Washington, D.C. — Today, the U.S. Supreme Court heard oral arguments in Moore v. United States— a challenge to the constitutionality of the Mandatory Repatriation Tax (MRT), a one-time transition tax included in the 2017 tax cuts designed to prevent accumulated earnings from going untaxed permanently. The plaintiffs use the 16th Amendment to the U.S. Constitution (which authorizes Congress to tax income) to argue that the definition of “income” doesn’t include unrealized gains. They further argue that the MRT is a tax on unrealized gains because it taxes income that has been realized by a corporate entity, but has not been distributed to its shareholders.
People and groups from across the ideological spectrum—from small businesses, to legal scholars, to tax professionals—have urged the Supreme Court to reject the Moores’ radical arguments. From former House Speaker Paul Ryan and the American Enterprise Institute to small business groups, 16 states, and the District of Columbia, many warn that an upending of the MRT will pose untold consequences across the economy.
In response to oral arguments, a broad coalition of organizations including Democracy Forward; United for Democracy; Americans for Tax Fairness; National Education Association; Accountable.US; Main Street Alliance; National Women’s Law Center; End Citizens United/Let America Vote; United for a Fair Economy; Court Accountability; DemCast USA; Get Money Out – Maryland; Progress Arizona; Indivisible Marin; Take Back the Court Foundation; Revolving Door Project; People Power United; Rise Economy (formerly California Reinvestment Coalition); True North Research; Take on Wall Street; Responsible Wealth; and The Workers Circle released the following statement:
“We urge the Supreme Court to reject the unfounded and aggressive arguments brought by plaintiffs in Moore v. United States. It is no coincidence that the plaintiffs in this case enjoy the support of far-right legal organizations with close ties to the likes of Leonard Leo and Harlan Crow, as well as groups representing major multinational corporations. If their arguments are accepted, not only would it defy legal precedent, but could cause the disruption of a long-settled and bipartisan supported structure for taxation. A ruling in their favor would jeopardize the government’s ability to serve people and communities, undermine growth throughout our economy, and pose a dangerous threat to our democracy.”