Moore v. United States and the Original Meaning of Income

22 Pages Posted: 6 Jul 2023 Last revised: 29 Feb 2024

See all articles by John R. Brooks

John R. Brooks

Fordham University School of Law

David Gamage

University of Missouri School of Law

Date Written: July 2, 2023


In the upcoming Supreme Court case of Moore v. United States the taxpayers are challenging whether unrepatriated earnings of a foreign corporation can be “income” of a shareholder under the Sixteenth Amendment. The case therefore raises a question that the Court has rarely had to address in the last 100 years—what is the meaning of "income" under the Sixteenth Amendment? And furthermore, is realization required before the gain from property ownership can be treated as income?

Central to answering those question is another question: What is the original meaning of income at the time of the Sixteenth Amendment’s ratification? The taxpayers in Moore (and the Ninth Circuit judges who dissented from the denial of rehearing en banc) argue that some concept of realization is necessarily a part of the original meaning of income—i.e., that there must be some act of separation or conversion of property into cash or other property in order for there to be income.

In this essay, we highlight some of the major errors and omissions of the taxpayers, amici, and Ninth Circuit dissenters related to the question of original meaning. We show that contemporary definitions of income did not incorporate—and could not have incorporated—the contemporaneous definition of realization, and that they in fact incorporated unrealized gain. Furthermore, we show that pre-ratification and contemporaneous federal tax law explicitly included undistributed corporate earnings in shareholders’ income. We also show—we believe for the first time in the literature—that the federal corporate income tax law at the time of the Sixteenth Amendment’s ratification explicitly included unrealized gain from the appreciation of assets as gross income for tax purposes. Given this evidence, it is clear that realization could not have been a necessary and required element of the original meaning of income.

(This working paper is an early draft of a research project that has since been further developed, with an updated and more fleshed out draft available here: We are keeping this earlier draft available for download because it has already been referenced and cited to by other scholars.)

Keywords: Income Tax, Capital Gains, Constitutional Law, Sixteenth Amendment, Originalism, Realization

JEL Classification: K34

Suggested Citation

Brooks, John R. and Gamage, David, Moore v. United States and the Original Meaning of Income (July 2, 2023). Fordham Law Legal Studies Research Paper No. 4491855, Available at SSRN: or

John R. Brooks (Contact Author)

Fordham University School of Law ( email )

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New York, NY 10023
United States

HOME PAGE: http://

David Gamage

University of Missouri School of Law ( email )

Missouri Avenue & Conley Avenue
Columbia, MO MO 65211
United States


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