SC Signals It Will Uphold Tax On Foreign Income

The Supreme Court (SC) indicated on Tuesday that it is inclined to uphold a tax on foreign income while leaving questions about a broader, never-enacted tax on wealth for another day, Mark Sherman reported for the Associated Press (AP).

The case involved a $15,000 tax bill challenged by Charles and Kathleen Moore of Redmond, Washington, based on Charles Moore’s investment in India. I Photo: Competitive Enterprise Institute X

Conservative and liberal justices expressed concerns that ruling against a Washington state couple challenging a provision of the 2017 tax bill could threaten other provisions of the tax code.

The court seemed to lean towards finding a "narrow ground" to decide the case without addressing the broader question of Congress’ ability to enact taxes based on wealth.

The case involved a $15,000 tax bill challenged by Charles and Kathleen Moore of Redmond, Washington, based on Charles Moore’s investment in India.

Backed by anti-regulatory and business interests, they said the tax violates the 16th Amendment, which allows the federal government to impose an income tax on Americans. Moore claimed he never received any money from the company, KisanKraft Machine Tools Pte. Ltd.

The 2017 tax law enacted by a GOP Congress and signed by then-President Donald Trump includes a provision that applies to firms owned by Americans but do their business in other nations.

It imposes a one-time tax on investors’ shares of profits that have not been passed along to them. The provision is expected to generate $340 billion, mainly from the foreign subsidiaries of domestic corporations that parked money abroad to shield it from US taxes.

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