Supreme Court Skirts Key Question in Moore Decision

WASHINGTON – Today, the U.S. Supreme Court narrowly ruled in Moore v. United States that the 2017 Mandatory Repatriation Tax is constitutional. By declining to address the question of whether such a tax is an unconstitutional tax on unrealized income, the Court side-stepped the broader threat of proposed wealth taxes and the negative ramifications a tax on unrealized gains would have on charitable endeavors.   

Philanthropy Roundtable’s Senior Vice President Elizabeth McGuigan responded to the decision: 

“The U.S. Supreme Court’s narrow decision in Moore is a missed opportunity to slam the door closed on future taxes on assets, including resources set aside for charitable activity. Americans’ strong and effective tradition of generosity relies on a fair and predictable tax code, and this decision undermines the transformative, nationwide work of nonprofits that private charitable giving supports. It’s disappointing that the Court declined to address the issue of whether a tax on unrealized income would be unconstitutional. The Roundtable will continue to fight wealth tax proposals that punish success and impede Americans’ abilities to support those in need.”   

The case of Charles and Kathleen Moore centered on an investment the couple made in a company empowering small-scale farmers, which left them with a $15,000 tax bill. Referred to as the Mandatory Repatriation Tax (MRT), the tax obligated the Moores to declare additional taxable income based on gains that had not been distributed to them as shareholders. They petitioned the U.S. Supreme Court challenging the constitutionality of the tax, and Philanthropy Roundtable submitted an amicus brief in support of the Moores. 

As the Roundtable has written before, charitable giving “is most effective when donors are free to give to the causes and communities they care about most. It spurs generosity and allows nonprofits to focus on their core missions.”  

Today’s decision leaves open the possibility for a future wealth tax, which is often proposed as a tax on assets rather than on income.  

More from Philanthropy Roundtable on Moore v. United States

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