(Slip Opinion) OCTOBER TERM, 2023 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is 

being done in connection with this case, at the time the opinion is issued. 

The syllabus constitutes no part of the opinion of the Court but has been 

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

MOORE ET UX. v. UNITED STATES 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE NINTH CIRCUIT 

No. 22–800. Argued December 5, 2023—Decided June 20, 2024 

Congress generally taxes the income of American business entities in one 

of two ways. Some entities, such as S corporations and partnerships,

are taxed on a pass-through basis, where the entity itself does not pay 

taxes. 26 U. S. C. §§1361–1362. Instead, the entity’s income is 

attributed to the shareholders or partners, who then pay taxes on that 

income even if the entity has not distributed any money or property to 

them. §§61(a)(12), 701, 1366(a)–(c). Other business entities do pay 

taxes directly on their income. Those entities’ shareholders ordinarily 

are not taxed on that income but are taxed when the entity distributes

a dividend or when the shareholder sells shares. 

Congress treats American-controlled foreign corporations as passthrough entities. Subpart F of the Internal Revenue Code attributes

income of those business entities to American shareholders and taxes 

those shareholders on that income. §§951–952. Subpart F, however,

applies only to a small portion of the foreign corporation’s income, 

mostly passive income. In 2017, Congress passed the Tax Cuts and 

Jobs Act. As relevant here, Congress imposed a one-time, backwardlooking, pass-through tax on some American shareholders of 

American-controlled foreign corporations to address the trillions of 

dollars of undistributed income that had been accumulated by those 

foreign corporations over the years. Known as the Mandatory

Repatriation Tax, the tax imposed a rate from 8 to 15.5 percent on the 

pro rata shares of American shareholders. §§965(a)(1), (c), (d). 

In this case, petitioners Charles and Kathleen Moore invested in the

American-controlled foreign corporation KisanKraft. From 2006 to 

2017, KisanKraft generated a great deal of income but did not 

distribute that income to its American shareholders. At the end of the 

2017 tax year, application of the new MRT resulted in a tax bill of 
 

 

 

 

 

2 MOORE v. UNITED STATES 

Syllabus 

$14,729 on the Moores’ pro rata share of KisanKraft’s accumulated 

income from 2006 to 2017. The Moores paid the tax and then sued for

a refund, claiming, among other things, that the MRT violated the 

Direct Tax Clause of the Constitution because, in their view, the MRT 

was an unapportioned direct tax on their shares of KisanKraft stock. 

The District Court dismissed the suit, and the Ninth Circuit affirmed. 

Held: The MRT—which attributes the realized and undistributed income 

of an American-controlled foreign corporation to the entity’s American 

shareholders, and then taxes the American shareholders on their 

portions of that income—does not exceed Congress’s constitutional

authority. Pp. 5–24. 

(a) Article I of the Constitution affords Congress broad power to lay

and collect taxes. That power includes direct taxes—those imposed on 

persons or property—and indirect taxes—those imposed on activities 

or transactions. Direct taxes must be apportioned among the States 

according to each State’s population, while indirect taxes are 

permitted without apportionment but must “be uniform throughout

the United States,” §8, cl. 1. Taxes on income are indirect taxes, and 

the Sixteenth Amendment confirms that taxes on income need not be 

apportioned. Pp. 5–7.

(b) The Government argues that the MRT is a tax on income and 

therefore need not be apportioned. The Moores contend that the MRT 

is a tax on property and that the tax is therefore unconstitutional

because it is not apportioned. Income, the Moores argue, requires 

realization, and the MRT does not tax any income that they have 

realized. But the MRT does tax realized income—namely, the income

realized by KisanKraft, which the MRT attributes to the shareholders.

This Court’s longstanding precedents, reflected in and reinforced by 

Congress’s longstanding practice, confirms that Congress may 

attribute an entity’s realized and undistributed income to the entity’s 

shareholders or partners and then tax the shareholders or partners on

their portions of that income. Pp. 8–16.

(1) The Court’s longstanding precedents plainly establish that, 

when dealing with an entity’s undistributed income, Congress may 

either tax the entity or tax its shareholders or partners. Whichever 

method Congress chooses, this Court has held that the tax remains a 

tax on income. In Burk-Waggoner Oil Assn. v. Hopkins, 269 U. S. 110, 

the Court held that the status of a business entity under state law

could not limit Congress’s power to tax a partnership’s income as it 

chose, taxing either the partnership or the partners. Id., at 114. The 

Court reiterated that principle in Burnet v. Leininger, 285 U. S. 136. 

Then, in Heiner v. Mellon, 304 U. S. 271, the Court reaffirmed that 

Congress may choose to tax either the partnership or the partners on

the partnership’s undistributed income, even where state law did not 
 

 

 

 

Cite as: 602 U. S. ____ (2024) 3 

Syllabus 

allow the partners to personally receive the income. The principle 

articulated in Heiner also applies to corporations and their 

shareholders. Helvering v. National Grocery Co., 304 U. S. 282. This 

line of precedents remains good law and establishes the clear principle

that Congress can attribute the undistributed income of an entity to 

the entity’s shareholders or partners and tax the shareholders or 

partners on their pro rata share of the entity’s undistributed income. 

Notably, the principle has repeatedly been invoked by the lower courts 

in upholding subpart F.

The Moores’ reliance on Eisner v. Macomber, 252 U. S. 189, which 

predates the Heiner and Helvering line of cases, is misplaced. There 

the question was whether a distribution of additional stock to all 

existing shareholders was taxable income. The Court said no, that 

income requires realization and that there was no change in the value 

of the shareholders’ total stock holdings in the corporation before and

after the stock distribution. The Court said separately in dicta that

“what is called the stockholder’s share in the accumulated profits of 

the company is capital, not income.” 252 U. S., at 219. The Moores’ 

interpret that language to mean that a tax attributing an entity’s 

undistributed income to its shareholders or partners is not an income 

tax. The clear and definitive holdings in Burk-Waggoner Oil, Heiner, 

and Helvering render the Moores’ reading of Eisner implausible.

Those cases squarely addressed attribution and allowed it, whereas 

Eisner did not address attribution. Pp. 9–14. 

(2) Congress’s longstanding practice of taxing the shareholders or 

partners of a business entity on the entity’s undistributed income 

reflects and reinforces the Court’s precedents. For example, Congress 

passed an 1864 income-tax law that taxed shareholders or partners on 

“the gains and profits of all companies.” 13 Stat. 282. In 1913, 

Congress enacted a new income tax that, among other things, taxed

partners on their “share of the profits of a partnership.” 38 Stat. 169. 

As new business entities arose, Congress employed a similar approach

to S corporations, 26 U. S. C. §§1361–1362; American shareholders of 

foreign business entities, 50 Stat. 822; and American shareholders of 

American-controlled foreign corporations, 26 U. S. C. §§951, 952, 957.

Pp. 14–16. 

(c) The Moores attempt to distinguish the MRT from those taxes 

long imposed by Congress and long upheld by this Court and argue 

that only the MRT is unconstitutional. Their ad hoc distinctions do 

not undermine the clear rule established by this Court’s precedents. 

First, the Moores argue that taxes on partnerships are distinguishable

from the MRT and not controlled by precedent because partnerships 

are not separate entities from their partners. But that assertion is 

incorrect. When the Sixteenth Amendment was ratified, the courts, 
 

4 MOORE v. UNITED STATES 

Syllabus 

Congress, and state legislatures treated partnerships as separate

entities in many contexts, and numerous States imposed taxes directly

on partnerships for partnership income. The federal and state 

treatment of partnerships as separate legal entities for tax purposes 

contravenes the Moores’ theory. Second, the Moores argue that taxes 

on S corporations are distinguishable from the MRT because 

shareholders of S corporations choose to be taxed directly on

corporation income. But consent cannot explain Congress’s authority 

to tax the shareholders of S corporations directly on corporate income. 

Rather, S corporations are another example of Congress’s authority to

either tax the corporation itself on corporate income or attribute the 

undistributed income to the shareholders and tax the shareholders. 

Third, the Moores try to distinguish Congress’s long history of taxing

shareholders of closely held foreign corporations—including through 

subpart F—on the ground that those laws apply “the doctrine of

constructive realization.” That term seems to be a one-off label created 

by the Moores to allow them to sidestep any existing tax that does not 

comport with their proposed constitutional rule. In any event, the 

Moores’ constructive-realization theory does not distinguish the MRT

from subpart F and other pass-through taxes. For example, the

Moores claim that constructive realization turns on a sufficient degree

of control over the entity. But the level of shareholder control with the 

MRT (at least 10 percent) is the same as under the longstanding 

subpart F tax. And if, as the Moores concede, subpart F is not

unconstitutional under the “constructive realization” theory, then the

MRT is likewise not unconstitutional on that theory. Pp. 16–22. 

(d) The Court’s holding is narrow and limited to entities treated as 

pass-throughs. Nothing in this opinion should be read to authorize 

any hypothetical congressional effort to tax both an entity and its 

shareholders or partners on the same undistributed income realized 

by the entity. Nor does this decision attempt to resolve the parties’

disagreement over whether realization is a constitutional requirement 

for an income tax. Pp. 22–24. 

36 F. 4th 930, affirmed. 

KAVANAUGH, J., delivered the opinion of the Court, in which 

ROBERTS, C. J., and SOTOMAYOR, KAGAN, and JACKSON, JJ., joined.

JACKSON, J., filed a concurring opinion. BARRETT, J., filed an opinion

concurring in the judgment, in which ALITO, J., joined. THOMAS, J., filed 

a dissenting opinion, in which GORSUCH, J., joined. 
 

_________________ 

_________________ 

Cite as: 602 U. S. ____ (2024) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

United States Reports. Readers are requested to notify the Reporter of 

Decisions, Supreme Court of the United States, Washington, D. C. 20543, 

pio@supremecourt.gov, of any typographical or other formal errors. 

SUPREME COURT OF THE UNITED STATES 

No. 22–800 

CHARLES G. MOORE, ET UX., PETITIONERS 

v. UNITED STATES 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT 

[June 20, 2024] 

JUSTICE KAVANAUGH delivered the opinion of the Court. 

For tax purposes, Congress has long treated some 

corporations and partnerships as pass-throughs: Congress

does not tax the entity on its income, but instead attributes 

the undistributed income of the entity to the shareholders

or partners and then taxes the shareholders or partners on 

that income. This Court has long upheld those taxes.

Since 1962, Congress has likewise treated Americancontrolled foreign corporations as pass-throughs. That 

1962 law (known as subpart F) attributes certain income, 

mostly passive income, of American-controlled foreign 

corporations to their American shareholders and then taxes

those shareholders on that income. 

In 2017, Congress enacted a new law that attributes more 

income, including active business income, of Americancontrolled foreign corporations to their American 

shareholders and then taxes those shareholders on that 

income. The question is whether that 2017 tax (known as

the Mandatory Repatriation Tax or MRT) is constitutional 

under Article I, §§8 and 9 and the Sixteenth Amendment. 

This Court’s longstanding precedents establish that the

answer is yes. 
 

 

 

2 MOORE v. UNITED STATES 

Opinion of the Court 

I 

A 

In general, Congress taxes the income of American 

business entities such as corporations and partnerships in 

one of two ways. 

First, some entities such as S corporations and 

partnerships are taxed on a pass-through basis. (S

corporations are corporations with 100 or fewer 

shareholders where the shareholders have elected to be 

taxed on a pass-through basis. 26 U. S. C. §§1361–1362.) 

Instead of the entity itself paying taxes, income is 

attributed to the entity’s owners, such as shareholders or 

partners, who then pay taxes on the income of the entity

even if the entity has not distributed any money or property 

to them. §§61(a)(12), 701, 1366(a)–(c).

Second, other entities are taxed directly on their income. 

For example, some corporations file a return and pay taxes 

each year just like individual taxpayers. §11(a). When a 

corporation pays taxes on its income, its shareholders are

ordinarily not taxed on that income. Instead, the 

shareholders typically pay taxes either when the 

corporation distributes money, stock, or other property to 

them as a dividend or when the shareholders sell their 

shares and have capital gains. §§61(a)(7), 1001. But the 

shareholders are not taxed on the corporate income itself.

Congress has devised more nuanced rules for foreign

entities such as foreign corporations. For legal and

practical reasons, Congress generally does not directly tax 

foreign corporations, including American-controlled foreign

corporations, on the income that they earn outside of the 

United States. Instead, Congress has imposed some taxes

on income of those corporations on a pass-through basis. 

Most notably, starting in 1962, in what is known as

subpart F of the Internal Revenue Code, Congress has 

treated American-controlled foreign corporations as passthrough entities: Subpart F attributes income of the 
 

Cite as: 602 U. S. ____ (2024) 3 

Opinion of the Court 

corporation to American shareholders, and taxes those

American shareholders on that income. 26 U. S. C. §§951– 

952. But subpart F applies only to a small portion of the

foreign corporation’s income, mostly passive income. 

In 2017, Congress passed and President Trump signed

the Tax Cuts and Jobs Act. 131 Stat. 2054. In a variety of

ways not relevant to this case, the Act altered the United

States’ approach to international corporate taxation. The 

primary goal was to encourage Americans who controlled 

foreign corporations to invest earnings from their foreign

investments back in the United States instead of abroad. 

As relevant here, one piece of that intricate and multifaceted 2017 Act imposed a new, one-time pass-through tax 

on some American shareholders of American-controlled 

foreign corporations. That one-time tax addressed one of 

the problems that had arisen under the old system: For 

decades before the 2017 Act, American-controlled foreign 

corporations had earned and accumulated trillions of

dollars in income abroad that went almost entirely untaxed

by the United States. The foreign corporations themselves

were not taxed on their income. And other than subpart F, 

which applies mostly to passive income, the undistributed 

income of those foreign corporations was not attributed to 

American shareholders for the shareholders to be taxed. 

As part of the complicated transition to a more territorial 

system, the 2017 Act imposed a one-time, backward-looking 

tax on that accumulated income. That backward-looking 

tax is known as the Mandatory Repatriation Tax or MRT. 

