requirement that direct taxes be apportioned. It contends that the petitioners realized no gain and received no income and that, therefore, section 965 does not tax income. Landmark Legal Foundation is counsel for this brief.
- The Philanthropy Roundtable
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This brief acknowledges the broad taxing power of Congress, but argues that Congress’s exercise of this power should be well-defined so as not to dampen charitable giving. Proclaiming charities vital to the United States, this brief argues that section 965 goes too far and does hinder charitable giving. Trevor Burrus and Ilya Shapiro are co-counsel for this brief.
- Independent Women’s Law Center
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Independent Women’s Law Center
This brief argues that taxing unrealized gain creates disproportionate harms for women because women hold investments for longer and are more reliant on capital when operating businesses. Schaerr | Jaffe LLP and the Independent Women’s Law Center are co-counsel for this brief.
- Liberty Justice Center
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This brief argues that unrealized gains are not received or “drawn upon” and are not taxable as income. It argues that taxation of unrealized gain is both bad policy and outside the bounds of the “derived” language in the Sixteenth Amendment. Liberty Justice Center is counsel for this brief.
- Southern Policy Law Institute
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This brief argues that the Ninth Circuit’s interpretation of the taxing power would lead to taxes on economic value and wealth, which it argues is contrary to the original meaning of both the 1787 Constitution and the Sixteenth Amendment. It further argues that section 965 violates the India-U.S. bilateral tax treaty and India’s sovereignty. Clouthier Cooperstein PLLC is counsel for this brief.
- Southeastern Legal Foundation and Young America’s Foundation
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Southeastern Legal Foundation and Young America’s Foundation
This brief argues that Congress’s power to tax is limited, and that, more specifically, its power to tax under the Sixteenth Amendment is limited to realized income. It further contends that section 965 is a novel wealth tax and that the Ninth Circuit opinion upholding it is inconsistent with the original meaning of the Sixteenth Amendment and a hundred years of precedent. Consovoy McCarthy PLLC, the Antonin Scalia Law School Supreme Court Clinic, and the Southeastern Legal Foundation are co-counsel for this brief.
- Pacific Research Institute
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This brief focuses on the original public meaning of the Sixteenth Amendment, arguing that the power to tax “incomes” without apportionment did not include the power to tax “mere increases in the value of property or other assets” before the gain was realized by the taxpayer. The brief attempts to distinguish other provisions through the doctrine of constructive realization; while the brief admits that it is a factual question whether income is constructively realized, it argues that section 965 does not come close to taxing constructively realized income. Schaerr | Jaffe and McGrath & Associates are co-counsel for this brief.
- Sixteenth Amendment Insights, LLC and Jeffrey N. Schwartz
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Sixteenth Amendment Insights, LLC and Jeffrey N. Schwartz
This brief—filed on behalf of Sixteenth Amendment Insights, LLC and a New York attorney—argues that the Sixteenth Amendment was meant to preserve the distinction between a direct and indirect tax. The brief acknowledges that the Sixteenth Amendment allows taxation of unrealized gain in some circumstances but argues the Court should either reverse or vacate and remand for further findings because the gain taxed here exceeds the amount that the petitioners, as non-controlling, minority shareholders, could have realized if they had sold or disposed of the entirety of their interests. Weisbrod Matteis & Copley PLLC is counsel for this brief.
Selected Commentary
Selected commentary illustrating the range of tax system participants analyzing or concerned about the potential outcomes of Moore v U.S.:
- Joint Committee on Taxation Letter to House Ways and Means Committee Ranking Member Richard E. Neal (Joint Committee on Taxation)
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Joint Committee on Taxation Letter to House Ways and Means Committee Ranking Member Richard E. Neal (Joint Committee on Taxation)
- The Joint Committee on Taxation (“JCT”) is a nonpartisan committee of the U.S. Congress that helps Congress develop and analyze tax laws and prepare official estimates of laws’ revenue effects. Members of Congress may request that JCT perform a revenue estimate or other analysis.
