Governance Civil Justice
March 27th, 2023 2 Minute Read Amicus Brief by Ilya Shapiro

Amicus Brief: Moore v. United States

Does Congress have the power to tax citizens on their ownership of shares in a corporation? The Ninth Circuit said that the answer is yes, announcing that realization of income “is not a constitutional requirement” for Congress’s exercise of its power to tax “incomes” without apportionment among the states (which is the constitutional requirement for direct taxes on property).

The case arose when Charles and Kathleen Moore, who 20 years ago invested $40,000 in a friend’s startup to supply agricultural equipment to rural farmers in India, were assessed a one-time “deemed repatriation tax” under the 2017 Tax Cuts and Jobs Act.

If that assessment is sustained, it would potentially open the door to an Elizabeth Warren-style federal wealth tax and otherwise represent a serious expansion of Congress’s taxing power. It would also stand at odds with the original meaning of the Sixteenth Amendment—which enabled the federal income tax—and a long line of Supreme Court precedents holding that realization is necessary for a taxpayer to have taxable “income.” To that end, the Manhattan Institute has filed an amicus brief supporting the Moores’ petition for Supreme Court review. Joined by originalist scholars Erik Jensen and James W. Ely, we argue that the framers intended the Apportionment Clause to be a hard limit on the central government’s taxing powers; the drafters of the Sixteenth Amendment intended a narrow definition of “incomes” as traditionally understood; and thus the Mandatory Repatriation Tax is unconstitutional.


Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Photo by DNY59/iStock


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