§965. Similar in structure to subpart F, the MRT attributed 

the long-accumulated and undistributed income of 

American-controlled foreign corporations to American

shareholders, and then taxed those American shareholders 

on their pro rata shares of that long-accumulated income at 

a rate from 8 to 15.5 percent. §§965(a), (c), (d).1 

—————— 1 The Act also imposed a similar pass-through tax going forward. 
 

 

4 MOORE v. UNITED STATES 

Opinion of the Court 

B 

In 2006, Charles and Kathleen Moore invested $40,000 

in an American-controlled foreign corporation that one of 

their friends had started in India. In return, the Moores 

received a 13-percent ownership share. The company,

KisanKraft, generated a great deal of income. But as of 

2017, KisanKraft had not distributed that income to its 

American shareholders, including the Moores, meaning

that neither KisanKraft nor the Moores had paid U. S. 

taxes on that income. 

The MRT applied to the Moores because of their 

investment in KisanKraft. By the end of the 2017 tax year,

the Moores’ pro rata share of KisanKraft’s accumulated

income from 2006 to 2017 totaled about $508,000. After 

factoring in a deduction that is not relevant here, the 

Moores declared $132,512 in income under the MRT based 

on their KisanKraft shares. They owed $14,729 in taxes on

that income. 

The Moores paid that amount, then sued for a refund.

They claimed that the MRT was unconstitutional for two 

reasons. First, they argued that the MRT violated the 

Direct Tax Clause of the Constitution because, in their 

view, the MRT was an unapportioned direct tax on their 

shares of KisanKraft stock. Second, they contended that 

the MRT violated the Due Process Clause of the Fifth 

Amendment because it applied retroactively to past income.

The District Court dismissed the suit, and the U. S. Court 

of Appeals for the Ninth Circuit affirmed. The Court of 

Appeals held that the MRT constitutes a tax on income

within the meaning of the Constitution because 

“KisanKraft earned significant income, and the MRT

assigns only a pro-rata share of that income to the Moores.” 

36 F. 4th 930, 936–937 (2022). The Court of Appeals also 

—————— 

§951A. That tax applies to what is referred to as “global intangible lowtaxed income.” §951A(a). That tax is not at issue in this case. 
Cite as: 602 U. S. ____ (2024) 5 

Opinion of the Court 

rejected the Moores’ due process claim regarding 

retroactivity. Id., at 938–939. 

The Moores sought review in this Court, raising only

their Direct Tax Clause argument. This Court granted 

certiorari. 599 U. S. ___ (2023). 

II 

We must decide whether the 2017 Mandatory 

Repatriation Tax, or MRT, exceeds Congress’s

constitutional authority. To analyze that question, we

begin with a brief review of Congress’s taxing power under

the Constitution. 

After Independence in 1776 and under the Articles of 

Confederation in effect from 1781 to 1789, the Federal 

Government relied primarily on contributions from the

States for revenue. The Federal Government’s expenses

and needs sometimes far outpaced the contributions that 

the States were willing to provide. As George Washington 

famously recognized during the Revolutionary War, 

reliance on the States to fund the National Government 

hampered important national priorities—including the war 

against the British. 12 Papers of George Washington: 

Revolutionary War Series 683–687 (P. Chase & F. Grizzard 

eds. 2002) (letter from Valley Forge).

The National Government’s continuing revenue problems

under the Articles of Confederation helped prompt the

Constitutional Convention that convened in Philadelphia in

the summer of 1787. The Federalist No. 30 (A. Hamilton). 

The Framers responded to the revenue problem by granting 

Congress an expansive taxing power.

Article I of the Constitution affords Congress broad

“Power To lay and collect Taxes, Duties, Imposts and 

Excises.” Art. I, §8, cl. 1. That power includes “‘two great 

classes of’” taxes—direct taxes and indirect taxes. 

Brushaber v. Union Pacific R. Co., 240 U. S. 1, 13 (1916).

 Generally speaking, direct taxes are those taxes imposed 
 

6 MOORE v. UNITED STATES 

Opinion of the Court 

on persons or property. See National Federation of 

Independent Business v. Sebelius, 567 U. S. 519, 570–571 

(2012). As a practical matter, however, Congress has rarely 

enacted direct taxes because the Constitution requires that

direct taxes be apportioned among the States. To be 

apportioned, direct taxes must be imposed “in Proportion to

the Census of Enumeration.” U. S. Const., Art. I, §9, cl. 4; 

see also §2, cl. 3. In other words, direct taxes must be 

apportioned among the States according to each State’s

population.

So if Congress imposed a property tax on every American 

homeowner, the citizens of a State with five percent of the 

population would pay five percent of the total property tax,

even if the value of their combined property added up to

only three percent of the total value of homes in the United 

States. To pay five percent, the tax rate on the citizens of 

that State would need to be substantially higher than the 

tax rate in a neighboring State with the same population

but more valuable homes. 

To state the obvious, that kind of complicated and 

politically unpalatable result has made direct taxes difficult 

to enact. Indeed, the parties have cited no apportioned

direct taxes in the current Internal Revenue Code, and it 

appears that Congress has not enacted an apportioned tax 

since the Civil War. See 12 Stat. 297; E. Jensen, The 

Taxing Power: A Reference Guide to the United States 

Constitution 89 (2005).

 By contrast, indirect taxes are the familiar federal taxes 

imposed on activities or transactions. That category of 

taxes includes duties, imposts, and excise taxes, as well as 

income taxes. U. S. Const., Art. I, §8, cl. 1; Amdt. 16. Under 

the Constitution, indirect taxes must “be uniform 

throughout the United States.” Art. I, §8, cl. 1. A “‘tax is 

uniform when it operates with the same force and effect in

every place where the subject of it is found.’” United States 

v. Ptasynski, 462 U. S. 74, 82 (1983). 
 

Cite as: 602 U. S. ____ (2024) 7 

Opinion of the Court 

Because income taxes are indirect taxes, they are

permitted under Article I, §8 without apportionment. As 

this Court has said, Article I, §8’s grant of taxing power “is 

exhaustive,” meaning that it could “never” reasonably be

“questioned from the” Founding that it included the power 

“to lay and collect income taxes.” Brushaber, 240 U. S., at 

12–13. In 1861, Congress enacted the Nation’s first

unapportioned income tax. 12 Stat. 309. The Civil War 

income tax was recognized as an indirect tax “under the 

head of excises, duties and imposts.” Brushaber, 240 U. S., 

at 15; see also Springer v. United States, 102 U. S. 586, 598, 

602 (1881).

In 1895, however, in Pollock v. Farmers’ Loan & Trust 

Co., this Court held that a tax on income from property

equated to a tax on the property itself, and thus was a direct 

tax that had to be apportioned among the States. 158 U. S. 

601, 627–628. The Pollock decision sparked significant 

confusion and controversy throughout the United States. 

Congress and the States responded to Pollock by

approving a new constitutional amendment. Ratified in 

1913, the Sixteenth Amendment rejected Pollock’s 

conflation of (i) income from property and (ii) the property

itself. The Amendment provides: “The Congress shall have 

power to lay and collect taxes on incomes, from whatever 

source derived, without apportionment among the several

States, and without regard to any census or enumeration.” 

U. S. Const., Amdt. 16 (emphasis added). 

Therefore, the Sixteenth Amendment expressly

confirmed what had been the understanding of the 

Constitution before Pollock: Taxes on income—including 

taxes on income from property—are indirect taxes that

need not be apportioned. Brushaber, 240 U. S., at 15, 18. 

Meanwhile, property taxes remain direct taxes that must 

be apportioned. See Helvering v. Independent Life Ins. Co., 

292 U. S. 371, 378–379 (1934). 
 

 

 

8 MOORE v. UNITED STATES 

Opinion of the Court 

III 

With that background, we turn to the 2017 Mandatory 

Repatriation Tax. The MRT is not apportioned among the 

States. The Government argues that the MRT is a tax on 

income and therefore need not be apportioned. The Moores 

contend that the MRT is a tax on property, rather than a 

tax on income, and that the tax is therefore 

unconstitutional because it is not apportioned. 

What distinguishes income from property? The Moores 

argue that income requires realization. The Moores say 

that realization occurs when gains come into the taxpayer’s

coffers—for example, through wages, sales, or dividends, as

distinct from appreciation in the value of a home, stock

investment, or other property. And the Moores contend 

that the MRT does not tax any income that they have

realized. 

Critically, however, the MRT does tax realized income— 

namely, income realized by the corporation, KisanKraft.

The MRT attributes the income of the corporation to the

shareholders, and then taxes the shareholders (including 

the Moores) on their share of that undistributed corporate 

income. 

So the precise and narrow question that the Court 

addresses today is whether Congress may attribute an

entity’s realized and undistributed income to the entity’s

shareholders or partners, and then tax the shareholders or 

partners on their portions of that income. This Court’s 

longstanding precedents, reflected in and reinforced by

Congress’s longstanding practice, establish that the answer 

is yes.2 

—————— 2 As discussed below, infra, at 22–24, our analysis today does not 

address the distinct issues that would be raised by (i) an attempt by

Congress to tax both the entity and the shareholders or partners on the 

entity’s undistributed income; (ii) taxes on holdings, wealth, or net

worth; or (iii) taxes on appreciation. 
 

Cite as: 602 U. S. ____ (2024) 9 

Opinion of the Court 

A 

Congress sometimes chooses to tax a business entity 

itself on the income that the entity earns. Alternatively,

Congress sometimes elects to treat an entity as a passthrough—attributing the entity’s undistributed income to 

the shareholders or partners and then taxing the 

shareholders or partners on that income. Either way, this 

Court has held that the tax remains a tax on income—and 

thus an indirect tax that need not be apportioned. 

In 1925, in Burk-Waggoner Oil Assn. v. Hopkins, the 

Court articulated that fundamental principle. 269 U. S. 

110. The case involved a tax on the income of an entity that

state law treated as a partnership. Under state law, the 

partnership’s property was considered the property of the 

partners. For that reason, the partnership argued that

Congress had to tax the partners on the income and could

not tax the partnership. 

This Court rejected that argument. The Court stated: 

“Neither the conception of unincorporated associations 

prevailing under the local law, nor the relation under that 

law of the association to its shareholders, nor their relation 

to each other and to outsiders, is of legal significance as 

bearing upon the power of Congress to determine how and

at what rate the income of the joint enterprise shall be 

taxed.” Id., at 114. In other words, Congress could tax the 

income as it chose, taxing either the partnership or the 

partners on the partnership’s undistributed income. So the 

tax on the partnership was proper.

In 1932, in Burnet v. Leininger, the Court reiterated that 

principle. 285 U. S. 136. There, the Court considered “the 

validity” of a tax attributing partnership income to 

partners. Id., at 142. The Court again held that “Congress,

having the authority to tax the net income of partnerships,

could impose the liability upon the partnership directly,” or

it could impose tax liability “upon the individuals carrying

on business in partnership.” Ibid. (quotation marks 
 

 

10 MOORE v. UNITED STATES 

Opinion of the Court 

omitted).

Next, in 1938 in Heiner v. Mellon, the Court again 

addressed a situation closely akin to the Moores’ case 

here—a tax on partners for the undistributed income of 

their partnership. 304 U. S. 271. In that case, the 

partnership earned income, but state law did not allow the 

partners to personally receive the income. Nonetheless, 

under the relevant federal tax law, the individual partners

owed taxes on the partnership’s income. The partners

argued that Congress could not tax them on income that

they did not and could not personally receive. 

This Court upheld the tax on the partners, reasoning that 

it was immaterial that the partners did not actually receive 

the income earned by the partnership. The Court 

reaffirmed that Congress may choose to tax either the 

partnership or the partners on the partnership’s

undistributed income. 

The principle articulated by this Court in Heiner v. 

Mellon also applies to corporations and their shareholders. 

On the same day in 1938 that the Court decided Heiner v. 

Mellon, the Court also decided Helvering v. National 

Grocery Co. In that case, the Court ruled that the 

controlling shareholder of a corporation could not “prevent 

Congress, if it chose to do so, from laying on him 

individually the tax on the year’s profits.” 304 U. S. 282, 

288. Citing Heiner v. Mellon, the Court stated that 

Congress may tax shareholders of the corporation on the 

corporation’s undistributed income, in much the same way

that Congress can tax the partners of a partnership on the 

partnership’s undistributed income. 304 U. S., at 288–289. 

So by 1938, this Court’s precedents had established a 

clear rule that directly contradicts the Moores’ argument in 

this case. That line of precedent remains good law to this 

day. Indeed, since then, it has gone without serious 

question in both Congress and the federal courts that

Congress can attribute the undistributed income of an 
Cite as: 602 U. S. ____ (2024) 11 

Opinion of the Court 

entity to the entity’s shareholders or partners, and tax the

shareholders or partners on their pro rata share of the

entity’s undistributed income. 

Most notably, the courts have repeatedly invoked that 

principle in upholding subpart F, which Congress enacted 

in 1962. Like the MRT, subpart F treats certain foreign 

corporations as pass-throughs by attributing undistributed

income of foreign corporations to their American 

shareholders, and then taxing the American shareholders

on their pro rata shares of the income. As the Second 

Circuit concluded in a leading case upholding subpart F: 

The constitutional challenge to subpart F “borders on the 

frivolous” in light of Heiner v. Mellon. Garlock, Inc. v. 

Commissioner, 489 F. 2d 197, 202–203, and n. 5 (1973); see 

also Estate of Whitlock v. Commissioner, 59 T. C. 490, 507 

(1972) (The “Supreme Court’s pronouncements have been

to the effect that taxation of undistributed current 

corporate income at the stockholder level rather than at the

corporate level is within the congressional power”), aff’d in

relevant part, 494 F. 2d 1297, 1301 (CA10 1974) (adopting 

the Tax Court’s analysis); B. Bittker & L. Lokken, Federal

Taxation of Income, Estates and Gifts ¶1.2.4 (2024) (noting 

the consensus in favor of Congress’s power to tax foreign

corporations as pass-through businesses); cf. Eder v. 

