The plaintiffs’ arguments in Moore v. United States have little basis in law — unless you think that a list of long-ago-discarded laissez-faire decisions from the early 20th century remain good law. And a decision favoring these plaintiffs could blow a huge hole in the federal budget. While no Warren-style wealth tax is on the books, the Moore plaintiffs do challenge an existing tax that is expected to raise $340 billion over the course of a decade.
But Republicans also hold six seats on the nation’s highest Court, so there is some risk that a majority of the justices will accept the plaintiffs’ dubious legal arguments. And if they do so, they could do considerable damage to the government’s ability to fund itself.
This is the best summary I could come up with:
The specific details of this very complicated change to the US tax code are not especially important — although, for reasons discussed below, they could matter a great deal if the Moore plaintiffs prevail.
These three cases arguably mark the dawn of the Lochner era, which is named for a 1905 Supreme Court decision that imposed strict limits on both the federal government and the states’ power to enact laws seeking to improve workplace conditions for workers.
The plaintiffs in Moore are represented by Andrew Grossman, an adjunct scholar at the right-libertarian Cato Institute, and David Rivkin, a Republican lawyer known for defending torture during the George W. Bush administration, and for filing one of the first lawsuits claiming that Obamacare is unconstitutional.
Macomber, a 5-4 decision mostly joined by pro-Lochner justices, said that “enrichment through increase in value of capital investment is not income in any proper meaning of the term.” That conclusion closely tracks the reasoning of Pollock, which was supposed to have been overruled by the 16th Amendment.
The Moore plaintiffs’ approach will be familiar to anyone who has studied the Lochner era, the age when the Court routinely struck down laws, not because they violated the Constitution, but because five justices deemed them “unwise, improvident, or out of harmony with a particular school of thought.”
When Congress passed the Tax Cuts and Jobs Act in 2017, it used a process that imposed a $1 trillion cap on how much the bill could add to the budget deficit over the next decade.
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