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Paul L. Caron
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Tuesday, December 12, 2023

NY Times Op-Ed: Moore, The Rich, And The Supreme Court

New York Times Op-Ed:  Want to Tax the Rich for Real? Pay Attention to This Supreme Court Case., by Joseph Fishkin (UCLA; Google Scholar) & William E. Forbath (Texas) (Co-Authors:  The Anti-Oligarchy Constitution: Reconstructing the Economic Foundations of American Democracy (2022); Amicus Brief in Moore v. United States)):

Supreme Court (2024)Last week, the wealthiest Americans had their day in court. The case before the Supreme Court, Moore v. United States, is a challenge to an obscure and narrow provision of the tax code, in former President Donald Trump’s Tax Cuts and Jobs Act, that taxes certain assets held abroad.

An activist lower court judge, most likely inspired by right-wing constitutional scholars and think tanks, cleverly framed Moore as a grand occasion to rule against some future wealth tax, and the high court took it up.

Supporters of the Moore litigation probably hope to persuade conservatives on the court to issue a broad ruling that would declare unconstitutional any attempt to enact a tax on wealth (like proposals that Senator Elizabeth Warren of Massachusetts and others have floated).

The argument for why a tax on wealth would be unconstitutional is both premature and exceptionally weak. And indeed, the consensus after oral arguments last week was that a majority of justices — but certainly not all — were skeptical of a sweeping ruling.

Still, something like this argument prevailed with a similarly conservative Supreme Court once before, long ago — only to be repudiated decisively by the American people through a constitutional amendment.

The question now is whether the conservative justices will practice the originalism they preach and listen to the framers and ratifiers of the 16th Amendment, or whether instead, like the Supreme Court over a century ago, they will be moved by political sympathy for the wealthy to reach out and rule in their favor. ...

[T]he anti-tax lawyers arguing last week at the Supreme Court purport to rely on the 16th Amendment for their new claim that Congress can’t tax wealth. Their claim is that somehow, the logic of Pollock was right: There are kinds of tax that the Constitution secretly forbids, by demanding that they be apportioned when apportionment is not possible.

And once again it just so happens that those secretly forbidden kinds of tax are ones that fall on the rich. The anti-tax advocates in Moore are asking the court to follow in the Pollock majority’s footsteps and invent a new doctrine to protect the super-wealthy from tax — this time, from a wealth tax that hasn’t yet even been enacted. ...

Is this court really prepared to reprise Pollock — a move that would be flagrantly at odds with the fidelity to the original language of the Constitution that this court so loudly preaches?

Unlike in 1895, this time the court would have to disregard not only the 1789 Constitution but also the 16th Amendment, which squarely repudiated the court’s last attempt to undermine Congress’s taxing power in order to protect the rich. Even if the court chooses to resolve Moore on narrow grounds, it may still use the occasion to signal, in the spirit of Pollock, that a future wealth tax will be struck down.

Instead, this would be a good time for the court to back off. If it does not, then it would be a good time for the other branches of government to take more seriously their responsibilities to act as a check on a runaway court.

Neil Buchanan (Florida), Will the Supreme Court's Conservative Super-Majority Make their Patrons Untaxable?:

Earlier this week, the Supreme Court heard oral argument in a case, Moore v. US, that has the potential to effectively immunize the wealthiest Americans from taxation.  The anti-tax arguments in that case are tendentious, ahistorical, constitutionally and economically illiterate, and profoundly regressive.  They therefore have a very good chance of winning in front of the six Republican appointees on this Court. ...

Do I wish that the Court in 1940 had been more aggressive in rejecting Macomber's ridiculous reasoning?  Sure.  To be clear, however, I argued in that January 2019 column that even if Macomber had never been decided or had been explicitly overruled, that would not stop this Court from making it up out of whole cloth.  And it appears that Gorsuch and the five other beneficiaries of the largesse of the super-wealthy are eagerly looking for an excuse to say that income can be permanently exempted from taxation so long as it is received in a form that most of the rest of us never receive.  Taxation will quite possibly become an obligation only for working stiffs.  I imagine that the party on Harlan Crow's super-yacht (itself a tax dodge) will be a rager.

Prior TaxProf Blog coverage:

https://taxprof.typepad.com/taxprof_blog/2023/12/ny-times-op-ed-moore-the-rich-and-the-supreme-court.html

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