Commissioner, 138 F. 2d 27, 28 (CA2 1943) (“In a variety of

circumstances it has been held that the fact that the 

distribution of income is prevented by operation of law, or 

by agreement among private parties, is no bar to its 

taxability”).

In response to that dispositive line of precedents against 

them, the Moores invoke the Court’s earlier 1920 decision 

in Eisner v. Macomber, 252 U. S. 189. The Moores argue 

that some language in Eisner v. Macomber is inconsistent 

with the rule subsequently established in Burk-Waggoner 

Oil Assn. v. Hopkins, Heiner v. Mellon, and Helvering v. 

National Grocery Co. and followed ever since by Congress 
 

 

 

 

12 MOORE v. UNITED STATES 

Opinion of the Court 

and the federal courts. 

The Moores’ reliance on Eisner v. Macomber with respect 

to the attribution issue is misplaced. Importantly, Eisner 

v. Macomber was not a case about Congress’s power to 

attribute the income of an entity to the entity’s

shareholders or partners. Rather, the Court in Eisner v. 

Macomber addressed a situation where a corporation

created and distributed additional stock to existing

shareholders. 252 U. S., at 200. The corporation

distributed the additional shares of stock in proportion to

each shareholder’s percentage of ownership. Id., at 210– 

211. So the actual value of the shareholders’ total stock 

holdings in the corporation did not change. Ibid. 

The question in Eisner v. Macomber was whether the new 

stock was nonetheless taxable income for the shareholders. 

Id., at 199. The Court said no. Id., at 212. The Court 

reasoned that there was no change in the value of the

shareholders’ total stock holdings in the corporation before

and after the stock distribution. Id., at 210–211. So the 

new stock did not represent any kind of economic gain to

the shareholders. Ibid. And the Court further stated that 

income requires realization. Id., at 207, 211–212. Yet 

neither the corporation nor the shareholders had realized 

income from the corporation’s creation and distribution of 

additional stock. Id., at 210–213.3 

—————— 3 The Government argues that a gain does not need to be realized to 

constitute income under the Constitution. The Government contends 

that Eisner v. Macomber’s discussion of realization was dicta because the 

stock dividend did not represent any kind of economic gain (realized or 

unrealized) for the shareholders. The Government further contends that 

Eisner v. Macomber’s discussion of realization has, in any event, been 

abrogated by later decisions of this Court, such as Helvering v. Bruun, 

309 U. S. 461 (1940), Helvering v. Griffiths, 318 U. S. 371 (1943), and 

Commissioner v. Glenshaw Glass Co., 348 U. S. 426 (1955). Because the 

MRT taxes realized income—namely, income realized by the corporation 

and attributed to the shareholders—we do not address the Government’s 

argument that a gain need not be realized to constitute income under the 
 

Cite as: 602 U. S. ____ (2024) 13 

Opinion of the Court 

Separate from that analysis, the Court went on to say in

dicta that “what is called the stockholder’s share in the 

accumulated profits of the company is capital, not income.” 

Id., at 219. Because the corporation had already paid taxes

on its income, that statement and the surrounding 

discussion may have been designed to cast doubt on the 

legality of double taxation—taxing both the corporation and 

its shareholders on the corporation’s undistributed income.

See, e.g., Brief for American College of Tax Counsel as 

Amicus Curiae 16–17; Brief for Tax Law Center at NYU 

Law et al. as Amici Curiae 6–7. 

But the Moores interpret that language in Eisner v. 

Macomber to mean that a tax attributing an entity’s 

undistributed income to its shareholders or partners is not 

an income tax. The Moores’ reading is implausible. The 

Court in Eisner v. Macomber did not purport to address 

attribution, no doubt because the tax at issue there did not 

attribute income of the corporation to the shareholders. 

And if there were any ambiguity on that point, it was

quickly eliminated by this Court’s clear and definitive

holdings in Burk-Waggoner Oil Assn. v. Hopkins, Heiner v. 

Mellon, and Helvering v. National Grocery Co. In those 

three cases, unlike in Eisner v. Macomber, the Court 

squarely addressed attribution—and allowed it. None of 

those cases so much as mentioned Eisner v. Macomber, 

which is not surprising because, to reiterate, Eisner v. 

Macomber did not address attribution. So whatever else 

Eisner v. Macomber might stand for, it does not proscribe 

attribution and thus has no bearing on the attribution issue

in this case. 

To sum up: The Court’s longstanding precedents plainly 

establish that, when dealing with an entity’s undistributed

income, Congress may tax either (i) the entity or (ii) its 

—————— 

Constitution. See also infra, at 22–24. 
 

 

 

14 MOORE v. UNITED STATES 

Opinion of the Court 

shareholders or partners.4 

B 

Consistent with this Court’s case law, Congress has long 

taxed the shareholders and partners of business entities on

the entities’ undistributed income. That longstanding 

congressional practice reflects and reinforces this Court’s

precedents upholding those kinds of taxes. 

In 1864, for example, Congress passed and President 

Lincoln signed an income-tax law that taxed individuals on 

“the gains and profits of all companies, whether 

incorporated or partnership,” in which they were 

shareholders or partners. 13 Stat. 282. In 1871, the Court 

upheld the constitutionality of that tax. Collector v. 

Hubbard, 12 Wall. 1, 18.5 

In 1913, soon after the Sixteenth Amendment was 

ratified, Congress enacted a new income tax on 

shareholders for their share of the incomes of corporations

formed or used to evade taxes. 38 Stat. 166. That 1913 law 

also taxed partners on each partner’s “share of the profits

of a partnership.” Id., at 169. As explained above, the 

Court upheld that approach to partnership taxation in 

Burnet v. Leininger, 285 U. S., at 142, and Heiner v. Mellon, 

304 U. S., at 280. Ever since that 1913 law and those cases, 

the basic partnership-tax rule has been settled: It “is 

axiomatic that each partner must pay taxes on his 

—————— 4 The Government acknowledges that there are due process limits on

attribution to ensure that the attribution is not arbitrary—for example,

limits based on the taxpayer’s relationship to the underlying income. Tr. 

of Oral Arg. 66–67, 96–97; see also Burnet v. Wells, 289 U. S. 670, 678– 

679 (1933). In this Court, the Moores have not raised a due process issue

regarding the attribution of KisanKraft’s income to them. 5 This Court’s 1895 decision in Pollock v. Farmers’ Loan & Trust Co., 

158 U. S. 601, later proscribed unapportioned federal taxation of income 

from property, and therefore overruled that holding of Hubbard. See 

supra, at 7. But in 1913, the Sixteenth Amendment then overruled that 

aspect of Pollock. 
 

Cite as: 602 U. S. ____ (2024) 15 

Opinion of the Court 

distributive share of the partnership’s income without

regard to whether that amount is actually distributed to 

him.” United States v. Basye, 410 U. S. 441, 453 (1973). 

As new kinds of corporate entities arose, Congress

employed a similar approach. For example, in the 1918 

Revenue Act, Congress decided to tax shareholders of

personal service corporations—that is, shareholders of

closely held corporations that earn most of their income 

from the work of their principal owners and shareholders—

“in the same manner as the members of partnerships.” 40 

Stat. 1070. 

And since 1958, the Internal Revenue Code has also 

taxed the shareholders of S corporations in the same way

as partnerships—by taxing the shareholders on their share

of the undistributed income of the corporation. See Bufferd 

v. Commissioner, 506 U. S. 523, 524–525 (1993). S 

corporations are corporations with 100 or fewer 

shareholders where the shareholders have elected to be 

taxed directly on the corporate income. 26 U. S. C. §§1361– 

1362. A majority of the corporations in the United States 

are S corporations, so the taxation of individual 

shareholders of S corporations is widespread.

In addition, Congress has long taxed major American

shareholders of foreign business entities on some of the 

income of those entities. For example, in 1937, Congress 

taxed American shareholders of foreign personal holding

companies on those companies’ undistributed income. 50 

Stat. 822. 

And in 1962, Congress enacted subpart F, which remains

in place to this day. 76 Stat. 1006, 26 U. S. C. §951 et seq. 

To reiterate, subpart F taxes American shareholders of 

American-controlled foreign corporations on several kinds

of undistributed corporate income, mostly passive income. 

§§951, 952, 957. And as noted above, in light of this Court’s

precedents, the Courts of Appeals have uniformly rejected

constitutional challenges to subpart F. See Garlock, 489 
 

 

16 MOORE v. UNITED STATES 

Opinion of the Court 

F. 2d, at 202–203, and n. 5 (the constitutional challenge to

subpart F “borders on the frivolous” in light of Heiner v. 

Mellon); Estate of Whitlock, 494 F. 2d, at 1301. 

In short, before and after ratification of the Sixteenth 

Amendment, Congress has often taxed the shareholders or

partners of a business entity on the entity’s undistributed

income. Such a “[l]ong settled and established practice” can

carry “great weight in” resolving constitutional questions—

and here it reflects and reinforces this Court’s precedents. 

Chiafalo v. Washington, 591 U. S. 578, 592 (2020)

(quotation marks omitted); see also Moore v. Harper, 600 

U. S. 1, 32 (2023) (The Court has “long looked to ‘settled and 

established practice’ to interpret the Constitution” (quoting 

The Pocket Veto Case, 279 U. S. 655, 689 (1929))); Walz v. 

Tax Comm’n of City of New York, 397 U. S. 664, 678 (1970) 

(An “unbroken practice . . . is not something to be lightly

cast aside”); The Federalist No. 37, p. 229 (C. Rossiter ed. 

1961) (J. Madison). 

IV 

The Moores are obviously aware of those longstanding 

congressional practices and Supreme Court precedents, so

they had two choices of how to deal with that stark reality 

in this Court. They could have argued that all of those taxes

are unconstitutional and that all of those precedents should

be overruled. Or in an effort to contain the blast radius of 

their legal theory, they could have tried to distinguish the

MRT from those other taxes and argue that only the MRT 

is unconstitutional. They chose the latter approach. 

To be specific: The Moores explicitly concede that 

partnership taxes, S-corporation taxes, and subpart F taxes 

are income taxes that are constitutional and need not be 

apportioned. Tr. of Oral Arg. 9, 48; Brief for Petitioners 50– 

51. The Moores likewise do not ask the Court to overrule 

any of the precedents that we have discussed above, which 

upheld the attribution of entities’ undistributed income. 
 

Cite as: 602 U. S. ____ (2024) 17 

Opinion of the Court 

Id., at 49–52. 

Instead, the Moores seek to differentiate the MRT from 

all of those other taxes long imposed by Congress and long

upheld by this Court. The Moores have advanced an array 

of ad hoc distinctions to try to explain why those 

longstanding taxes are constitutional and why those 

precedents are correct, and to simultaneously try to explain

why those taxes and precedents do not eviscerate their

argument that the MRT is unconstitutional. But the 

Moores’ effort to thread that needle, although inventive, is 

unavailing.

According to the Moores: (1) taxes on partnerships are 

distinguishable from the MRT and not controlled by

precedent because partnerships are not separate entities 

from their partners; (2) taxes on S corporations are

distinguishable from the MRT and not controlled by

precedent because shareholders of S corporations choose to 

be taxed directly on corporate income; and (3) subpart F

taxes on American shareholders’ portions of undistributed 

foreign corporate income are distinguishable from the MRT 

and not controlled by precedent because those taxes apply 

what the Moores call “constructive realization.” 

To begin, and perhaps most importantly, the Moores’ set

of ad hoc distinctions does not undermine the clear rule 

established by this Court’s precedents: Congress can

choose either to tax the entity on its income or to tax the

entity’s shareholders or partners on their share of the

entity’s undistributed income. Burk-Waggoner Oil Assn. v. 

Hopkins, 269 U. S. 110, 114 (1925). 

In any event, the Moores’ attempted distinctions of the

various taxes fail on their own terms. 

First, the Moores contend that partners can be taxed on 

a partnership’s income only because, as of the time that the 

Sixteenth Amendment was ratified in 1913, partnerships 

were not seen as legal entities separate from the partners.

But that assertion is incorrect. When the Sixteenth 
 

 

18 MOORE v. UNITED STATES 

Opinion of the Court 

Amendment was ratified, the courts, Congress, and state 

legislatures treated partnerships as separate entities in 

many contexts. See, e.g., Forsyth v. Woods, 11 Wall. 484, 

486 (1871) (“The partnership is a distinct thing from the 

partners themselves . . . ”); W. Cowles, The Firm as a Legal 

Person, 57 Central L. J. 343 (1903) (citing many additional

ratification-era cases); see also H. Black, Law of Income 

Taxation Under Federal and State Laws 100 (1913) (The

“undivided earnings of a partnership . . . properly

constitute income of the firm but not of the individual 

partners”); 30 Stat. 545, 547–548 (1898) (federal

bankruptcy law that treated partnerships as separate

entities); F. Burdick, Law of Partnership, ch. 3, §1, pp. 85–

86 (rev. 2d ed. 1906) (It “is becoming more and more

customary for legislation and judicial decisions to treat a 

partnership as an entity”). 

During the time period around ratification of the 

Sixteenth Amendment, moreover, numerous States 

imposed taxes directly on partnerships for partnership

income. 1 S. Rowley, The Modern Law of Partnership §306 

(1916); 2 id., §935, at 1295, and n. 1 (collecting 21 state 

laws); Black 146. And during World War I, Congress

enacted the Revenue Act of 1917, which also imposed a tax

directly on partnerships. 40 Stat. 303. The federal and 

state treatment of partnerships as separate legal entities 

for tax purposes contravenes the Moores’ theory that passthrough taxation is inherent in the nature of partnerships

rather than a legislative choice. 

In short, the Moores are incorrect to claim that 

partnerships were not historically seen as separate taxable 

entities. 

