Stephen L. Carter, Columnist

Is a Wealth Tax an Income Tax? Here's Why That Matters

In Moore v. United States, a majority of Supreme Court justices seemed open to the idea of taxing unrealized gains. But a wealth tax would face hurdles.

June 21, 2024 at 10:30 AM UTC

By Stephen L. Carter

Stephen L. Carter is a Bloomberg Opinion columnist, a professor of law at Yale University and author of “Invisible: The Story of the Black Woman Lawyer Who Took Down America’s Most Powerful Mobster.”

Not too taxing.
Photographer: Aris Messinis/AFP/Getty Images

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Moore v. United States, Thursday’s decision by the US Supreme Court on the Mandatory Repatriation Tax, would seem to affect relatively few taxpayers. But in rejecting a constitutional challenge to the MRT (as it’s known), the justices might have scattered some breadcrumbs about their attitudes toward a potentially more sweeping wealth tax.

The MRT was adopted in 2017 as part of the Tax Cuts and Jobs Act. The tax code has long treated passive income earned by “American-controlled foreign corporations” as attributable to US shareholders even if the income has never been distributed. The MRT imposed a one-time tax on other income accumulated in the corporation and not distributed, including active business income, going back several years.