Justices uphold Trump tax on overseas investments in win for Biden

The Supreme Court on Thursday upheld a Trump-era tax on overseas investments, rejecting an argument from a Washington state couple in a case that could have jeopardized existing tax provisions and torpedoed Democratic talk of a wealth tax.

The Supreme Court on Thursday upheld a Trump-era tax on overseas investments, rejecting an argument from a Washington state couple in a case that could have jeopardized existing tax provisions and torpedoed Democratic talk of a wealth tax. A 7-2 majority upheld the tax. Justice Brett Kavanaugh wrote the majority opinion and Justice Clarence Thomas wrote a dissent. At issue in the closely watched tax case was whether the government could levy a tax on investment proceeds that had not yet been received. Charles and Kathleen Moore, a Washington state couple, challenged a $15,000 tax bill they received because of their investment in an India-based company. The profit at issue, the Moores claimed, were reinvested and never distributed to them. The tax involved was enacted by Congress in 2017 as part of a larger package signed by former President Donald Trump. The one-time mandatory repatriation tax was levied on shareholders on undistributed profits accrued between 1986 and the end of 2017 by certain foreign corporations that are majority owned by Americans. The provision was expected to raise $340 billion over a decade. Some conservative groups warned that a win for the government could open the door to a federal tax on wealth, which President Joe Biden and several congressional Democrats have eyed in recent years. But during oral arguments in December both conservative and liberal justices appeared to be looking for a narrow outcome that wouldn’t undermine current taxes or dip into the debate over a wealth tax. Biden and other Democrats have proposed new taxes on the wealthy to fund their spending plans, many of which are aimed at helping lower-income and middle-class Americans. Some proposals seek to tax annual increases in the value of unsold assets, also known as unrealized capital gains. Currently, this growth is typically only taxed at time of sale.