The plaintiffs’ arguments in Moore v. United States have little basis in law — unless you think that a list of long-ago-discarded laissez-faire decisions from the early 20th century remain good law. And a decision favoring these plaintiffs could blow a huge hole in the federal budget. While no Warren-style wealth tax is on the books, the Moore plaintiffs do challenge an existing tax that is expected to raise $340 billion over the course of a decade.
But Republicans also hold six seats on the nation’s highest Court, so there is some risk that a majority of the justices will accept the plaintiffs’ dubious legal arguments. And if they do so, they could do considerable damage to the government’s ability to fund itself.
Which amendment is that? Because the sixteenth amendment very specifically mentions taxes on income, not wealth.
Article 1, section 8:
Given that the 16th Amendment exists expressly in order to establish a federal income tax, it’s probably safe to say that this has not been understood as an unlimited power of taxation.
Pollock v. Farmers’ Loan & Trust Company is the relevant SCOTUS case, if you’re curious. The tl;dr is that Article I, Section 9:
states that revenues raised by a “direct tax”, which includes income taxes, from a given state must be proportional to that state’s population relative to the rest of the country. Income isn’t evenly distributed among the states, so income taxes violate this provision. That’s why the 16th amendment specifically exempts income taxes from that requirement:
The basic idea was that, if Congress needed to raise a bunch of money for some large project, they can’t go targeting specific states for it.
The Sixteenth Amendment exists not because of the limitations imposed by Pollock v. Farmers, but because Congress was concerned that the Supreme Court might strike down further income tax laws even though they were within the powers conferred by Article 1. Congress thought the Supreme Court had gone too far (and they likely did) and wasn’t sure how far they would go so they took it out of the Supreme Court’s hands.
Funnily enough you’re talking about circular logic. One is saying congress has the expressed right to tax and cannot be limited by the Supreme Court. Now you’re saying the Supreme Court has already limited congresses power to tax…
Er, no?
I’m saying that the Constitution, Article I Section 9, imposes a limit on Congress’s ability to issue taxes. The Sixteenth Amendment was passed to specifically exempt income taxes from that limit, which is what authorized the federal income tax. There is a very real legal argument that a wealth tax, which is a fundamentally different kind of tax, does not fall under the Sixteenth Amendment exemption and thus is constitutionally restricted.
I might not have explained that super clearly, so genuinely, feel free to ask if I was confusing at all.
Not an amendment.
Yeah, because before we only had wealth taxes. We had to add income.
This is also false. A quick glance at Wikipedia suggests that tariffs were a prime revenue source for the federal government.
…How do you obtain wealth without income?
I assume that’s kindof the issue here. The wealth can’t of come from nowhere. It’s just 2nd grader loopholes.
There’s a very meaningful difference. Wealth is a function of the value of your stuff, which is determined by other people at large, not you, while $20 is $20, always.
A family who bought a rundown brownstone building in Brooklyn back in the 70s is now extremely wealthy, completely independent of income. Wealth can be obtained by other people simply deciding that your stuff is now more valuable than it was before, whether that be property, art, company shares, resources, or anything else. Money obtained by selling stuff generally is treated very differently than income, usually under capital gains taxes.