Will This Case Destroy the Tax Code?

I’m back. I hope everyone is ready for a great 2024 and that your year will be healthy, prosperous, happy, and fulfilling.

We know our opponents don’t want any of that for us.

Deplorables don’t deserve good things.

Without question, this will be an interesting year, and perhaps one of the most “historical” in recent memory.

The political theater surrounding the presidential election alone will deserve its own chapter in future historical texts/

If Trump wins, get ready for the real fun.

If he’s kept off the ballot in several States, that will also be quite significant and dangerous.

I’ll talk more about that tomorrow.

But today, let’s talk taxes. We’ve turned the calendar to 2024 and the tax man cometh looking for his treasure in a few short months.

A pending Supreme Court case could upend the tax code, at least that is what we are being told.

It wouldn’t change much for the average person, but any action on the government’s ability to tax is significant.

What is a direct tax? What is an indirect tax? What is income?

These questions have been asked since the 1780s and have always been politically driven.

During the Trump administration, the Congress passed a tax law that allowed for the government to retroactively charge people for money they earned from foreign corporations. One American couple has challenged the penalty, They contend that corporate earnings are not realized and therefore cannot be taxed.

The Supreme Court will get to determine the fate of this part of the tax code. It should have been challenged as an ex post facto law, but that is not how the case is being presented. Even some of the Supreme Court Justices raised this point, meaning they could rule the penalty to be illegal while leaving the rest of the code in place.

That will probably be the outcome if I had to guess, and it will be a 5-4 majority that does it.

The Court can’t rock the boat too much.

This might seem like an “in the weeds” discussion, but there are larger historical implications for this case, namely who do we define a direct or indirect tax. The case of Hylton v. United States in 1796 should be our starting point, a case I cover in my McClanahan Academy class, How the Supreme Court Screwed Up America.

I also address it in How Alexander Hamilton Screwed Up America.

But I also give you a bit of a rundown on Episode 914 of The Brion McClanahan Show.