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The SCOTUS Case That Could Upend the United States Tax Code

News outlets tap George Callas, a key expert in the tax code at stake in the case, for insight.

Next week, the Supreme Court will review Moore v. United States, a case about whether a couple can be taxed on profits from a foreign company in which they invested, but from which they claim to have never received a check. (Here’s our explanation of Moore v. United States.) As the case approaches, questions have arisen about the connections between the Moores and KisanKraft, the company in which they invested. While the Moores initially asserted that they had no involvement in the company other than their investment, Charles Moore did serve on its board for several years. 

Some see the case as a vehicle to stave off a wealth tax. However, as Arnold Ventures’ Executive Vice President of Public Finance George Callas has pointed out, this would be an incorrect understanding of income and wealth. The Moores aren’t being taxed on the change in the value of their shares,” said Callas in a recent article for The Washington Post. They’re not being taxed on the price of their shares, which would be like a wealth tax. … What’s being taxed is actual earnings and profit.” Callas helped write the section of the 2017 tax law at issue in this case. 

In Bloomberg Tax, Callas explains further the potential effects of the case on the federal tax code. If the court struck down the tax, the status of several other government taxes on business profits would be up in the air, including law around partnerships, S Corporations, and the treatment of global intangible low-taxed income.” In other words, the case could have significant effects on the government’s ability to raise revenue and pay its bills. 

Read more about the case, the new revelations of the Moores’ involvement in KisanKraft, and the implications of a ruling on the U.S. tax code:

Related: The amicus brief filed by George Callas and Mindy Herzfeld for the case.