The Supreme Court on Thursday upheld a provision of the 2017 tax law that instituted a one-time tax on earnings held in foreign corporations, but the justices avoided broader questions about congressional tax power.
The 7-2 decision backed the mandatory “repatriation” tax provision in the law, which attributed long-accumulated and undistributed income of American-controlled foreign corporations to American shareholders and then taxed those shareholders.
The case hinged on congressional power to tax income under the 16th Amendment, which was adopted in response to an 1890s Supreme Court decision invalidating the first income taxes.
