The Volokh Conspiracy

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Supreme Court

Supreme Court to Consider Scope of Congress's Taxing Power under the 16th Amendment

The question presented is whether the 16th Amendment authorizes Congress to tax unrealized sums without apportionment among the states.


Today the Supreme Court granted certiorari in Moore v United States, which considers the estent to which the 16th Amendment constrains Congress's ability to impose different sorts of taxes and, in particular, whether Congress may tax unrealized income without apportionment.

Here is the question presented from the petition for certiorari:

The Sixteenth Amendment authorizes Congress to lay "taxes on incomes…without apportionment among the several States." Beginning with Eisner v. Macomber, 252 U.S. 189 (1920), this Court's decisions have uniformly held "income," for Sixteenth Amendment purposes, to require realization by the taxpayer. In the decision below, however, the Ninth Circuit approved taxation of a married couple on earnings that they undisputedly did not realize but were instead retained and reinvested by a corporation in which they are minority shareholders. It held that "realization of income is not a constitutional requirement" for Congress to lay an "income" tax exempt from apportionment. App.12. In so holding, the Ninth Circuit became "the first court in the country to state that an 'income tax' doesn't require that a 'taxpayer has realized income.'" App.38 (Bumatay, J., dissenting from denial of rehearing en banc).

The question presented is:

Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

As noted in the brief, the U.S. Court of Appeals for the Ninth Circuit denied rehearing en banc over a dissent from Judge Bumatay. I suspect that was a flag to the Court that this case could be cert-worthy. Either that or it was the amicus brief filed by my colleague Erik Jensen (along with James Ely and the Manhattan Institute). Either way, this will be an interesting case to watch next term.

Briefs and lower court opinions can be found here.