“In Moore v. the United States, the Supreme Court dodged the issue of whether the Constitution allows for the taxation of unrealized income, concluding that the ‘disagreement over realization’ was among ‘potential issues for another day.’ However, Justices Amy Coney Barrett and Samuel Alito, in a concurring opinion, and Justices Clarence Thomas and Neil Gorsuch, in the dissent, declared that realization was a Constitutional requirement.
“This is not a minor issue. As my colleague Steven Rosenthal explains, their declarations open the Court to new challenges to the taxation of unrealized income. If the Court determines that ‘realization’ is a Constitutional requirement, the decision would, at worst, threaten to gut the taxation of capital income. At best, it would require the Court to join Congress and the US Treasury Department in the endless game of whack-a-mole on tax shelters.”
If the Supreme Court decides that taxing unrealized income is unconstitutional, what would be the impact on the ability of states and local governments to levy property taxes, which finance most of the cost of running school systems?
State Taxing Power – Cornell Law School
Related CCSE work:
A wealth tax could be both fair and enforceable