In Moore v. United States, the Supreme Court will decide this year whether the Ninth Circuit was right in upholding as constitutional taxes on unrealized capital gains and wealth taxes. Ed Meese, Gary Lawson, and I have written an amicus brief filed by Philip Williamson urging the Supreme Court to overrule the Ninth Circuit on both points. Our brief presents the original public meaning of the Sixteenth Amendment and of the requirement that direct taxes be apportioned among the States. We urge the Supreme Court to ignore bad caselaw and to stick to the original public meaning of the constitutional text.
The Sixteenth Amendment authorizes Congress to tax "incomes, from whatever source derived" without apportionment among the states. Unrealized capital gains are neither "incomes" nor "derived" within the original meaning of the Amendment. Both popular and legal dictionaries from the years around the ratification of the Sixteenth Amendment confirm that point. So does the amendment's context. and the Supreme Court's near-contempraneous decision in Eisner v. Macomber. All evidence demonstrates that the original meaning of the Sixteenth Amendment is the commonsense one: realization is a precondition for income; money must come into the hands of a taxpayer in order to be taxable "income."
