The challenge of a Washington-based married couple to an obscure provision of the 2017 Republican tax code has the potential to become “the most important corporate tax case in a century.” With far-reaching consequences for government finances, critical social programmes, and Congress’ constitutional ability to levy income taxes.
Supreme Court Case Could Lead to $270 Billion Tax Windfall for Multinational Corporations, Including Tech Giants
The Roosevelt Institute and the Institute on Taxation and Economic Policy (ITEP) presented a new report on Wednesday.
According to the policy groups, if the conservative-dominated United States Supreme Court sides with the plaintiffs in Moore v. United States, which the justices are due to hear in December, nearly 400 multinational firms may earn more than $270 billion in tax relief. Apple, Microsoft, Pfizer, Johnson & Johnson, and Google will benefit even more.
According to the Roosevelt Institute and ITEP, Chief Justice John Roberts and Associate Justice Samuel Alito possess shares in 19 companies. If the courts overturn the 2017 law’s required repatriation tax, they stand to collect a total of $30 billion in tax savings. A one-time tax on gains accumulated by multinational firms abroad.
Supreme Court Decision Could Potentially Trigger a $340 Billion Budget Deficit and Massive Corporate Tax Cuts
However, the case could have far-reaching consequences beyond the abolition of the repatriation tax. This was expected to generate $340 billion in federal revenue over a ten-year period.
“At the best of times, blowing a $340 billion hole in the federal budget would be catastrophic,” said Matt Gardner, senior fellow at ITEP and co-author of the new paper. “And that is exactly what would happen if the court invalidates the transition tax in its Moore decision.” Possibly the most expensive Supreme Court ruling in history. And it’s difficult to think of a more worthy group of tax cut recipients than corporations. The removal of this tax would generate at least $271 billion.”
“The Roberts Court could decide with a stroke of a pen to simultaneously forgive big business decades’ worth of tax dues.”