A 7.6 earthquake and its resulting tsunami on New Year’s Day that shook Japan set the stage as the faultless metaphor that will reverberate throughout 2024 and beyond. With the impending presidential election aside, the tremors of improbability arrived a month earlier when the Supreme Court decided to hear a case with profound implications for the federal income tax.
Moore v. U.S. will decide if the federal government can tax unrealized capital gains not yet received under the 16th Amendment. The justices agreed to hear the Moores’ appeal as the couple wanted their $14,729 refund that the Ninth U.S. Circuit Court of Appeals ruled against. The Ninth Circuit, known in legal circles, as the “Ninth Circus” has the worst record of any appeals court before the Supreme Court.
Like Roe v. Wade did last year, this case will have a huge and lasting ripple effect regarding future taxation that should concern everyone.
It is no secret that the nation is accruing debt that is unsustainable. The day of reckoning approaches. The irony is the case is named Moore – indeed “more” income through taxation.
When was the last time a member of Congress did their own taxes?
A fundamental reckoning from the ground up is long overdue to bury the income tax along with the IRS and replace them with a consumption tax or flat tax.
To tax unrealized capital gains not yet received is extreme. The power to regulate and tax is the power to destroy. Congress’s authority to tax does not include reinvested capital and personal property as income.
Income is money received.
Assets may increase in value, but until they are collected as interest, dividends or sold, there is no income. If you cannot spend it, it is not income.
You can’t pay the rent or fill your gas tank with paper gains or the appreciation of your home. When you gain on any financial instrument but do not sell you earn a “paper profit.” If unrealized gains are taxed, and the taxpayer has no cash to pay, a forced liquidation would be necessary for payment.
Are you prepared to pay a tax because your assets go up in value? House, car, pets, trading cards, comic books, Auntie Estelle’s antique coffee table – where does it end? Provided market values decline would monies be refunded? Stop laughing, that was no joke.
Uncle Sam wants all the golden eggs without having to buy the hens, the henhouse, and the chickenfeed. The power brokers in Washington believe everything is subject to taxation real or imagined.
It is pitiful that this case is even necessary.
A tax in bad faith resulted in a revolution nearly 250 years ago. Such taxation realizes the socialist dream of equal outcomes regardless of effort, ingenuity, innovation, or lack thereof. Ayn Rand’s nightmare is finally realized.
The Supreme Court’s job is not about maximizing taxable income for Uncle Sam but to interpret if this tax is constitutional.
A ruling in favor of Uncle Sam will unleash Congress’ taxing power and devastate our economic system as we know it. Going forward, all unrealized income will become whatever the government says it is.
The Supreme Court’s decision is expected in June right in the middle of the presidential campaign. Provided the government loses and refusing to allow what they perceive as a crisis; Democrats will condemn the decision as a political red herring.
A Moore victory would also challenge other sections of the tax code that stands at nearly 7,000 pages. Provided they are unconstitutional; they must fall, too.
The income tax has been around since 1913 and its ability to produce revenue has never been assuaged by politics. The hardcore issue is the United States does not have a taxing problem, but a spending problem. Revenue is up but it can’t compete with current spending levels.
A ruling in favor of the government would only exacerbate such spending.