To be sure, courts declined to recognize partnerships as 

separate entities in certain common-law contexts. 1 Rowley

§118; Burdick, ch. 3, §1. But those cases simply 

demonstrate that partnerships were (and are) flexible

entities that can receive flexible legal treatment. Those 
Cite as: 602 U. S. ____ (2024) 19 

Opinion of the Court 

cases are consistent with the longstanding principle

recognized by this Court that “Congress, having the 

authority to tax the net income of partnerships, could

impose the liability upon the partnership directly, as it did 

under the Revenue Act of 1917, or upon the ‘individuals 

carrying on business in partnership.’” Burnet v. Leininger, 

285 U. S. 136, 142 (1932) (citation omitted). As with other 

business entities, Congress may choose whether to tax

(i) the entity or (ii) its shareholders or partners on the

entity’s undistributed income. 

Second, the Moores seek to distinguish the taxation of S 

corporations by saying that shareholders’ choice to become

an S corporation necessarily means that the S corporation’s

income is truly the shareholders’ income. But consent 

cannot explain S-corporation taxation; after all, consent to

taxation as an S corporation can be revoked only if 

shareholders who hold a majority of the corporation’s

shares agree. 26 U. S. C. §1362(d)(1)(B). So, for example,

if shareholders who hold 49 percent of the shares no longer

consent to paying taxes on undistributed earnings, they

nonetheless still must do so. Moreover, there is no reason 

to think that shareholder consent can eliminate the 

apportionment requirement (which is a structural 

requirement of the Constitution) and allow Congress to

enact an otherwise unconstitutional tax. 

In short, the Moores’ consent theory does not explain

Congress’s authority to tax the shareholders of S 

corporations directly on corporate income. Rather, S 

corporations are another example of Congress’s authority to

either tax the corporation itself on corporate income or 

attribute the undistributed income to the shareholders and 

tax the shareholders. 

Third, the Moores try to distinguish Congress’s long

history of taxing shareholders of closely held foreign 

corporations—including through subpart F—on the ground 

that those laws apply “the doctrine of constructive 
 

20 MOORE v. UNITED STATES 

Opinion of the Court 

realization.” Brief for Petitioners 47. 

The Moores have not pointed to any use of the phrase

“constructive realization” in this Court’s case law or the 

Internal Revenue Code. Instead, the term seems to be a 

one-off label woven out of whole cloth by the Moores to allow 

them to sidestep any existing tax, especially subpart F, that 

does not accord with their proposed constitutional rule. See 

Brief for American Tax Policy Institute as Amicus Curiae 

28 (noting that “‘constructive realization’ actually is a new,

amorphous phrase of petitioners’ devising”).

In any event, whatever its label, the Moores’ 

constructive-realization theory does not distinguish the

MRT from subpart F and other pass-through taxes. For 

example, the Moores claim that constructive realization 

turns on a sufficient degree of control over the entity. But 

the level of shareholder control with the MRT (at least 10 

percent) is the same as under the longstanding subpart F 

tax. (And control provides an even less persuasive

distinction for partners and for shareholders of S 

corporations, who may have even less than a 10 percent 

share and still have the entity’s income attributed to them.)

As part of their effort to distinguish the MRT from

subpart F, the Moores also argue that subpart F is limited 

to taxing “‘movable income’” that may have been shifted 

abroad to avoid taxes. Brief for Petitioners 45. But that is 

not accurate. Subpart F also includes income from doing

business in a country under certain sanctions. §952(a)(5).

Moreover, like subpart F, the MRT responds to concerns 

that the owners of American-controlled foreign corporations

keep money offshore to defer taxation. So it is not clear why

the MRT would not also satisfy the Moores’ requirement of

an anti-tax-avoidance purpose.

Therefore, even if we were to accept the Moores’ 

constructive-realization nomenclature and theory, the

Moores’ concession that subpart F imposes taxes on socalled constructively realized income would necessarily 
 

Cite as: 602 U. S. ____ (2024) 21 

Opinion of the Court 

mean that the MRT likewise imposes taxes on 

constructively realized income. After all, the MRT is 

integrated into subpart F’s framework, and it has the same 

essential features as subpart F. If subpart F is not 

unconstitutional under the “constructive realization” 

theory—and the Moores explicitly concede that it is not, Tr.

of Oral Arg. 9—then the MRT is likewise not 

unconstitutional on that theory. 

In short, the Moores cannot meaningfully distinguish the 

MRT from similar taxes such as taxes on partnerships, on 

S corporations, and on subpart F income.6 The upshot is

that the Moores’ argument, taken to its logical conclusion, 

could render vast swaths of the Internal Revenue Code 

unconstitutional. See, e.g., 26 U. S. C. §305(c) (deemed 

stock distributions); §§446, 448 (accrual accounting); §701

(partnership taxation); §§951–965 (subpart F); §951A 

(pass-through tax on global intangible low-taxed income); 

§1256(a) (certain futures contracts); §1272(a) (originalissue discount instruments); §§1361–1379 (S corporations); 

§§2501–2524 (gift taxes). 

And those tax provisions, if suddenly eliminated, would 

deprive the U. S. Government and the American people of 

trillions in lost tax revenue. The logical implications of the

Moores’ theory would therefore require 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 

—————— 6 The MRT applies to income that was realized and accumulated in the 

past by foreign corporations, but not taxed by the United States. In the 

lower courts, the Moores raised a due process retroactivity argument—

that the MRT taxes income that was earned too far in the past. The 

Ninth Circuit rejected that argument based on this Court’s decision in 

United States v. Carlton, 512 U. S. 26, 30 (1994). And the Moores did not 

seek certiorari on that issue. “We do not normally consider a separate 

legal question not raised in the certiorari briefs,” and “see no reason to 

make an exception here.” Kasten v. Saint-Gobain Performance Plastics 

Corp., 563 U. S. 1, 17 (2011); see also this Court’s Rule 14.1(a). 
 

 

22 MOORE v. UNITED STATES 

Opinion of the Court 

Constitution does not require that fiscal calamity.7 

* * * 

The MRT attributes the undistributed income of 

American-controlled foreign corporations to their American 

shareholders, and then taxes the American shareholders on 

that income. By doing so, the MRT operates in the same 

basic way as Congress’s longstanding taxation of 

partnerships, S corporations, and subpart F income. And 

the MRT is consistent with the principles that this Court 

articulated in upholding those kinds of taxes in cases such 

as Burk-Waggoner Oil Assn. v. Hopkins, Heiner v. Mellon, 

and Helvering v. National Grocery Co. The MRT therefore 

falls squarely within Congress’s constitutional authority to 

tax. 

For their part, the dissent and the opinion concurring in

the judgment focus primarily on the realization issue—

namely, whether realization is required for an income tax.

We do not decide that question today. When they reach the 

attribution question that we do decide, the separate 

opinions disagree with our reading of some of the Court’s 

precedents. We respect their views. But as we thoroughly

explained above, we read the Court’s precedents differently. 

That said, we emphasize that our holding today is 

narrow. It is limited to: (i) taxation of the shareholders of 

an entity, (ii) on the undistributed income realized by the

entity, (iii) which has been attributed to the shareholders, 

—————— 7 According to the Moores, because the Internal Revenue Code’s

“definition of ‘gross income’ exerts the full measure of Congress’s taxing

power,” a ruling against them would instantly subject all American 

stockholders to taxes on corporate income. Tr. of Oral Arg. 4–5. That 

claim is entirely incorrect. Congress has chosen to directly tax some 

corporations on their income. See 26 U. S. C. §11. Congress’s choice to 

tax the entity rather than the shareholders controls in that context, just 

as its contrary choice to tax certain shareholders or partners, not the 

entity, on the entity’s undistributed income controls for the MRT, 

partnerships, S corporations, and subpart F. 
Cite as: 602 U. S. ____ (2024) 23 

Opinion of the Court 

(iv) when the entity itself has not been taxed on that

income. In other words, our holding applies when Congress 

treats the entity as a pass-through.8 

To be clear, as we indicated earlier, the Due Process 

Clause proscribes arbitrary attribution. See supra, at 14, 

n. 4. And nothing in this opinion should be read to 

authorize any hypothetical congressional effort to tax both

an entity and its shareholders or partners on the same

undistributed income realized by the entity. In such a 

scenario, the entity would not simply be a traditional passthrough.9 

In addition, as the Government explains, other kinds of

taxes could of course raise different issues. See Tr. of Oral 

Arg. 58–59, 62, 127–128. In its brief and at oral argument,

for example, the Government indicated that a hypothetical

unapportioned tax on an individual’s holdings or property 

(for example, on one’s wealth or net worth) might be

considered a tax on property, not income. See Brief for 

United States 19 (distinguishing an income tax from a tax 

on wealth or net worth because “an income tax targets

economic gain ‘between two points of time’”); Tr. of Oral

Arg. 69, 127–128. 

And the Government further acknowledges that the 

constitutionality of a hypothetical unapportioned tax on

appreciation may depend on, among other things, whether 

realization is a constitutional requirement for an income 

tax. See id., at 58–59, 62, 70, 93–95, 106–108, 126–127; see 

—————— 8The opinion concurring in the judgment reads the Court’s attribution 

precedents to draw a line that might call for a “different” conclusion for

“a tax on shareholders of a widely held or domestic corporation.” Post, at 

1 (opinion of BARRETT, J.). We do not agree that the Court’s precedents 

draw such a line. Nor does our opinion today draw such a line. 9 That issue is distinct from Congress’s well-established practice of 

taxing the corporation on corporate income and then taxing shareholders

when they receive a dividend. See Hellmich v. Hellman, 276 U. S. 233, 

237–238 (1928); see also United States v. Hemme, 476 U. S. 558, 572 

(1986). 
 

24 MOORE v. UNITED STATES 

Opinion of the Court 

also Brief for United States 32. The Moores argue that

realization is a constitutional requirement; the 

Government argues that it is not. To decide this case, we 

need not resolve that disagreement over realization. 

Those are potential issues for another day, and we do not 

address or resolve any of those issues here. As to the 

Moores’ case, Congress has long taxed shareholders of an

entity on the entity’s undistributed income, and it did the

same with the MRT. This Court has long upheld taxes of 

that kind, and we do the same today with the MRT. We 

affirm the judgment of the U. S. Court of Appeals for the 

Ninth Circuit. 

It is so ordered. 
_________________ 

_________________ 

Cite as: 602 U. S. ____ (2024) 1 

JACKSON, J., concurring 

SUPREME COURT OF THE UNITED STATES 

No. 22–800 

CHARLES G. MOORE, ET UX., PETITIONERS 

v. UNITED STATES 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT 

[June 20, 2024] 

JUSTICE JACKSON, concurring. 

Our Constitution grants Congress “plenary power” over

taxation. Brushaber v. Union Pacific R. Co., 240 U. S. 1, 13 

(1916). The text supplies only two relevant conditions: Direct taxes must be apportioned among the States based on 

population, see Art. I, §9; all other taxes must “be uniform 

throughout the United States,” §8. During the century after our Nation’s founding, the Court repeatedly recognized

that, in matters of tax policy, Congress’s view was controlling. See, e.g., Pacific Ins. Co. v. Soule, 7 Wall. 433, 443 

(1869) (“Where the power of taxation, exercised by Congress, is warranted by the Constitution . . . it is, necessarily,

unlimited in its nature”); Collector v. Hubbard, 12 Wall. 1, 

18 (1871) (upholding a tax on undistributed corporate earnings because “it is as competent for Congress to tax annual

gains and profits before they are divided among the holders 

of the stock as afterwards”). 

Then came Pollock v. Farmers’ Loan & Trust Co., 158 

U. S. 601 (1895). In that case, the Court invalidated a federal income tax, holding that a tax on income derived from

property was a direct tax requiring apportionment. See id., 

at 637. Pollock provoked immediate outcry. President Taft, 

later Chief Justice of this Court, said, “ ‘Nothing has ever 

injured the prestige of the Supreme Court more.’” B. Ackerman, Taxation and the Constitution, 99 Colum. L. Rev. 1, 5 
 

2 MOORE v. UNITED STATES 

JACKSON, J., concurring 

(1999). In 1913, the People’s representatives responded, using their power to overturn Pollock via constitutional 

amendment. The Sixteenth Amendment restored to Congress the power to tax “incomes, from whatever source derived, without apportionment.” 

Against that stark backdrop, the Court wisely takes a restrained approach today. Petitioners allege that the Mandatory Repatriation Tax (MRT) exceeded Congress’s power

by taxing shareholders on the undistributed income of a corporation; such a tax, petitioners argue, is really a direct tax

requiring apportionment. The majority opinion rightly rejects that challenge, thoroughly explaining why the MRT 

falls within Congress’s long-recognized, oft-exercised power 

to tax shareholders on the undistributed income of a business entity. See ante, at 22. I write separately to emphasize that, before taking up petitioners’ invitation to strike

down a lawfully enacted tax, the Court would need to be 

persuaded of several additional arguments that we wisely 

do not reach. I highlight two.

First, we would need to agree with petitioners that Congress can tax income only if it is actually received or “realized.” That alleged requirement appears nowhere in the 

text of the Sixteenth Amendment. See Brief for John R. 

Brooks et al. as Amici Curiae 14–21 (explaining that the

phrase “from whatever source derived” served only to overrule Pollock). Moreover, both before and after the Sixteenth 

Amendment was adopted, the term “income” was widely 

recognized as flexible enough to include both realized and 

unrealized gains. See Brief for United States 14–26 (collecting sources); Brief for Professors of Tax Law et al. as 

Amici Curiae 6–20 (same).

The alleged realization requirement is, instead, drawn 

from a decision of this Court, Eisner v. Macomber, 252 U. S. 

189 (1920). Macomber struck down a tax on stock dividends, ostensibly because the taxpayer “ha[d] not realized

or received any income in the transaction.” Id., at 212. Like 
 

 

 

Cite as: 602 U. S. ____ (2024) 3 

JACKSON, J., concurring 

Pollock, Macomber was “promptly and sharply criticised.” 

Helvering v. Griffiths, 318 U. S. 371, 373 (1943). Over the 

two decades that followed our pronouncement, we “limited” 

Macomber’s realization requirement “to the kind of dividend there dealt with,” 318 U. S., at 375, while also “undermin[ing] . . . the original theoretical bases of the decision in”

other contexts, id., at 394. 

