This Corporate Law Case Could Accidentally Overturn U.S. Taxes
Alex Brill, Stan Veuger and Kyle Pomerleau | Foreign Policy
This week, the Supreme Court will hear oral arguments in Moore v. United States, a case that centers on the mandatory repatriation tax (MRT). The MRT was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA) and required corporations to a pay a one-time tax on deferred foreign profits. These are profits that were earned by foreign subsidiaries of American businesses, but not returned home and therefore not yet subjected to U.S. taxation.
The plaintiffs, Charles and Kathleen Moore, argue that a ruling in their favor would ensure Congress could never impose a wealth tax. Many on the right oppose such a tax, most famously proposed by Sen. Elizabeth Warren (D-Mass.) and thus organizations like Americans for Tax Reform, the Cato Institute, FreedomWorks, and the Manhattan Institute have filed amicus briefs in support of the plaintiffs. In reality, the case has little to do with such a tax.
Rather, a ruling in favor of the Moores risks upending key elements of the current federal income tax and wreaking havoc on parts of the U.S. economy. As we detail with additional colleagues in an amicus brief in support of the respondent, the federal government, the Court should rule against the Moores and affirm the lower court ruling.
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