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Commentary By Ilya Shapiro

MI Responds: SCOTUS Hears Oral Arguments in Moore vs. United States

Governance Supreme Court

The case deals with the constitutionality of taxing unrealized capital gains

New York, NY – The Manhattan Institute's director of constitutional studies, Ilya Shapiro, was present today at the oral arguments in the case Moore vs. United States, arguably the most significant tax case before the Supreme Court in decades. In it, Charles and Kathleen Moore challenge the 2017 Mandatory Repatriation Tax, which billed them roughly $15,000 for an investment they made in a foreign social enterprise from which they have never received any income. Their 13% stake in the social enterprise did, however, appreciate, and whether that constitutes taxable "income" is at the center of the debate. Shapiro offers the following analysis of today's SCOTUS session:

"After a technical and at times mind-glazing argument about how to define and apply the tax concepts of 'realization' and 'attribution,' the only thing certain is that there won't be a unanimous decision. Enough justices were troubled that a ruling for the Moores might imperil the tax treatment of S Corporations, partnerships, and foreign subsidiaries of American companies, but also that the government's argument would remove any limits on federal tax power. So, we're likely to get a narrow ruling that somehow distinguishes the Moores' 'unusual' case from broader consequences. Justices Barrett and Kavanaugh in particular seem to be looking for a compromise.

"That's unfortunate, because, as the Moores' counsel Andrew Grossman explained—with the capable assistance of my wife Kristin in the second chair!—the government's parade of horribles can be avoided simply by sharpening the definition of 'realization' to exclude shareholders who lack power to force the company to disgorge corporate profits. Instead, we're likely to get increased complexity in the tax code and a slightly opened door to the taxation of unrealized capital gains."

- Ilya Shapiro is director of constitutional studies and senior fellow at the Manhattan Institute. Please send media inquiries to press officer Nicolas Abouchedid at

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