Supreme Court Takes Up Tax Ca 12/05 07:08
WASHINGTON (AP) -- The Supreme Court is taking up a case Tuesday over a
Washington couple's $15,000 tax bill that is widely seen as a test of a
never-enacted tax on wealth.
A decision in favor of Charles and Kathleen Moore of Redmond, Washington,
could strike down a provision of the 2017 tax bill that is expected to bring in
$340 billion, threaten other provisions of the tax code and rule out a wealth
tax that is favored by some Democrats who argue that the wealthiest Americans
don't pay their fair share of taxes.
Paul Ryan, the Wisconsin Republican who was Speaker of the House when the
tax bill was passed by a Republican Congress and signed into law by
then-President Donald Trump, has called the challenge "misguided" and said "a
lot of the tax code would be unconstitutional if that thing prevailed."
The couple is backed by conservative political groups and business
interests, including the U.S. Chamber of Commerce.
The law applies to companies that are owned by Americans, but do their
business in foreign countries. It imposes a one-time tax on investors' shares
of profits that have not been passed along to them, in order to offset other
The Moores paid $15,000 in taxes based on Charles Moore's investment in an
They argue that the tax violates the 16th Amendment, which allows the
federal government to impose an income tax on Americans. Moore said in a sworn
statement that he never received any money from the company, KisanKraft Machine
Tools Private Limited.
Some groups allied with the Moores argue that the challenged provision is
similar to a wealth tax, which would apply not to the incomes of the very
richest Americans, but their assets, like stock holdings, that now only get
taxed when they are sold.
Democratic Sen. Ron Wyden of Oregon said a court ruling for the Moores could
stymie legislation like the Billionaires Income Tax he introduced last week.
"The Moore case could make it impossible to close those loopholes," Wyden said.
The case also has kicked up ethical concerns and raised questions about the
story the Moores' lawyers told in court filings. Public documents show that
Charles Moore's involvement with the company, including serving as a director
for five years, is far more extensive than court filings indicate.
Senate Democrats had asked Justice Samuel Alito to step aside from the case
because of his interactions with David Rivkin, a lawyer who is representing the
Moores. The Democrats said Alito had cast doubt on his ability to judge the
case fairly because he sat for four hours of Wall Street Journal opinion page
interviews with an editor at the newspaper and Rivkin.
Alito rejected the demands in a four-page statement issued by the court in
which he said there "is no valid reason" for his recusal.