Paul L. Caron

Wednesday, February 7, 2024

Clarke: The Overlooked Excise Power In Moore

Conor Clarke (Washington University; Google Scholar), Moore: The Overlooked Excise Power, 181 Tax Notes Fed. 1759 (Dec. 4, 2023):

Tax-notes-federalMoore v. United States, a constitutional challenge to the mandatory repatriation tax in the Tax Cuts and Jobs Act, has been litigated almost entirely as a case about the scope of the Sixteenth Amendment. I present an alternative theory: The repatriation tax doesn’t need to flow from the Sixteenth Amendment power to tax “incomes,” because it flows from Congress’s Article I power to lay and collect “excises.” The Supreme Court has long upheld Congress’s power to tax business earnings and activities as a valid exercise of the excise power, and the mandatory repatriation tax fits within that framework. 

The repatriation tax also has early and important historical antecedents, including an 1813 federal licensing fee on all retailers of foreign merchandise and a 1794 fee for retailers of foreign alcohol. At the same time, I highlight ways in which the scope of the excise power remains fraught and is likely to remain fraught regardless of what the Court says in Moore.

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