The question
Whether the Sixteenth Amendment permits Congress, without apportionment, to tax American shareholders on the realized but undistributed income of an American-controlled foreign corporation, as the Mandatory Repatriation Tax does.
Moore v. United States
What the Court decided
The Court affirmed the Ninth Circuit and upheld the Mandatory Repatriation Tax. The MRT attributes the realized and undistributed income of an American-controlled foreign corporation to its American shareholders and taxes those shareholders on their portions of that income, and the Court held this does not exceed Congress's constitutional authority. The tax reaches realized income, namely the income realized by the corporation, and longstanding precedent lets Congress choose to tax either an entity or its shareholders on the entity's undistributed income while the levy remains a tax on income.
How the justices split
7-2The Court's opinion
Kavanaugh, joined by Roberts, Sotomayor, Kagan, Jackson
The MRT taxes realized income because it reaches the income realized by the corporation and attributes it to the American shareholders. Article I gives Congress broad power to tax, and income taxes are indirect taxes that the Sixteenth Amendment confirms need not be apportioned. The Court's longstanding precedents, including Burk-Waggoner Oil Assn. v. Hopkins, Burnet v. Leininger, and Heiner v. Mellon, establish that when an entity has undistributed income Congress may choose to tax either the entity or its shareholders or partners, and the levy remains a tax on income.
Concurring
Jackson, writing alone
Jackson filed a concurring opinion. The syllabus does not state its reasoning beyond joining the Court's opinion and writing separately.
Concurring in the judgment
Barrett, joined by Alito
Barrett filed an opinion concurring in the judgment, joined by Alito. She agreed with the outcome upholding the MRT but did not join the Court's reasoning. The syllabus does not set out the separate rationale.
Dissenting
Thomas, joined by Gorsuch
Thomas filed a dissenting opinion, joined by Gorsuch, disagreeing with the Court's conclusion that the MRT is constitutional. The syllabus does not set out the dissent's reasoning.
How we know · 5 sourced claims
The MRT attributes the realized and undistributed income of an American-controlled foreign corporation to the entity's American shareholders and taxes those shareholders on their portions of that income.
Source: syllabus, Held
The Court held that the MRT does not exceed Congress's constitutional authority.
Source: syllabus, Held
Taxes on income are indirect taxes, and the Sixteenth Amendment confirms that taxes on income need not be apportioned.
Source: syllabus, Held
The Court's longstanding precedents establish that, for an entity's undistributed income, Congress may tax either the entity or its shareholders or partners, and the tax remains a tax on income.
Source: syllabus, Held
Kavanaugh delivered the opinion of the Court, joined by Roberts, Sotomayor, Kagan, and Jackson; Barrett concurred in the judgment joined by Alito; Thomas dissented joined by Gorsuch.
Source: syllabus, lineup