SCOTUS rejected the challenge brought by a couple who contested the 2017 tax law violates the Constitution by taxing income they never received
The Supreme Court of the United States (SCOTUS) upheld a tax package on Americans who own shares in certain foreign companies—backing a 2017 law signed by former President Donald Trump.
Justice Brett Kavanaugh authored the 7-2 decision supported by Chief Justice Roberts and three other liberal justices.
Moore v. United States
SCOTUS rejected the challenge brought by a couple, Charles and Kathleen Moore, who contested the law, arguing it violates the Constitution by taxing income they never received.
The Washington couple were taxed $15,000 due to the 2017 tax reform for their investments in an Indian company supplying equipment to small-scale farmers.
Justice Kavanaugh, writing for the majority, disagreed, citing legal precedent and Congress’s authority to tax shareholders on a corporation’s earnings.
The tax reform imposes a one-time tax on overseas investments. It aims to fund corporate tax cuts and prevent tax avoidance and is expected to secure an estimated $340 billion in revenue by 2027, mainly from large corporations.
The ruling maintains current tax frameworks and anticipates future debates over wealth taxes.