Charles and Kathleen Moore are about to have their day in the Supreme Court over a $15,000 tax bill they contend is unconstitutional.
The couple from Redmond, Washington, claim they had to pay the money because of their investment in an Indian company from which, as Charles Moore, 62, said in a sworn statement, they “have never received a distribution, dividend, or other payment.”
But significant parts of the story they have told to reach this point seem at odds with public records.
The Moores are the public face of a high court case backed by business and conservative political interests that could call into question other parts of the U.S. tax code and rule out a much-discussed but never-enacted tax on wealth. The case is set for arguments on Dec. 5.
They need to start taxing collateral over a few hundred thousand as income. It’s an easy loophole to close, but of course it won’t be.
You can’t tax something that isn’t income as income.
Create a new tax structure? Sure, could be a mandatory interest on the loan that goes to the IRS or something.
But not income. It’s not income.
Being used as collateral to obtain preferential rates, it’s being spent as income to make interest payments that are deferred due to the security of the collateral. A thing of value being used to pay for an exchange is a thing that has been obtained as income.
The fact that it’s being spent as income doesn’t mean it is income.
A company has revenue, which they use to pay people with. It’s money they use to get things. But it’s not income.
It makes no sense to extend the definition of income to cover money that you personally think works as income or whatever. However, objectively, it doesn’t.
As I said, no issue creating a new structure for loaned money, but including it under income is stupid.