Thus, there is no constitutional requirement, from Macomber or otherwise, that a taxpayer “be able to sever . . . 

the gain from his original capital” in order to be taxed on it. 

Helvering v. Bruun, 309 U. S. 461, 469 (1940); see also Cottage Savings Assn. v. Commissioner, 499 U. S. 554, 559 

(1991) (explaining that, properly understood, “the concept 

of realization is ‘founded on administrative convenience,’” 

compared to the “‘cumbersome’” process of “valuing assets

on an annual basis to determine . . . appreciat[ion]”). In the 

lower courts too, Macomber’s definition of income has long

been deemed outmoded, if not overruled.1 Any litigant

seeking to sustain her case on the basis of Macomber would 

have to bring back from the dead its Court-created limit on

Congress’s power.2 

—————— 1 See, e.g., Commissioner v. Obear-Nester Glass Co., 217 F. 2d 56, 60 

(CA7 1954) (“Even as to income derived from capital [Macomber] has 

been limited to its specific facts”); United States v. James, 333 F. 2d 748, 

752 (CA9 1964) (“[I]nsofar as [Macomber] purported to offer a comprehensive definition of the term income as used in the Sixteenth Amendment, it has been discarded”); Prescott v. Commissioner, 561 F. 2d 1287, 

1293 (CA8 1977) (“[T]he Supreme Court has found it necessary to abandon [Macomber’s] attempt at an all-inclusive definition of income”). 2 To be sure, Macomber is a hard decision to parse, and it might be

read to allow taxation of an asset only if the owner receives some new, 

increased value. See Eisner v. Macomber, 252 U. S. 189, 211 (1920) (emphasizing that a stock dividend does not necessarily “increase the intrinsic value of [the taxpayer’s] holding”); see also Koshland v. Helvering, 

298 U. S. 441, 445–446 (1936). If that reading is correct, Macomber 

would not preclude taxation of unrealized gains. See Brief for United 

States 33–34; Brief for Alex Zhang as Amicus Curiae 26. 
 

4 MOORE v. UNITED STATES 

JACKSON, J., concurring 

Second, even if we were to hold that a uniform tax violated the Sixteenth Amendment, we would still need to confirm that the tax was a direct tax before requiring apportionment. The Constitution does not exhaustively define

direct taxes, though it appears the category was originally

intended to encompass only land and head taxes. See, e.g., 

Hylton v. United States, 3 Dall. 171, 175 (1796) (opinion of 

Chase, J.); id., at 177 (opinion of Paterson, J.); id. at 183 

(opinion of Iredell, J.). But the Constitution does expressly 

exclude certain taxes—“Duties, Imposts and Excises”—

from apportionment, and we have long interpreted those

categories of taxes broadly. Art. I, §8; see also Steward Machine Co. v. Davis, 301 U. S. 548, 581–582 (1937). Indeed, 

we have upheld uniform taxes as excises, even when predicated on something that, if taxed on its own, might require 

apportionment or even be nontaxable. See Flint v. Stone 

Tracy Co., 220 U. S. 107, 150–152, 165 (1911). In this case, 

the Government argues that the MRT can be understood as

an excise tax on the privilege of doing business through a 

controlled foreign corporation. See Brief for United States 

46–49. That argument, too, would need to be considered 

before we could strike down a uniform tax like the MRT. 

* * * 

I have no doubt that future Congresses will pass, and future Presidents will sign, taxes that outrage one group or 

another—taxes that strike some as demanding too much, 

others as asking too little. There may even be impositions 

that, as a matter of policy, all can agree are wrongheaded. 

However, Pollock teaches us that this Court’s role in such 

disputes should be limited. “[T]he remedy for such abuses

is to be found at the ballot-box, and in a wholesome public 

opinion which the representatives of the people will not 

long, if at all, disregard, and not in the disregard by the judiciary of powers that have been committed to another 
Cite as: 602 U. S. ____ (2024) 5 

JACKSON, J., concurring 

branch of the government.” Pollock, 158 U. S., at 680 (Harlan, J., dissenting). 

With that understanding, I join the Court’s opinion in 

full. 
_________________ 

_________________ 

Cite as: 602 U. S. ____ (2024) 1 

BARRETT, J., concurring in judgment 

SUPREME COURT OF THE UNITED STATES 

No. 22–800 

CHARLES G. MOORE, ET UX., PETITIONERS 

v. UNITED STATES 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT 

[June 20, 2024] 

JUSTICE BARRETT, with whom JUSTICE ALITO joins, concurring in the judgment. 

This case comes down to two questions. Have the Moores 

realized income from their KisanKraft shares? And if they

have not, may Congress attribute KisanKraft’s income to 

the Moores? 

Our precedent already decides the first question: Shareholders receive income when they sell their shares or when 

a corporation distributes profits back to its investors by declaring a dividend. Notwithstanding this precedent, the 

Government asserts its power to tax without apportionment all economic gains, including appreciation in property

value. The Court does not address this issue. Ante, at 8. It 

focuses on the second instead, and, casting our precedent as 

well settled, holds that Congress can attribute KisanKraft’s 

income to the Moores. As I explain below, I think the issue 

is more complex than the Court lets on. But whatever my

disagreement with the Court’s reasoning, it bears emphasis 

that the Moores’ case involves the Mandatory Repatriation 

Tax (MRT), which is a specific tax imposed upon the American shareholders of a closely held foreign corporation. A 

different tax—for example, a tax on shareholders of a 

widely held or domestic corporation—would present a different case. 
 

2 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

I 

The question on which we granted review is “[w]hether

the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.” 

Pet. for Cert. i. The answer is straightforward: No. 

A 

The Constitution distinguishes between taxes on income 

and taxes on property. Income taxes must apply uniformly 

across the country, Art. I, §8, cl. 1, while “direct” taxes—

like property taxes—must be apportioned among the 

States, §2, cl. 3; §9, cl. 4.1 Apportionment is an onerous burden, both technically and politically, because it requires

Congress to allocate the total tax liability to each State according to its population. There have been very few federal 

property taxes in this nation’s history (and none in the modern era). By design and in fact, the apportionment rule has 

left property taxation primarily to the States. See post, at 

7–12 (THOMAS, J., dissenting).

In Pollock v. Farmers’ Loan & Trust Co., the Court held 

that the apportionment rule applies not only to taxes on 

real and personal property, but also to taxes on income “derived” from that property—say, rents from leasing farmland. 158 U. S. 601, 618 (1895). The decision left Congress

effectively unable to tax most nonlabor income. The Sixteenth Amendment overruled Pollock’s second holding,

stating that “Congress shall have power to lay and collect 

taxes on incomes, from whatever source derived, without 

apportionment.” But it did not overrule Pollock’s first holding that taxes on personal property are direct taxes. See 

Brushaber v. Union Pacific R. Co., 240 U. S. 1, 19 (1916); 

—————— 1Direct taxes also include a capitation tax, which imposes a tax on 

every person “without regard to property, profession, or any other circumstance.” National Federation of Independent Business v. Sebelius, 

567 U. S. 519, 571 (2012) (NFIB) (internal quotation marks omitted; emphasis deleted). 
 

Cite as: 602 U. S. ____ (2024) 3 

BARRETT, J., concurring in judgment 

National Federation of Independent Business v. Sebelius, 

567 U. S. 519, 571 (2012).

As the text of the Sixteenth Amendment indicates, income is financial gain that “derive[s]” from property or another source. See, e.g., United States v. Phellis, 257 U. S. 

156, 168–169 (1921); Stratton’s Independence, Ltd. v. Howbert, 231 U. S. 399, 415 (1913); Webster’s New International Dictionary 1089 (1909) (Webster’s) (“income” is

“[t]hat gain or recurrent benefit (usually measured in

money) which proceeds from labor, business, or property”).

To capture the distinction between property and income, we

have described property as the “seed” and income as the

“fruit that it will yield.” United States v. Safety Car Heating 

& Lighting Co., 297 U. S. 88, 99 (1936). Thus, a condominium is a landlord’s property, and rents are the income she 

receives from leasing it. A patent is an inventor’s property, 

and royalties are the income she receives from licensing it. 

A capital fund is a banker’s property, and interest is the 

income she receives from lending it. 

The Sixteenth Amendment’s reference to income “derived” from any source encompasses a requirement that income, to be taxed without apportionment, must be realized. 

See post, at 23–25 (THOMAS, J., dissenting). While the Government stresses that the Amendment did not include a “realization” requirement, Brief for United States 15–16, “realize” and “derive” have long referred to the same concept. 

Compare Webster’s 1778 (“realize” means to “convert an intangible right or property into real (tangible) property”; to

“convert any kind of property (considered as fluctuating or 

uncertain in value) into money”), with id., at 601 (“derivation” is the “[a]ct of receiving anything from a source, as

profits from capital”). The Court has used “realization” this 

way (including in today’s opinion) when discussing income

taxes on corporate shareholders. See, e.g., ante, at 8; Cullinan v. Walker, 262 U. S. 134, 138 (1923). And we have also 
 

4 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

used the term “realized” in cases involving a tax on accumulated corporate earnings, Ivan Allen Co. v. United 

States, 422 U. S. 617, 627–629 (1975), debt discharge, 

United States v. Kirby Lumber Co., 284 U. S. 1, 3 (1931), 

real estate improvements, Helvering v. Bruun, 309 U. S. 

461, 469 (1940), punitive damages, Commissioner v. Glenshaw Glass Co., 348 U. S. 426, 431 (1955), and meal allowances, Commissioner v. Kowalski, 434 U. S. 77, 83 (1977), 

to name a few. Many opinions use “derived” and “realized” 

more or less interchangeably. See, e.g., Diedrich v. Commissioner, 457 U. S. 191, 199 (1982); Commissioner v. Jacobson, 336 U. S. 28, 39 (1949); Helvering v. Horst, 311 U. S. 

112, 118 (1940); Goodrich v. Edwards, 255 U. S. 527, 535 

(1921); Gray v. Darlington, 15 Wall. 63, 65–66 (1872); Pollock, 158 U. S., at 696 (Jackson, J., dissenting).

The “commonly understood meaning of the term” income

when the Sixteenth Amendment was ratified requires that

a gain be “realized” or “derived”—e.g., through a sale or 

other transaction—to be taxed without apportionment. 

Merchants’ Loan & Trust Co. v. Smietanka, 255 U. S. 509, 

519–520 (1921); see post, at 23–25 (THOMAS, J., dissenting). 

“Income within the meaning of the Sixteenth Amendment 

. . . is income as the word is known in the common speech 

of men.” Safety Car, 297 U. S., at 99. And in the years surrounding the ratification of the Sixteenth Amendment, income “was used in ordinary parlance to refer only to realized gains.” Brief for Professors of Law and Linguistics as 

Amicus Curiae 17; see id., at 18–22 (instances of the word

“income” between 1900 and 1912 in the Corpus of Historical

American English referred to “economic gain tied to a realization event”).

Regardless of whether one uses the term “derived” or “realized,” the important point is this: The Sixteenth Amendment and the Direct Tax Clause distinguish between taxes

on property, which are subject to apportionment, and taxes 

on income derived or realized from that property, which are 
 

Cite as: 602 U. S. ____ (2024) 5 

BARRETT, J., concurring in judgment 

not. 

B 

The Moores have not realized income from their 

KisanKraft shares. Shares yield income when the corporation declares a dividend—i.e., when the corporation distributes its profits to shareholders. See Lynch v. Hornby, 247 

U. S. 339, 344 (1918) (“Dividends are the appropriate fruit 

of stock ownership [and] are commonly reckoned as income”); Gibbons v. Mahon, 136 U. S. 549, 557–558 (1890).

But KisanKraft has never declared a dividend. Nor have 

the Moores realized income by selling or otherwise disposing of their shares. See Taft v. Bowers, 278 U. S. 470, 481– 

482 (1929). Because they have not received a dividend, 

profit from selling their shares, or any other pecuniary benefit from their stock ownership, the Moores have not yet received a return on their original investment in the company. In short, they have not “derived” income from their

shares because nothing has come in. 

The Government resists this conclusion. It concedes, as 

it must, that a tax on the “total value of ” the shares “at a 

particular point [in] time” is a “quintessential tax on property” that must be apportioned. Tr. of Oral Arg. 127–128; 

see NFIB, 567 U. S., at 571; Brushaber, 240 U. S., at 19. 

But looking at property value across two points in time

makes a difference, the Government says, because then the 

tax targets appreciation rather than the asset’s value. As 

the Government sees it, Congress may tax without apportionment “all economic gains” measured “‘between two 

points in time.’” Brief for United States 9, 15. And the increase in value between Time A and Time B is “income.” 

The Government is unable to cite a single decision upholding an unapportioned tax on appreciation. Tr. of Oral 

Arg. 89, 91–92. That is no surprise, because our precedent 

forecloses the Government’s argument. We have explained 

that income includes neither “a gain accruing to capital” nor 
 

 

6 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

“a growth or increment of value in the investment.” Phellis, 

257 U. S., at 169; see also Safety Car, 297 U. S., at 99 (income is the “fruit that is born of capital, not the potency of 

fruition”). And we have stressed that “economic gain is not 

always taxable as income.” Bruun, 309 U. S., at 469 (emphasis added); see also Commissioner v. Indianapolis 

Power & Light Co., 493 U. S. 203, 214 (1990) (“[A] taxpayer

does not realize taxable income from every event that improves his economic condition”). Although appreciation 

looks valuable on paper, “the stockholder has received nothing out of the company’s assets for his separate use and benefit,” and market fluctuations could “wip[e] out the entire 

investment” before the owner ever receives a dime of “income within the meaning of the Sixteenth Amendment.” 

Eisner v. Macomber, 252 U. S. 189, 211 (1920). 

If the Government were right that appreciation is income, 

it is hard to make sense of our decision in Ivan Allen Co. 

