Small Businesses Advocate for Balanced Taxing Power in Latest Amicus Brief

Date: September 06, 2023

Moore v. U.S. concerns the Sixteenth Amendment and Congress’ taxing power

WASHINGTON, D.C. (Sept. 6, 2023)NFIB filed an amicus brief in the case Moore v. United States at the U.S. Supreme Court arguing that the Court should clarify the proper interpretation of the Sixteenth Amendment and restore the limitation on Congress’ taxing power. The case questions whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

“The Ninth Circuit’s current ruling will negatively impact small businesses,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “If reinvestment into a small business is considered ‘income,’ then small business owners will face an increased tax on unrealized gains. The current ruling would also greatly expand Congress’ power by allowing Congress to directly tax property interests without apportionment. We ask the Supreme Court to reverse the lower court’s decision and clarify the proper limits on taxing power.”

The Ninth Circuit’s holding substantially broadens the scope of “income” to include unrealized appreciation of property, which is inconsistent with the constitutional text. For more than a century, the Supreme Court has applied the Sixteenth Amendment as written and has recognized that “income” must be “derived” from a “source.”

NFIB filed the amicus brief with The Buckeye Institute. The brief has two main arguments: 1) the Court of Appeals’ decision is erroneous and displaces settled constitutional limits on federal taxation, and 2) the Mandatory Repatriation Tax is severable from the remainder of the Tax Cuts and Jobs Act.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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