Supreme Court upholds Trump-era tax provision on offshore earnings
The Supreme Court on Thursday rejected a challenge to an obscure provision of President Donald Trump’s 2017 tax package, ending a lawsuit that many experts feared could destabilize the nation’s tax system. In a divided decision, the court upheld a one-time tax on offshore earnings that helped fund the massive tax cut, saying it was permitted under Congress’s limited powers of taxation. Some viewed the lawsuit as an effort to preemptively block Congress from creating a wealth tax. Writing for the majority, Justice Brett M. Kavanaugh said the challenge to the tax on offshore earnings could have rendered “vast swaths of the Internal Revenue Code unconstitutional.” “Those tax provisions, if suddenly eliminated, would deprive the U.S. Government and the American people of trillions in lost tax revenue,” he wrote. The implications of the challengers’ argument, he added, would have required Congress to “either drastically cut critical national programs or significantly increase taxes on the remaining sources available to it — including, of course, on ordinary Americans. The Constitution does not require that fiscal calamity.” Justices Clarence Thomas and Neil M. Gorsuch dissented.
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