There, we considered a tax on accumulated earnings—i.e., 

income that the corporation retains as assets on its balance 

sheet instead of distributing to its shareholders. 422 U. S., 

at 624–625. Because corporate tax rates were generally 

lower than individuals’ marginal tax rates, Congress was 

concerned that corporations would be used to reduce their

“shareholders’ overall tax liability by accumulating earnings beyond the reasonable needs of the business.” Id., at 

624. So Congress imposed a tax on earnings that corporations allowed to accumulate “beyond the reasonable and 

reasonably anticipated needs of the business.” Id., at 621, 

624. In upholding the tax, we took great care to explain

that the tax “is not directed at the unrealized appreciation 

of liquid assets”; “any unrealized appreciation in the value 

of the taxpayer’s portfolio . . . does not enter into the computation” of the tax. Id., at 627–628. The tax took into account the value and appreciation of the corporation’s assets 

“only in measuring reasonableness of accumulation of the 

earnings and profits that otherwise independently exist.” 
 

 

 

Cite as: 602 U. S. ____ (2024) 7 

BARRETT, J., concurring in judgment 

Id., at 628. In other words, asset appreciation was only relevant with respect to how much of the corporation’s income 

could be taxed under the statute. More assets meant less 

income reasonably could be accumulated. If asset appreciation itself were just as taxable as income, there would have

been no reason for the Court’s painstaking efforts to explain

the scope of the tax. See id., at 627–629.2 

C 

In upholding the tax, the Ninth Circuit opined that

“[w]hether the taxpayer has realized income does not determine whether a tax is constitutional.” 36 F. 4th 930, 935 

(2022). In its view, the “Supreme Court has made clear that

realization of income is not a constitutional requirement.” 

Id., at 936. The Ninth Circuit misread our cases. Contrary 

to its assertion, this Court has “never abandoned the core 

requirement that income must be realized to be taxable 

without apportionment.” 53 F. 4th 507, 508 (CA9 2022) 

(Bumatay, J., dissenting from denial of rehearing en banc).

What we have done is reject efforts to narrow what it means 

to realize income. 

For example, in Helvering v. Bruun—one of the cases on 

which the Ninth Circuit relied—we clarified that “the realization of gain need not be in cash derived from the sale of

an asset” but can also “result [from] exchange of property,

payment of the taxpayer’s indebtedness, relief from a liability, or other profit realized from the completion of a transaction.” 309 U. S., at 469. In that case, a tenant built a 

valuable building on the landlord’s property. Upon termination of the lease, the landlord regained possession of the 

—————— 2Although Ivan Allen Co. involved the interpretation of a tax statute, 

our analysis sheds light on the Constitution’s definition of income because we have long interpreted “gross income” in the Internal Revenue 

Code to reach “ ‘the full measure of [Congress’s] taxing power.’ ” Commissioner v. Kowalski, 434 U. S. 77, 82 (1977) (quoting Helvering v. 

Clifford, 309 U. S. 331, 334 (1940)). 
 

 

8 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

property—and acquired the building too. When the Internal Revenue Service came calling, the landlord protested

that he had realized no taxable gain from the building in 

the year that the lease ended. We sided with the IRS. Gain 

from a contributed building is not like an “accrua[l] of value 

due to extraneous and adventitious circumstances”—for example, appreciation from a booming real estate market. 

Id., at 467. Nor does realization require the ability to “sever

the improvement begetting the gain from [the] original capital.” Id., at 469. “If that were necessary,” we said, “no income could arise from the exchange of property; whereas 

such gain has always been recognized as taxable gain.” 

Ibid. None of that remotely suggests, however, that realization is not required or (relatedly) that appreciation counts

as taxable income. Instead, it explains that profit (there,

the building) is realized when received, even if it cannot be 

physically separated from the capital (there, the land). 

In dispensing with the realization requirement, the 

Ninth Circuit also cited Helvering v. Horst. But Horst, like 

Bruun, emphasizes that realization does not require cash

in hand—not that realization is irrelevant. In Horst, “the 

owner of negotiable bonds . . . detached from them negotiable interest coupons shortly before their due date and delivered them as a gift to his son who in the same year collected 

them at maturity.” 311 U. S., at 114. The bond owner insisted that the interest coupons were not income taxable to 

him, because his son owned them at the time they came 

due. See id., at 114–115. We rejected the argument that

the bond owner could “escape all tax by giving away his

right to income in advance of payment.” Id., at 116. “The 

power to dispose of income is the equivalent of ownership of

it.” Id., at 118. And while the donor chose not to take the 

interest itself, he still “realized the fruits of his investment.” 

Id., at 117 (emphasis added). Realization does not depend 

on how the user chooses to enjoy the income—whether 

through “the purchase of goods at the corner grocery, the 
Cite as: 602 U. S. ____ (2024) 9 

BARRETT, J., concurring in judgment 

payment of his debt there, or such non-material satisfactions as may result from . . . a gift to his favorite son.” Ibid. 

Far from disavowing the realization requirement, the Court 

emphasized that a taxpayer cannot escape realization (and 

therefore tax liability) by giving away the fruit of his capital. 

In sum, realization may take many forms, but our precedent uniformly holds that it is required before the Government may tax financial gain without apportionment. Realization is a question of substance, not form. Diedrich, 457 

U. S., at 195. In general, realization is “the last step . . . by

which [one] obtains the fruition of the economic gain which 

has already accrued to him.” Horst, 311 U. S., at 115. Our 

cases describe many ways income might be realized; a rigid

definition does not capture them all. See, e.g., MacLaughlin 

v. Alliance Ins. Co., 286 U. S. 244, 249 (1932) (“sale or other 

disposition of property”); Safety Car, 297 U. S., at 93 (“profits owing to a patentee by the infringer of a patent”); Kirby 

Lumber, 284 U. S., at 2–3 (“clear gain” resulting from corporation repurchasing bonds it issued for less than the corporation had initially “received [for] their par value”). The 

common thread is that to realize income, one must receive 

something new and valuable beyond the property she already owns. 

II 

Though the Moores did not realize income as shareholders, KisanKraft realized income as a corporation—profits

from supplying farm equipment to customers in India. The 

Government argues that, because the MRT targets

KisanKraft’s realized income, it falls within the Sixteenth 

Amendment and is not subject to the apportionment rule.

Brief for United States 42. But the question is not whether 

some taxable person or entity has realized income at some 

point. Rather, as the Court emphasizes, we must determine 
 

 

10 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

whether Congress has the power to tax the Moores on income that KisanKraft realized. Ante, at 8. Put differently,

can Congress disregard KisanKraft’s corporate form, attribute KisanKraft’s income to its shareholders, and tax its 

shareholders on that income? 

The Court concludes that it can, describing our case law 

as “clear and definitive” in the Government’s favor. Ante, 

at 13. I read our cases differently. As I understand our 

precedent, it leaves room for Congress to disregard the corporate form in some circumstances. But that is not because 

Congress—as the Court suggests—can treat corporations

interchangeably with partnerships, whose partners have

always been subject to pass-through taxation on the partnership’s income. See United States v. Basye, 410 U. S. 441, 

453–454 (1973). Rather, our cases allow Congress to disregard the corporate form to determine whether the shareholder received income in substance, if not in form. 

A 

Our precedent suggests that Congress’s power to attribute a corporation’s income to its shareholders for tax purposes is limited. Eisner v. Macomber is the most recent case 

addressing this issue—and it was decided more than a century ago. There, the Standard Oil Company of California

chose to reinvest its profits back into the corporation rather

than distributing them to shareholders. 252 U. S., at 200. 

Those retained earnings caused an imbalance in the corporation’s capital account. So to adjust its books, Standard

Oil declared a stock dividend that issued new shares to existing shareholders while diluting the value of their previous shares—which left the shareholders in the same financial position as before the transaction. See id., at 200–201, 

212. The Court held that shareholder Myrtle Macomber did 

not realize income from the stock dividend because she “received nothing out of the company’s assets for [her] sepa-
 

Cite as: 602 U. S. ____ (2024) 11 

BARRETT, J., concurring in judgment 

rate use and benefit.” Id., at 211. The shareholder’s original investment “still remains the property of the company, 

and subject to business risks which may result in wiping 

out the entire investment.” Ibid. The stock dividends were 

“evidenc[e]” that her capital previously had appreciated, 

but the dividends themselves “added nothing to” her property and were therefore not income derived from it. Id., at 

212 (while the “shareholder is the richer because of an increase of his capital . . . he has not realized or received any

income in the transaction”).3 

Importantly for our purposes, the Court also rejected the

Government’s theory that Congress could attribute the corporation’s income to its shareholders. See id., at 213. The 

Court expressed “no doubt of the power or duty of a court to

look through the form of the corporation and determine the 

question of the stockholder’s right, in order to ascertain 

whether he has received income taxable by Congress without apportionment.” Ibid. (emphasis added). But the Court 

would not “disregard the essential truth disclosed”: It would 

not “ignore the substantial difference between corporation

and stockholder” and “treat the entire organization as unreal; look upon stockholders as partners, when they are not 

such . . . and indulge the fiction that they have received and

realized a share of the profits of the company which in truth 

they have neither received nor realized.” Id., at 214. The 

Court therefore refused to uphold the tax as a tax on attributed corporate income. 

That left one potential justification for the tax—that the

Direct Tax Clause’s apportionment requirement did not apply to taxes on the stockholder’s undivided interest in the

corporation. The Court rejected that argument too, adhering to Pollock’s holding that a tax on a shareholder’s ownership interest is a tax on property. The Court explained 

—————— 3The Court today does not cast doubt on Macomber’s holding that appreciation is not income. See ante, at 23. 
 

12 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

that Pollock “overruled” the holding of Collector v. Hubbard, 12 Wall. 1 (1871), that Congress could “tax without 

apportionment a stockholder’s interest in accumulated 

earnings prior to dividend declared,” Macomber, 252 U. S., 

at 218. The Court acknowledged that the Sixteenth

Amendment had overruled Pollock’s holding that a tax on 

income derived from property must be apportioned. 252 

U. S., at 219. But it stressed that the Sixteenth Amendment did not otherwise disturb the law concerning the Direct Tax Clause—including Pollock’s holding that the 

Clause applies to “property, real and personal.” Id., at 206; 

see id., at 219 (“[T]he Amendment applies to income only”). 

Because a stockholder’s ownership interest in the corporation is personal property—“capital, not income”—Congress 

must apportion any tax on it. Ibid. 

Today, the Court does not dispute either that income requires realization or that a tax on stock ownership must be 

apportioned. Instead, it says that the income of a closely 

held foreign corporation can be attributed to its shareholders for tax purposes. That might be right, but the Court’s

reasons for saying so are wrong: It dismisses the “attribution” portion of Macomber as dicta and argues that four subsequent cases undercut it. Ante, at 13. I disagree. None of 

these cases contradicts Macomber’s admonition that Congress cannot “look upon stockholders as partners . . . when 

they are not”; Congress may not “indulge the fiction that

they have received and realized a share of the profits of the 

company” when they have not. 252 U. S., at 214; see also 

Helvering v. Griffiths, 318 U. S. 371, 376–377, and n. 11 

(1943). Rather, the Court’s cases all illustrate the principle 

that the validity of an income tax must be assessed “according to truth and substance, [not] form.” Macomber, 252 

U. S., at 206. 

Burk-Waggoner Oil Assn. v. Hopkins upheld Congress’s

power to tax an “unincorporated joint stock association” as 
Cite as: 602 U. S. ____ (2024) 13 

BARRETT, J., concurring in judgment 

a corporation even though state law treated it as a partnership. 269 U. S. 110, 110–111 (1925). We disregarded the

state-law label because the associations acted as corporations: They had “a fixed capital stock divided into shares,”

they “manage[d] their affairs by a board of directors and

executive officers,” and they “conduct[ed] their business in 

the general form and mode of procedure of a corporation.” 

Id., at 113–114. “[N]othing in the Constitution,” we explained, “precludes Congress from taxing as a corporation

an association which, although unincorporated, transacts

its business as if it were.” Id., at 114. Burk-Waggoner thus 

held that for tax purposes, Congress could treat a partnership like a corporation when it acts like a corporation. We 

did not decide whether Congress may treat a corporation 

like a partnership—e.g., attributing its income to shareholders—when, in truth and substance, it operates as a corporation.

Next up is Burnet v. Leininger, 285 U. S. 136 (1932). Although that case involved a partnership, the issue was about 

the “anticipatory assignment of income doctrine.” See Commissioner v. Banks, 543 U. S. 426, 433–434 (2005) (“A taxpayer cannot exclude an economic gain from gross income

by assigning the gain in advance to another party” (citing, 

inter alia, Lucas v. Earl, 281 U. S. 111, 114–115 (1930)); 1

B. Bittker, J. Eustice, G. Goldstein, & T. Brantley, Federal 

Income Taxation of Corporations and Shareholders 

¶2.07[3] (2024). The taxpayer, who happened to be one-half 

partner in a laundry business, tried to reduce his tax liability by assigning a portion of his income to his wife. 285 

U. S., at 141. We rejected that artifice and affirmed Congress’s ability to “ta[x] the salary and fees of the person who

earned them.” Id., at 141–142 (citing Lucas, 281 U. S., at 

114). This case, too, is about classifying taxes according to 

substance rather than form. 

The Court also invokes Heiner v. Mellon, which blesses 

Congress’s power to tax “partners” on their “proportionate 
 

 

14 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

share of the net income of the partnership” even where the 

partnership’s income is not “currently distributable” to the 

partners under state law. 304 U. S. 271, 280–281 (1938).

The case rests on the “axiomatic” and “firmly established”

rule of partnership taxation that “each partner must pay

taxes on his distributive [i.e., proportional] share of the 

partnership’s income without regard to whether that

amount is actually distributed to him.” Basye, 410 U. S., at 

453–454 (discussing Heiner). Given the unique partnership 

context, Heiner sheds no light on Congress’s power to tax 

shareholders on a corporation’s income.4

 Finally, in Helvering v. National Grocery Co., 304 U. S. 

