The Moores Lost Their Claim And Moore

Lily Batchelder (NYU), Ari Glogower (Northwestern; Google Scholar), Chye-Ching Huang (NYU), David Kamin (NYU), Rebecca Kysar (Fordham; Google Scholar), Kelsey Merrick (NYU), Darien Shanske (UC-Davis; Google Scholar) & Thalia Spinrad (NYU), The Moores Lost Their Claim and Moore, 184 Tax Notes Fed. 1509 (Aug. 19, 2024): 

In this article, the authors analyze the logic of Moore and argue that in many important ways, the decision undercuts attempts to sharply limit Congress’s taxing power.

Conclusion
The Moores’ counsel and some of their amici are urging that the opinion be read to tacitly rule out wealth taxes, mark-to-market taxes, and perhaps even impose a constitutional realization requirement, despite the fact the opinion explicitly disclaims doing any of those things. After all, that would turn their loss into a win. But the Court expressly declined to decide these questions.

Indeed, the logic of the majority opinion suggests the opposite — that a future Court should continue to exercise restraint in examining any proposed limits on Congress’s taxing power. Future litigants are likely to face the same challenges as the Moores if the Court continues to follow the majority’s logic. If and when the Court reaches the question of realization, the Moore opinion suggests that Macomber does not offer a workable definition of a constitutional realization rule and that any workable rule — if it exists — must avoid a blast radius within the tax system, a test the Moores’ proposed rule failed.

Sound tax policy requires that policymakers have the flexibility to address avoidance or abuse, tax new types of income, ensure certain income doesn’t escape taxation entirely, and raise revenue. Lawmakers have done just that in enacting many parts of the existing tax code, even as there is ample room for improvement. The Moore majority recognizes the importance of that flexibility as fundamental to Congress’s taxing power.

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