Supreme Court upholds Trump-era tax on foreign earnings, skirting disruptive ruling [View all]
Source: CBS News
Updated on: June 20, 2024 / 10:41 AM EDT
Washington — The Supreme Court on Thursday left intact an obscure tax enacted as part of Republicans' sweeping 2017 reform package that targets U.S. taxpayers with shares of certain foreign corporations.
The court ruled 7-2 that the so-called mandatory repatriation tax, or MRT, is constitutional under Article I and the 16th Amendment, rejecting a challenge from a Washington couple, Charles and Kathleen Moore, who claimed the provision was outside the bounds of the Constitution. Justice Brett Kavanaugh wrote the majority opinion. Justices Clarence Thomas and Neil Gorsuch dissented.
"[T]he precise and narrow question that the Court addresses today is whether Congress may attribute an entity's realized and undistributed income to the entity's shareholders or partners, and then tax the shareholders or partners on their portions of that income," Kavanaugh wrote. "This Court's longstanding precedents, reflected in and reinforced by Congress's longstanding practice, establish that the answer is yes."
The court's decision is a narrow one, but in declining to disturb the tax, the justices avoided closing the door for now on Democrats' proposals to impose taxes on the nation's highest earners. Kavanaugh stressed that the court's analysis doesn't address the issues that would be raised by taxes on holdings; wealth or net worth; or taxes on appreciation.
Read more: https://www.cbsnews.com/news/supreme-court-tax-decision-moore-v-us/
Link to SCOTUS RULING (PDF) - https://www.supremecourt.gov/opinions/23pdf/22-800_jg6o.pdf
Article updated.
Original article/headline -
June 20, 2024 / 10:07 AM EDT
Washington -- The Supreme Court on Thursday left intact an obscure tax enacted as part of Republicans' sweeping 2017 reform package that targets U.S. taxpayers with shares of certain foreign corporations.
The court ruled 7-2 that the so-called mandatory repatriation tax is constitutional under Article I and the 16th Amendment. Justice Brett Kavanaugh wrote the majority opinion.
"[T]he precise and narrow question that the Court addresses today is whether Congress may attribute an entity's realized and undistributed income to the entity's shareholders or partners, and then tax the shareholders or partners on their portions of that income," Kavanaugh wrote.
"This Court's longstanding precedents, reflected in and reinforced by Congress's longstanding practice, establish that the answer is yes."
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