Columbus, OH – On Wednesday, The Buckeye Institute filed an amicus brief in Moore v. United States, calling the U.S. Supreme Court to reverse a ruling out of the Ninth Circuit Court of Appeals that would expand congressional authority to levy taxes well beyond what the Constitution and court precedent allow. The National Federation of Independent Business joined Buckeye in filing the brief.

“The Ninth Circuit’s ruling broadens the definition of ‘income’ so dramatically that if upheld, it would allow the federal government to not only tax actual income but also possible future income—income one might never receive—such as the increased value of a home or a retirement fund,” said David C. Tryon, director of litigation at The Buckeye Institute. “Such an outcome is inconsistent with the U.S. Constitution and more than a century of U.S. Supreme Court precedent.”

Moore v. United States—a Competitive Enterprise Institute case—challenges a provision in the 2017 Tax Cuts and Jobs Act that imposed a one-time “repatriation tax” on U.S. residents with investments in foreign corporations. In the Ninth Circuit’s decision, the court held that the federal government can impose an income tax on the increased value of a company even when the taxpayer never received any payments or dividends. The result is that Charles and Kathleen Moore—who invested in a company that provides tools and other farming equipment to India’s underserved rural farmers—were deemed to have had an additional $132,512 in taxable income in 2017 income and had to pay an additional $14,729 in taxes even though they didn’t sell any stock and never received any payments or dividends from their investment. 

Larry Obhof, a partner at Shumaker, Loop & Kendrick, LLP and former president of the Ohio Senate, is the counsel of record on this brief.

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UPDATE: On June 20, 2024, the U.S. Supreme Court affirmed the Ninth Circuit’s decision but did not reach the issue raised by The Buckeye Institute that the federal government may not impose a tax on unrealized income—leaving that issue for another case where that question is raised directly.