President Joe Biden and his administration have taken a string of losses at the hands of the conservative-majority Supreme Court, and the trend could continue later this year.
Biden has long proposed and pushed for a wealth tax, saying everything would be better off if companies and billionaires would "pay their fair share."
"Reward work, not just wealth. Pass my proposal for a billionaire minimum tax," Biden said during the State of the Union address earlier this year, the Washington Examiner reported. "Because no billionaire should pay a lower tax rate than a school teacher or a firefighter."
The Supreme Court is set to rule on the matter later this year in a case called Moore v. United States.
The Examiner noted:
“Biden later proposed a 25% annual tax on all gains to wealth in excess of $100 million in a given year, including unrealized capital gains which aren’t currently taxable. The White House says that the tax would only apply to the top 0.01% of the highest earners. While the proposal faces long odds with a Republican-controlled House of Representatives, it could be nixed permanently if the high court rules such a tax is unconstitutional,”
Charles and Kathleen Moore, a Washington state-based couple, made a nearly $40,000 investment into an Indian company in 2005, and never received any money or other payments from the company even though it made a profit every year.
The couple, under the 2017 tax reform act, were informed they owed a mandatory repatriation tax of $14,729. They ultimately paid the amount owed and then filed a lawsuit for a refund.
Their lawyer argued that the tax was in violation of the apportionment clause.
Cato Institute research fellow Thomas Berry explained further.
"The Sixteenth Amendment allows the federal government to impose income taxes without apportioning them among the states," Berry said. "But courts have always limited those taxes to that word, ‘income,’ and said that word is meaningful. It doesn’t just mean whatever the government wants it to mean."
An appeals court would eventually rule that the tax was appropriate, stating "there is no constitutional prohibition against Congress attributing a corporation's income pro-rata to its shareholder."
The Moores’ repatriation tax challenge is set to be heard by the Supreme Court in the 2023 – 2024 term, but will they prevail? Wolf’s #internationaltax expert Rita Ryan breaks down the case, where it stands & the basis of the upcoming challenge. https://t.co/5DvEQtbwFL
— Wolf & Company, P.C. (@wolfandcompany) July 24, 2023
The Cato Institutes and other organizations have filed amicus briefs in support of the couple's lawsuit.
The Examiner noted that hearings in what could be a major defeat for the Biden administration are set to begin in October.