Moore v. United States

Moore v. United States is a 2024 United States Supreme Court case concerning the constitutionality of the mandatory repatriation tax under the 2017 Tax Cuts and Jobs Act. Petitioners Charles and Kathleen Moore invested in an Indian corporation but received no dividends. The tax required them to pay a one-time levy on the company's retained earnings. They argued this violated the Sixteenth Amendment, which they claimed requires realized income for taxation. The government maintained that Congress has broad authority to tax undistributed corporate earnings attributable to U.S. shareholders. The Supreme Court upheld the tax, ruling that the MRT falls within Congress's constitutional taxing power.

The United States Supreme Court ruled 7-2 to uphold the mandatory repatriation tax as constitutional. Justice Brett Kavanaugh delivered the majority opinion, holding that the tax on undistributed corporate earnings falls within Congress's taxing authority under the Sixteenth Amendment. The Court declined to address broader questions about taxing unrealized gains, limiting its holding to the specific pass-through entity context.

Whether the mandatory repatriation tax on unrealized corporate earnings violates the Sixteenth Amendment's requirement that direct taxes be apportioned among the states based on population, and whether the Amendment permits Congress to tax income that has not been actually received by the taxpayer.

The ruling preserved Congress's authority to enact the mandatory repatriation tax and avoided a decision that could have destabilized large portions of the federal tax code. The narrow scope of the decision left unresolved major questions about the constitutionality of a potential wealth tax or mark-to-market taxation on unrealized capital gains, an ongoing debate in American fiscal policy.