SCOTUS: Moore v United States - Tax on unrealized income

[searcher]

WASHINGTON, Dec 5 (Reuters) - U.S. Supreme Court justices on Tuesday appeared hesitant to upend a tax on Americans who have invested in certain foreign corporations, as they pondered the meaning of "income" in a case that could undermine efforts by some Democratic lawmakers to impose a wealth tax on the very rich.

The justices heard arguments in an appeal by Charles and Kathleen Moore - a retired couple from Redmond, Washington - of a lower court's decision rejecting their challenge to the tax on foreign company earnings, even though those profits have not been distributed to shareholders.

More:

US Supreme Court wary of upending tax on Americans' foreign earnings

U.S. Supreme Court justices on Tuesday appeared hesitant to upend a tax on Americans who have invested in certain foreign corporations, as they pondered the meaning of "income" in a case that could undermine efforts by some Democratic lawmakers to impose a wealth tax on the very rich.

www.reuters.com

 

[pmbug]

They are more worried about implications than whether or not it's Constitutional. It sounds like this is going to end up getting justified by a total perversion of logic much like the ACA decision.

 

[Goldhedge]

This would be a total disaster for America.
I know a liberal lawyer up in Boulder and he's already doing this with tenant's rents and landlords.
Suing landlords who rent for market prices!

 

[JayDubya]

So if the SCOTUS agrees that unrealized gains should be considered as taxable income does that mean that every year my property taxes go up (they always go up) that in addition to paying the property tax I also have to pay a tax on my unrealized gain as well?

If this ruling goes through, I get the feeling that a bunch of folks from the old neighborhood are gonna run into a whole bunch of "unrealized losses" and file their tax return accordingly. Push that envelope.

 

[pmbug]

So if the SCOTUS agrees that unrealized gains should be considered as taxable income does that mean that every year my property taxes go up (they always go up) that in addition to paying the property tax I also have to pay a tax on my unrealized gain as well?
...

 

[Cigarlover]

This would be a total disaster for America.
I know a liberal lawyer up in Boulder and he's already doing this with tenant's rents and landlords.
Suing landlords who rent for market prices!

And that's when about 100 million Americans should exercise their 2nd amendment rights and throw them all out of DC. Shut down the entire criminal enterprise and build it back the way it was intended by the constitution.

 

[pmbug]

Not related to the court case specifically, but to the topic:

Taxing unrealized capital gains on property, stocks, and other assets is not just a bad idea, it’s an economic fallacy that undermines economic growth and personal liberty. Unfortunately, President Biden’s $7.3 trillion budget proposes such a federal tax. Vermont and ten other states have made similar moves.

This tax should be rejected, as it is fundamentally unjust, likely unconstitutional, and would hinder prosperity and individual freedom.

A tax on unrealized capital gains means that individuals are penalized for owning appreciating assets, regardless of whether they have realized any actual income from selling them.
...
Adam Michel of Cato Institute explained two types of unrealized taxes in President Biden’s latest budget:

Under current law, capital gains are taxed when the gain is realized — when the investment is sold and there is an actual profit to tax… The budget proposes eliminating step‐up in basis, making death a taxable event. The change applies to unrealized capital gains over $5 million for single filers ($10 million married).

And secondly,

The budget proposes a new minimum tax of 25 percent on income and unrealized capital gains for taxpayers with more than $100 million in total wealth. This new minimum tax would be a third, parallel income tax system, adding to the existing alternative minimum tax. The new minimum tax applies to two entirely new tax bases — wealth and unrealized capital gains. Defining and taxing wealth and unrealized capital gains pose numerous practical challenges and high economic costs.

...

Unrealized Gains Tax is an Economic Fallacy

"Taxing unrealized capital gains from property, stocks, and other assets is a bad idea. It undermines economic growth, stifles innovation, and infringes on personal liberty." ~Vance Ginn

www.aier.org

 

[Joe King]

"hinder prosperity and individual freedom."

That'what most politicians think is the purpose of government.

It's certainly how they act.