Amicus Brief of John R. Brooks and David Gamage in Moore v. United States, No. 22-800

Abstract

In Moore v. United States, No. 22-800, the Supreme Court will consider the meaning of the Sixteenth Amendment to the Constitution and whether it allows taxation of “unrealized sums” as income. Professors John Brooks and David Gamage argue in this amicus brief that the original public meaning of the Sixteenth Amendment does not incorporate a realization argument. They base this argument on three main points: 1) There is a long history of federal (and state) income taxation of accrued, but unrealized, income going back at least to the Civil War, including shareholder taxation of undistributed corporate earnings, “mark-to-market” taxation of capital assets, and general accrual accounting methods. 2) The Sixteenth Amendment’s clearly articulated and understood meaning was to overrule the Supreme Court’s 1895 decision in Pollock v. Farmers’ Loan & Trust Co., and thereby restore the “complete and plenary power of income taxation” as it was understood at the time, including the features mentioned above. 3) Contemporaneous dictionaries, legal treatises, and other sources generally reflect this broad and expansive understanding of “income.”

Keywords: taxation, Constitutional Law, Supreme Court, originalism, Sixteenth Amendment, legal history