President Joe Biden certainly can’t be happy with what the Supreme Court has done recently, but it’s very possible the high court isn’t done upsetting him.
The latest blow to Biden came late last week when the high court struck down the president’s plan to cancel as much as $20,000 in federal student loan debt for some borrowers. Now, they could be after his plans to increase taxes on the rich.
There are many cases that the Supreme Court will hear in its fall term that would be considered major. That includes one dealing with the power of federal agencies and another on gun rights.
But, the one that might pique Biden’s interest the most is Moore v. United States. The case deals with whether the Biden administration can impose a wealth tax, which is something that the president has repeatedly pushed for.
During the State of the Union address he gave before the House of Representatives this past February, Biden said:
“Reward work, not just wealth. Pass my proposal for a billionaire minimum tax, because no billionaire should pay a lower tax rate than a school teacher or a firefighter.”
Following that speech, Biden proposed instituting an annual tax of 25% on all gains to an individual’s wealth that exceeded $100 million for that given year. That would include any unrealized capital gains, which right now aren’t considered taxable.
According to the White House, this new proposed tax would apply only to the country’s top 0.01% of earners.
Even without the Supreme Court case about this wealth tax looming on the horizon, Biden would have an uphill battle getting his proposal through Congress. With the GOP in control of the House, he’s unlikely to garner enough support for the bill.
Yet, the case before the high court is extremely important, as it could determine whether such a wealth tax would be considered unconstitutional. If the Supreme Court strikes it down, then it would prevent Biden from, say, re-introducing the proposal if he wins re-election in 2024 and Democrats are able to gain control of both the House and the Senate.
The case in question revolves around similar taxation issues as well as what the definition of “income” is.
The plaintiffs in the case, Charles and Kathleen Moore from the state of Washington, made a roughly $40,000 investment in 2005 into a company based in India. They didn’t receive any payments from the company for that investment, despite the fact that the company turned a profit in every year since.
Based on the tax reform law that went into effect in 2017, the Moores discovered they would have to pay a repatriation tax that amounted to $14,729. The couple paid what they were told they owed, and then subsequently sued to get a refund.
They said the tax violated the apportionment clause of the Constitution.
The outcome of the Moore case will go a long way in determining whether Biden and Democrats even have a right to institute a wealth tax. If the Supreme Court doesn’t rule in liberals’ favor, it’ll serve as yet another reason why Democrats will call for packing the court.