A ruling against the government could have brought about « fiscal calamity, » Justice Brett Kavanaugh wrote.
Topline
The Supreme Court declined to overturn a tax policy Thursday that critics warned could have had broad implications on federal tax policy and the U.S. economy, ruling against a couple who claimed they should not have been taxed on money they invested but hadn’t made a profit on.Key Facts
After being taxed on an investment they had in an Indian company, couple Charles and Kathleen Moore asked the Supreme Court to overturn what’s known as the “mandatory repatriation tax” (MRT), a provision of the GOP’s 2017 tax law that imposed a one-time tax on U.S. individuals and companies who have a significant stake in foreign corporations controlled by Americans.
The court ruled 7-2 to uphold the MRT, ruling it does not exceed Congress’ authority, with Chief Justice John Roberts and Justices Brett Kavanaugh, Samuel Alito and Amy Coney Barrett joining with the court’s three liberal justices.
The Moores argued they shouldn’t have been taxed on “unrealized gains,” meaning investments that they haven’t actually made a profit on (money earned from investments or assets is generally taxed after they’ve been sold at a profit, meaning those gains are “realized”).
The court did not agree, with Kavanaugh writing for the majority the MRT is in line with other tax provisions that have been “long imposed by Congress and long upheld by this Court.