- At the request of Richard E. Neal, Ranking Member of the House Ways and Means Committee, JCT analyzed the portions of the Code that could be affected by a ruling in favor of the petitioners in Moore.
- JCT analyzed the implications for current tax code provisions of a ruling in favor of the Moores attributing significance to the concept of “constructive realization” that the petitioners presented. JCT concluded such a ruling could lead to taxpayer challenges to other provisions of the Code, including those provisions that involve look-through taxation, as well as to provisions of the Code that involve deemed realization, one of which JCT identified as involving taxation of income accrued in prior years.
- Remarks from Former Speaker of the House Paul Ryan (Brookings, Hamilton Project)
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Remarks from Former Speaker of the House Paul Ryan (Brookings, Hamilton Project)
- Speaking at a September 27, 2023, forum hosted by the Brookings Institution’s Hamilton Project, Paul Ryan, former Speaker of the House and one of the drafters of the 2017 tax law, offered his views about the possible implications of a ruling in favor of petitioners.
- Ryan stated that
“...the goal [of section 965] was to finance a conversion from one system to another, and it wasn't to... justify [a] wealth tax... My friends at the Mercatus Center. Their heart's in the right place. I think they're misfiring on this one. I mean, a lot of the tax code would be unconstitutional if that thing prevailed. You know, [Subpart F]. I can just go on and on and on. So, I think... it's a misguided challenge, in my opinion. And the point of that was just a temporary conversion from [] worldwide to a territorial system. And the budget windows, you [know,] when you work with those, [those] are the kinds of things you have to do. 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. So, I think that's... Be careful what you ask for.”
- Supreme Corporate Tax Giveaway: Who Would Benefit from the Roberts Court Striking Down the Mandatory Repatriation Tax? (Niko Lusiani, Roosevelt Institute, and Matt Gardner & Spandan Marsini, Institute on Taxation and Economic Policy
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Supreme Corporate Tax Giveaway: Who Would Benefit from the Roberts Court Striking Down the Mandatory Repatriation Tax? (Niko Lusiani, Roosevelt Institute, and Matt Gardner & Spandan Marsini, Institute on Taxation and Economic Policy
Determines that $271 billion of section 965 revenue, representing most of the revenue that was projected to be raised by this section, comes from 389 multinational companies, based on analysis of corporate securities filings.
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Determines that $271 billion of section 965 revenue, representing most of the revenue that was projected to be raised by this section, comes from 389 multinational companies, based on analysis of corporate securities filings.
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Explains which companies stand to benefit the most.
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Describes Justices Roberts’ and Alito’s interest in some of the companies that will benefit.
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- How the Moore Supreme Court Case Could Reshape Taxation of Unrealized Income (Daniel Bunn, Alan Cole, William McBride, and Garrett Watson, Tax Foundation)
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How the Moore Supreme Court Case Could Reshape Taxation of Unrealized Income (Daniel Bunn, Alan Cole, William McBride, and Garrett Watson, Tax Foundation)
- “Depending on how the court rules, large portions of the U.S. tax base could quickly become legally uncertain, putting significant revenue at stake.”
- Presents revenue estimates of the impact of the transition tax, also split by individuals/passthroughs versus corporate.
- Describes policy and revenue implications for other parts of the tax code, including CAMT, GILTI, Subpart F, passthroughs, and taxation on retained corporate earnings.
- Moore, the Sixteenth Amendment, and the Underpinnings of the TCJA’s Deemed Repatriation Provision (Christopher H. Hanna, Senior Policy Advisor for Tax Reform, U.S. Senate Committee on Finance, 2011-2018; Alan D. Feld Endowed Professor of Law and the Altshuler Distinguished Teaching Professor at Southern Methodist University.)
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Moore, the Sixteenth Amendment, and the Underpinnings of the TCJA’s Deemed Repatriation Provision (Christopher H. Hanna, Senior Policy Advisor for Tax Reform, U.S. Senate Committee on Finance, 2011-2018; Alan D. Feld Endowed Professor of Law and the Altshuler Distinguished Teaching Professor at Southern Methodist University.)
