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Friday, December 29, 2023

Seven Tax Experts: The Biggest Implications Of Moore

The Biggest Implications of Moore, 181 Tax Notes Fed. 2147 (Dec. 18, 2023):

Supreme Court (Current)In this installment of the Star Forum, experts answer the following question: What do you see as the biggest implications of Moore, even though we don’t know for sure how the Supreme Court will decide the case? (The authors drafted their initial essays — and reached their conclusions — without seeing each other’s contributions.)

Conor Clarke (Washington University; Google Scholar), We Are All Tax Historians Now, 181 Tax Notes Fed. 2147 (Dec. 18, 2023):

The opposing parties in Moore obviously don’t agree on much, but on one point they see eye to eye: History can help determine the constitutionality of a tax law.

Patrick Driessen (former government economist and revenue estimator), Tax Mandates, Leverage, and Whipsaws, 181 Tax Notes Fed. 2149 (Dec. 18, 2023):

The traction of the Moores’ challenge to the TCJA’s taxation of pre-2018 deferred foreign earnings has been surprising, even if it is “just” a scarecrow to ward off accrual and wealth taxes (that, too, would seem to me a bad outcome). Also, the TCJA’s MRT itself was surprising seven years ago. Either I surprise easily, or tax policy has become more suspenseful.

Michael J. Graetz (Columbia), What I Learned at the Oral Argument in Moore, 181 Tax Notes Fed. 2151 (Dec. 18, 2023):

In The Power to Destroy: How the Antitax Movement Hijacked America, my new book, I describe how, during this last half-century, reducing taxes at the top and curbing the government’s ability to raise the revenues necessary to fund government spending became the linchpin holding together disparate elements of the Republican coalition. The antitax movement, I claim, is “the most overlooked social and political movement in recent American history.” Activist members of that movement have now enlisted the Supreme Court — by attacking as unconstitutional an obscure international tax provision, enacted as a crucial element of a Republican tax law — to block their real target: Democratic proposals to increase taxes on the rich. Leaving the oral argument, I marveled at the skill with which the movement successfully recruited a Supreme Court majority of longtime Republican conservatives into their project of limiting taxes on wealthy Americans.

Daniel J. Hemel (NYU: Google Scholar), Winning by Losing, 181 Tax Notes Fed. 2153 (Dec. 18, 2023):

[F]or the Competitive Enterprise Institute (CEI), the libertarian think tank that brought the case on the Moores’ behalf, the litigation effort is likely to be a strategic victory. This lawsuit was never really about the Moores themselves, whose $14,729 tax bill would not have been worth fighting all the way to the Supreme Court if there weren’t larger ideological stakes at play. Nor was it about the MRT, which required U.S. shareholders to pay a one-time tax at the end of 2017 on earnings and profits accumulated by CFCs since 1986. The MRT was enacted as part of the Republican-drafted TCJA, and the Moores’ backers were — on the whole — enthusiastic supporters of the TCJA. From the start of the litigation, the MRT was a stalking horse for wealth and mark-to-market income taxes proposed by prominent Democrats — taxes that CEI couldn’t challenge because they haven’t yet been passed. Indeed, the Moores’ cert petition explicitly urged the Court to hear the case so that the justices could head those taxes off. And on both the wealth tax and mark-to-market fronts, CEI and the conservative and libertarian groups that filed amicus briefs backing the Moores appear to have gained significant ground.

Joseph T. Henderson (Tulane), Ramifications of the Forthcoming Decision in Moore, 181 Tax Notes Fed. 2155 (Dec. 18, 2023):

The invention of the corporation as a vehicle for capital formation and limited liability was wonderful, but respecting it for tax purposes launched the tax law world into such complexity that it siphoned off incalculable talent from society just to manage the consequences of that fateful decision. That “human tax” surely dwarfs the trillions of dollars that the solicitor general referred to as the consequence of the Moores winning their case. Alas, we are where we are, and what the heck, it gave us all good jobs.

Steven M. Rosenthal (Tax Policy Center), Don’t Mess With Taxes, 181 Tax Notes Fed. 2157 (Dec. 18, 2023):

[T]he wise course for the Court would be to take its lesson in hand: Don’t mess with taxes. Leave that to Congress.

Lawrence A. Zelenak (Duke; Google Scholar), Moore May Be Less (Than It Might Have Been), 181 Tax Notes Fed. 2159 (Dec. 18, 2023):

For all the cataclysmic potential of a Supreme Court decision in Moore — with the possibilities ranging from a sweeping invalidation of every passthrough tax regime in the current code on the one hand, to the Court’s pronouncing last rites over Macomber on the other — in light of the recent oral argument, it seems likely that the Court’s opinion will be less than earthshattering. With the caveats that even expert predictions based on oral arguments are unreliable, and that I am no expert in Supreme Court prognostications, it now seems probable that the Court (1) will not invalidate the MRT, (2) will not hint at the invalidity of any existing code provisions, and (3) will not bury Macomber.

Prior TaxProf Blog coverage:

https://taxprof.typepad.com/taxprof_blog/2023/12/tax-implications-of-moore-v-united-states.html

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