282 (1938), the Court sustained a deficiency tax imposed on

a corporation that was used to shelter the income of its sole

shareholder. (Notably, the corporation, not the shareholder, was the taxpayer.) In the course of rejecting the

corporation’s various challenges to the tax, the Court 

opined that “Kohl, the sole owner of the business, could not 

by conducting it as a corporation, prevent Congress, if it 

chose to do so, from laying on him individually the tax on 

the year’s profits.” Id., at 288. That dictum, if correct, is 

consistent with Macomber’s recognition that courts can look 

through the corporate form to determine the substance of 

the shareholder’s relationship to the income. Because National Grocery’s income was really just the income of Kohl, 

its sole owner, the Court suggested that attributing it to 

him for tax purposes would be permissible. 

—————— 4Partnerships are distinct from corporations in many other fundamental ways. For example, partnerships traditionally do not have a legal 

identity distinct from the partners and do not enjoy the limited liability

characteristic of the corporate form. They are instead “an aggregation of 

individuals operating the business as co-owners with individual rights 

and duties.” 1 J. Cox & T. Hazen, Law of Corporations §1.07 (3d ed.

2010). For purposes of federal diversity jurisdiction, partnerships are 

citizens wherever their partners are, whereas corporations have citizenship distinct from their shareholders. See Carden v. Arkoma Associates, 

494 U. S. 185, 187–189 (1990). 
 

Cite as: 602 U. S. ____ (2024) 15 

BARRETT, J., concurring in judgment 

Thus, in matters of corporate form and income attribution—as in the definition of income—labels do not control. 

But acknowledging that substance controls is a far cry from

asserting that Congress is free to wholly disregard the corporate form. That would permit Congress to tax the shareholder without regard to the substance of her relationship 

to the corporation and would contradict Macomber’s holding that Standard Oil’s income could not be attributed to its 

shareholders. See 252 U. S., at 213–214. Our precedent 

does not give Congress carte blanche to attribute corporate

income to a shareholder. Instead, it suggests that Congress 

has a limited power to do so that depends on the relationship between the shareholder and the income.5 

B 

Although I believe that the Court today is too quick to

bless the attribution of corporate income to shareholders,

its holding is narrow. The Court affirms Congress’s power

to tax shareholders on “the undistributed income of American-controlled foreign corporations,” but it says that the 

—————— 5The Court asserts that Congress no longer observes Macomber’s distinction between shareholders and the corporate entity for tax purposes. 

Ante, at 11. That paints an incomplete picture. After Macomber, Congress ended its longstanding practice of attributing corporate income to

shareholders when the corporation operated as a tax shelter. See Ivan 

Allen Co., 422 U. S., at 624–626, and n. 8; Griffiths, 318 U. S., at 377 

n. 12, 385. That practice reemerged in the 1930s when Congress began 

taxing shareholders of closely held foreign corporations on undistributed 

corporate earnings. Revenue Act of 1937, §201, 50 Stat. 822. To my 

knowledge, Congress has not returned to that approach for domestic or

widely held corporations of the kind Macomber considered. And while 

Congress continues to attribute income of certain closely held foreign corporations to their U. S. shareholders today, see 26 U. S. C. §951 et seq. 

(“subpart F”), doing so might be consistent with Macomber’s recognition

that Congress can disregard the corporate form when, in substance, it is 

reasonable to treat the income of the corporation as that of the shareholders. The Court’s “arbitrariness” test seems to get at a similar point,

but, by dismissing the relevance of the corporate form altogether, it confuses the analysis. 
 

 

 

16 MOORE v. UNITED STATES 

BARRETT, J., concurring in judgment 

Due Process Clause cabins that power by requiring income

attributions not to be “arbitrary.” Ante, at 22–23. The arbitrariness inquiry, the Court previews, turns on “the taxpayer’s relationship to the underlying income.” Ante, at 14, 

n. 4 (citing Burnet v. Wells, 289 U. S. 670, 678–679 (1933)). 

I agree that the Constitution prohibits Congress from arbitrarily attributing to the taxpayer someone else’s income. 

Our cases have located that limit in the Due Process 

Clause. See Burnet, 289 U. S., at 678–679; Hoeper v. Tax 

Comm’n of Wis., 284 U. S. 206, 215 (1931) (“That which is

not in fact the taxpayer’s income cannot be made such by

calling it income”). But an arbitrariness limit is implicit in

the Sixteenth Amendment too. Virtually all property was 

income at some point. Ford Motor Company uses its income 

to buy steel for making trucks. But surely Congress cannot 

attribute Ford’s earnings to anyone who owns an F–250.

The Amendment’s reference to “derived” income presupposes that the income belongs to the taxpayer, or is at least 

fairly attributable to her. Otherwise the taxpayer’s property (e.g., the truck she drives) could be taxed without apportionment just because it was once somebody else’s income (e.g., the earnings Ford used to purchase the steel).

While an arbitrariness limit on income attribution surely

exists, its contours are uncertain. We have never before applied the arbitrariness test to a tax law that attributes a 

corporation’s income to its shareholders. At oral argument,

the Government identified a series of factors that the Court 

has considered in attribution cases involving license agreements and trusts. See Tr. of Oral Arg. 119–123. One is 

whether the taxpayer has “sufficient power and control over 

. . . the income” that it is “reasonable to treat him as the 

recipient of the income for tax purposes.” Commissioner v. 

Sunnen, 333 U. S. 591, 604 (1948). Another is whether the 

taxpayer receives a special “privilege or benefit” from the 

entity that earns the income. Burnet, 289 U. S., at 679. A 

third is whether the corporation is foreign and thus outside 
Cite as: 602 U. S. ____ (2024) 17 

BARRETT, J., concurring in judgment 

the reach of an accumulated earnings tax. Cf. Ivan Allen 

Co., 422 U. S., at 624. These factors may serve as a useful 

guide for lower courts when applying today’s decision to 

taxes that attribute income from other types of corporations 

to an individual taxpayer. Just because Congress can attribute income of a closely held foreign corporation like 

KisanKraft to its shareholders does not mean it has equal 

power to attribute the income of a publicly traded domestic 

corporation to anyone holding a few shares in her retirement account. 

C 

Congress’s power to attribute the income of closely held 

corporations to their shareholders is a difficult question—

and unfortunately, the parties barely addressed it. Without 

focused briefing on the attribution question, I would not resolve it. Subpart F and the MRT may or may not be constitutional, nonarbitrary attributions of closely held foreign

corporations’ income to their shareholders. In this litigation, however, the Moores have conceded that subpart F is

constitutional. Tr. of Oral Arg. 9. And I agree with the

Court that subpart F is not meaningfully different from the

MRT in how it attributes corporate income to shareholders. 

Ante, at 20–21. Taxpayers generally bear the burden to 

show they are entitled to a refund. United States v. Janis, 

428 U. S. 433, 440 (1976); see also Haaland v. Brackeen, 599 

U. S. 255, 277–278 (2023) (burden to show unconstitutionality). Given the Moores’ concession, they have not met that

burden here. For that reason, I concur in the Court’s judgment affirming the judgment below. 
 

_________________ 

_________________ 

Cite as: 602 U. S. ____ (2024) 1 

THOMAS, J., dissenting 

SUPREME COURT OF THE UNITED STATES 

No. 22–800 

CHARLES G. MOORE, ET UX., PETITIONERS 

v. UNITED STATES 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT 

[June 20, 2024] 

JUSTICE THOMAS, with whom JUSTICE GORSUCH joins,

dissenting. 

Charles and Kathleen Moore paid $14,729 in taxes on an 

investment that never yielded them a penny. They challenge that tax—the Mandatory Repatriation Tax (MRT)—

as unconstitutional. As relevant, they argue that a tax on

unrealized investment gains is not a tax on “incomes” 

within the meaning of the Sixteenth Amendment, and it 

therefore cannot be imposed “without apportionment 

among the several States.”

The Moores are correct. Sixteenth Amendment “incomes” 

include only income realized by the taxpayer. The text and 

history of the Amendment make clear that it requires a distinction between “income” and the “source” from which that 

income is “derived.” And, the only way to draw such a distinction is with a realization requirement. Our precedent 

says as much. In Eisner v. Macomber, 252 U. S. 189 (1920),

the Court explained that “the characteristic and distinguishing attribute of income,” as the term is used in the 

Sixteenth Amendment, is that it is “received or drawn by 

the recipient (the taxpayer) for his separate use, benefit and 

disposal.” Id., at 207. Because the Moores never actually 

received any of their investment gains, those unrealized

gains could not be taxed as “income” under the Sixteenth 

Amendment. 
 

2 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

The Ninth Circuit wrongly rejected the Moores’ challenge

on the ground that “realization of income is not a constitutional requirement.” 36 F. 4th 930, 936 (2022). That conclusion cannot be reconciled with the Sixteenth Amendment as the Court correctly interpreted it in Macomber. We 

therefore granted certiorari to answer the question 

“[w]hether the Sixteenth Amendment authorizes Congress

to tax unrealized sums without apportionment among the 

states,” i.e., as “incomes.” Pet. for Cert. i. 

Today, the Court upholds the MRT only by ignoring the

question presented. It does “not address the Government’s 

argument that a gain need not be realized to constitute income under the Constitution.” Ante, at 12–13, n. 3. Instead, the Court answers the question “whether Congress 

may attribute an entity’s realized and undistributed income 

to the entity’s shareholders or partners, and then tax the 

shareholders or partners on their portions of that income.” 

Ante, at 8. After changing the subject, the majority upholds

the MRT by relying on unrelated precedent to derive a 

“clear rule” that “Congress can attribute the undistributed

income of an entity to the entity’s shareholders or partners.” Ante, at 10–11. 

I respectfully dissent. The Ninth Circuit erred by concluding that realization is not a constitutional requirement

for income taxes. And, the majority’s “attribution” doctrine

is an unsupported invention. 

I 

The Sixteenth Amendment provides: “The Congress shall

have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” The central dispute in this case—at least, in the case

briefed by the parties—concerns the meaning of the word

“incomes” in the Amendment. The Moores define “income” 

as “‘a gain, a profit, [or] something of exchangeable value’ 
 

Cite as: 602 U. S. ____ (2024) 3 

THOMAS, J., dissenting 

[that] is ‘received or drawn by the recipient (the taxpayer) 

for his separate use, benefit and disposal.’” Brief for Petitioners 1 (quoting Macomber, 252 U. S., at 207). This 

idea—that “income” is only something actually available for 

the taxpayer’s use—is known as “realization.” The Government rejects the realization requirement, arguing instead

that “income” captures “all economic gains” whether or not 

they are actually realized. Brief for United States 14 (internal quotation marks omitted).

“Income” in the Sixteenth Amendment refers only to income realized by the taxpayer. The Amendment resolved a 

long-running conflict over the scope of the Federal Government’s taxing power. It paved the way for a federal income 

tax by creating a new constitutional distinction between

“income” and the “source” from which that income is “derived.” Drawing that distinction necessitates a realization

requirement. 

A 

To understand the text of the Sixteenth Amendment— 

and, in particular, the meaning of the word “income”—one

must first understand how the Amendment came about. 

The Constitution’s original taxing provisions divided taxes

into two classes: direct and indirect taxes. And, as part of

a delicate constitutional compromise, the original taxing

provisions required direct taxes to be apportioned among 

the States based on population. Disputes about the scope

of the direct-tax category came to a head in Pollock v. Farmers’ Loan & Trust Co., 158 U. S. 601 (1895), when this Court 

held that many income taxes were direct taxes subject to 

the apportionment requirement. In reaching this conclusion, the Court held that income could not be distinguished

from its source for purposes of classifying an income tax as 

direct or indirect. The Sixteenth Amendment was ratified 

to overrule that holding from Pollock, and it can therefore 
 

 

4 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

be understood only in the context of Pollock and the preceding history. 

1 

The Sixteenth Amendment modified the Constitution’s 

original regulations of Congress’s taxing power. The text of 

those provisions is therefore the natural starting point for 

interpreting the Sixteenth Amendment. The Taxing Clause 

provides Congress with broad authority to impose taxes.

Other Clauses, including the Direct Tax Clause, classify different kinds of taxes and set corresponding limitations on 

Congress’s power to impose them. The Sixteenth Amendment alters those rules by making clear that taxes on income are not subject to the limitations imposed on direct 

taxes. 

The Constitution gives Congress the power to impose 

“Taxes” of any kind, including income taxes. The Taxing

Clause provides that “Congress shall have Power To lay and

collect Taxes, Duties, Imposts and Excises, to pay the Debts 

and provide for the common Defence and general Welfare 

of the United States; but all Duties, Imposts and Excises 

shall be uniform throughout the United States.” Art. I, §8, 

cl. 1. This Clause is the sole source of Congress’s authority 

to impose taxes. And, that authority is broad. Nothing in

the Constitution limits the kinds of taxes that Congress

may impose. As the Court has explained, “the authority 

conferred upon Congress by” the Taxing Clause “is exhaustive and embraces every conceivable power of taxation.” 

Brushaber v. Union Pacific R. Co., 240 U. S. 1, 12 (1916).

But, the Constitution restricts the manner in which Congress may impose taxes. It accomplishes this by dividing 

taxes into two classes—direct and indirect taxes—and imposing a distinct limitation applicable to each of those classes.1 

—————— 1The General Welfare Clause—quoted alongside the rest of the Taxing 
Cite as: 602 U. S. ____ (2024) 5 

THOMAS, J., dissenting 

Start with the class of direct taxes. The Direct Tax 

Clause provides: “No Capitation, or other direct, Tax shall

be laid, unless in Proportion to the Census or Enumeration 

herein before directed to be taken.” Art. I, §9, cl. 4. The 

Constitution does not expressly identify any tax as direct

other than a “Capitation.” A “capitation”—also called a

“poll tax”—is “[a] fixed tax levied on each person within a

jurisdiction.” Black’s Law Dictionary 1760 (11th ed. 2019) 

(defining “tax”). At the founding, the class of direct taxes 

was also understood to include taxes on real property, and

perhaps taxes on personal property. See infra, at 14–15. 