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Explains embedded role of the transition tax in Subpart F, 2017 tax reforms, concluding “section 965 was viewed as a necessary piece of international tax reform and represented an effort to tax income that U.S. multinationals had earned but not repatriated in a fair, efficient, and simple manner.”
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Traces lineage of the transition tax in multiple proposals by Republican lawmakers
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Explains how alternatives lead to windfalls and poor policy outcomes.
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Notes that the bifurcated rate structure (which some briefs rely on to characterize the tax as a tax on wealth) came about because corporate lobbyists requested it.
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The Supreme Court Should Not Enshrine the Realization Tax Principle in the Constitution (Alan D Viard, American Enterprise Institute Senior Fellow Emeritus, formerly economist in President George W. Bush’s White House Council of Economic Advisors)
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The Supreme Court Should Not Enshrine the Realization Tax Principle in the Constitution (Alan D Viard, American Enterprise Institute Senior Fellow Emeritus, formerly economist in President George W. Bush’s White House Council of Economic Advisors)
- “A ruling in favor of the Moores would spark years of litigation over these, and other, provisions. Depending on the breadth of the ruling, many of the provisions might eventually be struck down, resurrecting abusive tax strategies and economic distortions.”
- How the Supreme Court Case Moore v. United States Could Alter the Tax Landscape (Video of September 21, 2023 event co-hosted by the Tax Law Center at NYU Law and the Tax Policy Center)
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How the Supreme Court Case Moore v. United States Could Alter the Tax Landscape (Video of September 21, 2023 event co-hosted by the Tax Law Center at NYU Law and the Tax Policy Center)
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Panelist contributors including
- Chye-Ching Huang, Executive Director, Tax Law Center at NYU Law (moderator)
- Deborah Paul, Partner, Wachtell, Lipton, Rosen & Katz
- Steve Rosenthal, Senior Fellow, Urban-Brookings Tax Policy Center
- Eric Solomon, Partner, Ivins, Phillips & Barker
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- The Potential Economic Consequences of Disallowing the Taxation of Unrealized Income (Eric Toder, Tax Policy Center)
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The Potential Economic Consequences of Disallowing the Taxation of Unrealized Income (Eric Toder, Tax Policy Center)
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Examines six tax law provisions that could be under threat from a ruling in favor of petitioners.
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Finds that these provisions account for between $87 billion in 2024 and $125 billion in 2028, not accounting for behavioral responses that could lead to even higher losses.
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The report also examines the uncertainty that could result from a ruling in favor of petitioners.
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- The Supreme Court Should Leave the Tax Code Alone (Alex Brill, Kyle Pomerleau, Michael R. Strain, Stan Veuger, Alan D. Viard, American Enterprise Institute)
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“[A] realization requirement is undesirable because a realization-based tax system is economically incoherent. Economists generally favor one of two coherent tax bases: income or consumption. A realization-based income tax is neither. As a result, it creates both economic distortions and opportunities for tax avoidance."
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“A decision that invalidates the MRT may or may not immediately implicate other parts of the tax code. However, the decision would open the door to years of lawsuits over other provisions, throwing a cloud of uncertainty over a broad swath of the US economy."
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- Moore v. US Ruling Could Widen Deficits, Upend Tax Law (Committee for a Responsible Federal Budget)
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Moore v. US Ruling Could Widen Deficits, Upend Tax Law (Committee for a Responsible Federal Budget)
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“The Court’s decision could end up costing the federal government anywhere from $3 billion to $1 trillion of lost revenue over the decade, while creating huge loopholes in the tax code."
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Notes that the amicus briefs filed in support of the government, including from “those on the right side of the political spectrum” warn that “continued litigation, abusive tax strategies, distortion of income, and widespread effects on federal revenue could follow a ruling in favor of the Moores.”
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Explains that a ruling that strikes down section 965 would cost $346 billion and “would also allow a large amount of corporate income to permanently evade taxation and undermine the international tax reforms made under the TCJA.”
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