OPINION: This article may contain commentary which reflects the author's opinion.
The Supreme Court has been a thorn in the side of President Joe Biden’s administration, frequently ruling against his agenda. But the nation’s highest court appears poised to do even more damage to Biden’s plans to move the country to the far left.
For instance, Biden’s plans to tax ‘the rich’ could soon be axed after the high court ruled earlier this year that Biden’s $430 billion-plus student loan forgiveness was unconstitutional.
Moore v. United States, for example, could greatest influence on Biden, despite the fact that the court will hear cases this fall involving the right to bear arms, the authority of federal agencies, and whether the phrase “Trump too small” can be trademarked.
That debate centers on Biden’s frequently expressed desire for a wealth tax and whether it could be implemented.
The central question in the case is, according to SCOTUS Blog, “Whether the 16th Amendment authorizes Congress to tax unrealized sums without apportionment among the states.” That amendment, of course, allowed the Legislative Branch, for the first time in the country’s history, to legally impose an income tax.
“Reward work, not just wealth. Pass my proposal for a billionaire minimum tax,” Biden said during the State of the Union address earlier this year. “Because no billionaire should pay a lower tax rate than a school teacher or a firefighter.”
“Biden later proposed a 25% annual tax on all gains to wealth in excess of $100 million in a given year, including unrealized capital gains which aren’t currently taxable. The White House says that the tax would only apply to the top 0.01% of the highest earners. While the proposal faces long odds with a Republican-controlled House of Representatives, it could be nixed permanently if the high court rules such a tax is unconstitutional,” The Washington Examiner reported.
“The specifics of the Moore case don’t involve huge amounts of money, but center around the same issues of taxation and the definition of the word ‘income,'” the outlet added. “Charles and Kathleen Moore, a Washington state-based couple, made a nearly $40,000 investment into an Indian company in 2005 and never received any money or other payments from the company even though it made a profit every year.”
Several groups have filed amicus briefs in the case, including the libertarian CATO Institute, which argued that under the Constitution, Biden’s action would be impermissible.
“Since the ratification of the Sixteenth Amendment, this Court has consistently interpreted “income” as referring to amounts that the taxpayer realizes in a particular accounting period,” the group’s brief, filed in March, states. “Therefore, this Court has consistently treated contemporaneous realization of income as a constitutional prerequisite to a tax that is not subject to the apportionment requirement set forth in Article I.”
“In holding that the Mandatory Repatriation Tax is constitutional, the Ninth Circuit rejected this well-established principle and contradicted this Court’s precedents. The Ninth Circuit’s approach contorted the definition of ‘income’ beyond recognition,” the brief continued.
The group added: “If a tax on unrealized investment holdings like the Mandatory Repatriation Tax can be treated as an ‘income’ tax, then anything can be treated as an income tax. And if anything can be treated as an income tax, then the Sixteenth Amendment’s limitation to ‘income’ taxes is meaningless.”
“Businesses rely on predictability and certainty in tax laws to plan their affairs,” said an amicus brief filed this month by the U.S. Chamber of Commerce, the country’s largest business organization.
“If income can be redefined as easily as the Ninth Circuit says, then businesses and their shareholders could be subject to taxes on anything that the government later deems “income”—even increases in value that could disappear as valuations or markets fluctuate. Such a realization free approach risks profound uncertainty in an area of the law that demands certainty,” the group argued further.
Meanwhile, the Court will hear a number of cases this fall that offer promising chances to restrain the federal administrative state.
The court has agreed to rule on cases that contest the constitutionality of an agency funding scheme that is exempt from the congressional appropriations process and regular congressional oversight, as well as the practice of federal courts extending judicial deference to agency interpretations of the laws they are tasked with enforcing.
The court also agreed to hear a case that could bring back the jury trial to a class of civil cases that are currently handled solely by judges who work for administrative agencies. One of the most important cases of the upcoming term may be SEC v. Jarkesy because it may reinstate the right to a jury trial in administrative civil cases, the Daily Signal reported.