Indirect taxes, on the other hand, include “Duties, Imposts and Excises.” Art. I, §8, cl. 1. These were taxes that 

people could avoid by adjusting their behavior—generally,

taxes on articles of consumption. See The Federalist 

No. 21, p. 116 (E. Scott ed. 1898) (A. Hamilton). “Indirect 

taxes” are not identified by that name in the Constitution. 

But, the Constitution’s delineation of a direct-tax category

signals the existence of a complementary indirect-tax category.

For each class of taxes, the Constitution limits Congress’s

power with a distinct rule. Direct taxes are subject to the 

rule of apportionment. The Constitution twice specifies 

that “direct Taxes shall be apportioned among the several 

States . . . according to their respective Numbers.”2 Art. I, 

§2, cl. 3; see also §9, cl. 4. A tax is apportioned among the

States if “each State pays in proportion to its population.” 

National Federation of Independent Business v. Sebelius, 

—————— 

Clause above—is also an important “qualification on the substantive taxing power.” Health and Hospital Corporation of Marion Cty. v. Talevski, 

599 U. S. 166, 206 (2023) (THOMAS, J., dissenting). But, because this case 

does not implicate that limitation, I do not further explore the General 

Welfare Clause. 2Those “Numbers,” were originally “determined by adding to the whole

Number of free Persons . . . three fifths of all other Persons.” Art. I, §2,

cl. 3; but see Amdt. 14, §2. 
 

 

6 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

567 U. S. 519, 570 (2012). An example best demonstrates

what apportionment requires. Suppose that Congress imposed a direct tax on houses, and apportioned the tax such 

that two States of equal population were both responsible

for paying $100 in taxes. If the first State contained 100 

houses and the second State only 10, houses in the first 

State would be taxed at $1 each ($100 divided by 100

houses), whereas houses in the second State would be taxed 

at $10 each ($100 divided by 10 houses).

Indirect taxes are subject to the rule of uniformity: “[A]ll

Duties, Imposts and Excises shall be uniform throughout 

the United States.” Art. I, §8, cl. 1. The Court has explained that “the words ‘uniform throughout the United 

States’ . . . signify . . . a geographical uniformity.” Knowlton 

v. Moore, 178 U. S. 41, 106 (1900). In other words, a “tax is 

uniform when it operates with the same force and effect in

every place where the subject of it is found.” Head Money 

Cases, 112 U. S. 580, 594 (1884). So, a duty on the importation of tea must impose the same rate on imports coming

through Boston as those coming through Savannah.3 

The Sixteenth Amendment, on its face, narrows the scope

of the apportionment requirement. While direct taxes must 

be apportioned, the Sixteenth Amendment allows Congress 

—————— 3For the sake of completeness, three remaining taxing provisions in

the Constitution of 1789 bear mentioning. First, “a Tax or duty may be 

imposed” on the “Importation of such Persons as any of the States now 

existing shall think proper to admit”—i.e., upon the foreign slave trade—

“not exceeding ten dollars for each Person.” Art. I, §9, cl. 1. Second, “[n]o 

Tax or Duty shall be laid on Articles exported from any State.” Cl. 5. 

And third, “[n]o State shall, without the Consent of the Congress, lay any 

Imposts or Duties on Imports or Exports” (with limited exceptions). §10,

cl. 2. Together, these provisions define the limits of state and federal

taxing power with respect to foreign and interstate commerce. I mention 

them below only in passing. But, like the division between direct and 

indirect taxes, these provisions reflect the delicate balance that the Constitution struck regarding the scope of the federal taxing power. 
 

Cite as: 602 U. S. ____ (2024) 7 

THOMAS, J., dissenting 

to tax incomes “without apportionment.” But, it did not remove the Direct Tax Clause or the apportionment requirement from the Constitution entirely. To appreciate the extent of the change, and its implications for the meaning of

the word “incomes,” it is necessary to examine the origins 

of the Direct Tax Clause and how disputes about the

Clause’s scope led to the Sixteenth Amendment. 

2 

The Direct Tax Clause was a critical aspect of the balance 

between state and federal power in the original design of

the Constitution. It is easy today to take the federal taxing

power for granted. But, at the founding, allowing the National Government to exercise such a power was a radical 

proposal. The importance of the limitations imposed by the

Direct Tax Clause to the compromise struck by the Constitution has significant implications for the meaning of “incomes” in the Sixteenth Amendment. 

The American colonial experience inspired widespread 

distrust of taxation. See, e.g., Declaration of Independence 

¶19. The Articles of Confederation reflected that distrust. 

Under the Articles, the entire taxing power was exclusive

to the States. The National Government had no power to

impose taxes of any kind. The only revenue for the National

Government was funds “supplied by the several States” 

pursuant to requisitions “in proportion to the value of all

land within each State.” Articles of Confederation, Art. 8. 

And, the taxes for paying those requisitions were imposed 

solely by the States themselves.

The requisition system showed immediate signs of inadequacy. Raising funds through requisitions was often ineffective because States felt little urgency to pay their obligations. See Federalist No. 30, at 160 (A. Hamilton) 

(explaining that requisitions were formally “obligatory

upon the States,” but that “in practice” the right to disregard them was “constantly exercised”). And, the financial 
 

 

8 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

strain placed on the National Government by the Revolutionary War made that inefficiency an existential threat to 

the fledgling Nation.

The Continental Congress quickly concluded that financing the war effort would require another source of revenue

for the National Government. “[T]o establish the national

credit,” the Congress’s finance Committee reported in December 1780, “it will be necessary” for the States to “vest[t] 

in Congress” “[t]he exclusive right to duties arising on certain imported articles.” 18 Journals of the Continental Congress 1774–1789, p. 1157 (G. Hunt ed. 1910). The Congress 

therefore proposed the Impost of 1781, “recommend[ing] to

the several states, as indispensably necessary, that they . . . 

vest a power in Congress, to levy for the use of the United

States, a duty of five per cent.” on most imports. 19 Journals of the Continental Congress 112 (1912) (footnote omitted). The President of the Continental Congress transmitted the proposal to the States on February 8, 1781, under a

cover letter stressing the “precarious Manner” in which 

Congress had to fund the Army under the requisition system. 5 Letters of Members of the Continental Congress 564

(E. Burnett ed. 1931). 

Every State but Rhode Island approved the Impost of 

1781. See 1 Documentary History of the Ratification of the

Constitution 63 (M. Jensen ed. 1976) (Documentary History). But, because the Articles of Confederation required 

amendments like the impost to be approved unanimously,

Rhode Island’s refusal defeated the amendment. Articles of 

Confederation, Art. 13; see also 23 Journals of the Continental Congress 783–784 (1914). In a letter to the Confederation Congress,4 the Rhode Island Legislature explained 

that it rejected the impost “[b]ecause it would be unequal in 

—————— 4After the ratification of the Articles of Confederation in March 1781, 

the Continental Congress became the Confederation Congress. See 1 

Documentary History 136. 
Cite as: 602 U. S. ____ (2024) 9 

THOMAS, J., dissenting 

its operation, bearing hardest on the most commercial 

states,” including Rhode Island. Id., at 788. One State’s 

jealousy of its lucrative tax base prevented the reform of the 

Articles’ flawed requisition system. 

A year later, the Confederation Congress again proposed

a national taxing power with the Impost of 1783. The proposal languished for years, and then failed after New York 

refused its consent in February 1787. See 1 Documentary 

History 190, n. 3. As the second impost awaited its slow 

death, the Confederation Congress issued a dire warning 

about the financial condition of the National Government 

in February 1786. See 30 Journals of the Continental Congress 70, 75 (J. Fitzpatrick ed. 1934). Faced with mounting

threats to the security of the country, and requisitions that 

had become “so irregular in their operation” as to be “dangerous to the welfare and peace of the Union,” Congress asserted “that the crisis has arrived” when the people of the 

United States must decide whether, “for want of a timely

exertion in establishing a general revenue,” they will risk

both the existence of the Union and the liberty that they

won in the Revolution. Id., at 72, 75. 

The practical impossibility of reforming the Articles to include a national taxing power was among the primary reasons for the Constitutional Convention of 1787. John Adams later reflected as Vice President: “The opposition of 

Rhode Island to the impost seems to have been the instrument which providence thought fit to use for the great purpose of establishing the present constitution.” 26 Documentary History 743 (J. Kaminski et al. eds. 2013). In February

1787, the Continental Congress endorsed the call for a convention of delegates in Philadelphia. See 32 Journals of the 

Continental Congress 74 (R. Hill ed. 1936). Virginia had

been the first State to answer that call, and in appointing 

delegates, made prominent reference to the Confederation

Congress’s “alarming representations” about the poor state 
 

 

10 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

of public finance. 1 Documentary History 196–198 (discussing Congress’s warning of February 1786). The Virginia

delegation likewise emphasized the “inefficiency of requisitions” when it opened the proceedings at the Convention. 1 

Records of the Federal Convention of 1787, pp. 18–19 (M. 

Farrand ed. 1911) (Farrand’s Records). 

The possibility of a federal taxing power was highly controversial at the Constitutional Convention, despite widespread acknowledgment of the need to reform public finance. The Virginia plan—a broad outline that was

selected as the basis for the new Government—did not go

so far as to include a federal taxing power. The Virginia

delegation apparently considered it less controversial to 

open the Convention with a proposal that gave the Federal 

Government the ability to enforce requisitions against the 

States by military force. Id., at 21. The New Jersey plan, 

by contrast, did include federal taxing powers. Id., at 243. 

Reason prevailed, and the Convention judged it more prudent to risk a federal taxing power than the extraction of 

federal revenue by the use of military force against the

States. See id., at 54 (“[Madison] observed that the more 

he reflected on the use of force [against delinquent States], 

the more he doubted the practicability, the justice and the

efficacy of it”). The Convention proposed the Constitution 

with its taxing provisions as described above; they would be

ratified unchanged. See 2 id., at 590, 594, 596; supra, at 4– 

6. 

Unsurprisingly, the proposed creation of a federal taxing

power provoked many of the most passionate criticisms by

opponents of ratification. The Antifederalists warned that 

a federal taxing power would destroy the state governments. Brutus wrote that the central question presented

by ratification was “whether the thirteen United States

should be reduced to one great republic . . . or whether they 

should continue thirteen confederated republics.” Brutus 

No. 1 (Oct. 18, 1787), in 2 The Complete Anti-Federalist 364 
Cite as: 602 U. S. ____ (2024) 11 

THOMAS, J., dissenting 

(H. Storing ed. 1981). In support of his dramatic thesis, 

Brutus asserted that “the individual states must very soon 

be annihilated,” in part by the federal taxing power. Id., at 

365. 

The destructive force of the federal taxing power, as Brutus explained it, arose from the fact that it forced the States 

to compete with the Federal Government for a tax base. Because the Constitution prevented the States from emitting 

paper money and laying duties or imposts, “[t]he only mean

therefore left, for any State to support its government and 

discharge its debts, is by direct taxation.” Id., at 366. But, 

even the ability to resort to direct taxes would be fruitless, 

because the power of direct taxation was shared with the 

Federal Government. Ibid. Brutus thus argued that once 

the Federal Government “begins to exercise the right of taxation in all its parts, the legislatures of the several states

will find it impossible to raise monies to support their governments” and then “dwindle away.” Ibid. Other Antifederalists sounded the same theme at the state ratifying conventions. See, e.g., 3 Debates on the Constitution 29 (J. 

Elliot ed. 1836) (Elliot’s Debates) (George Mason arguing in

Virginia that the “two concurrent powers” of the State and

Federal Governments to impose taxes directly upon the

people “cannot exist long together”).

The Federalists’ defense of the new national taxing power 

stressed that the Federal Government would impose direct 

taxes only sparingly, as needed to supplement the revenue

from imposts in emergencies. Madison explained that 

“[w]hen . . . direct taxes are not necessary, they will not be 

recurred to. It can be of little advantage to those in power

to raise money in a manner oppressive to the people.” Id., 

at 95. And, Federalists highlighted the protection provided 

by the rule of apportionment. Hamilton explained that direct taxes “never can oppress a particular state by an unequal imposition; because the Constitution has provided a 
 

12 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

fixed ratio, a uniform rule, by which this must be regulated.” 2 id., at 365. Madison argued that because representation and direct taxation were apportioned by the same

formula, unjust taxes could not feasibly be imposed; those 

responsible for paying direct taxes are correspondingly able 

to defeat their imposition. See 3 id., at 256–257.5 

With the Constitution’s ratification, the requisition system was replaced by a system that gave the Federal Government the taxing power it had lacked under the Articles 

of Confederation. That increase in power came at the expense of the States. The States gave up the power to tax 

interstate and foreign commerce, which was expected to be

the main source of federal revenue. They did retain the 

power of direct taxation, but had to share it with the Federal Government—an arrangement that motivated significant opposition to the new Constitution. The limitations on 

the Federal Government’s ability to exercise that concurrent power were thus an essential component of the constitutional compromise. 

3 

Postratification disagreement about what qualified as a

“direct tax” would eventually lead to the adoption of the Sixteenth Amendment. Even though the distinction between

direct and indirect taxes was an important component of 

—————— 5Several state ratifying conventions proposed amendments to 

strengthen the protection provided by the Direct Tax Clause. For example, the Massachusetts ratifying convention proposed that the Constitution be modified to allow direct taxes only “when the moneys arising from

the impost and excise are insufficient for the public exigencies,” and even

then only after Congress first attempted to obtain such funds through 

requisitions. 1 Elliot’s Debates 322–323. The ratifying conventions of

South Carolina, New Hampshire, New York, and Rhode Island concurred 

in the proposed amendment. Id., at 325, 326, 329, 336. Although those

proposals never became part of the Constitution, they demonstrate the

importance that many ratifying States placed upon limitations to Congress’s power to lay direct taxes. 
 

Cite as: 602 U. S. ____ (2024) 13 

THOMAS, J., dissenting 

the founding compromise, it was not entirely clear how to

distinguish between the two classes of taxes. The scope of

the “direct tax” category proved immediately controversial. 

And, that controversy eventually came to bear on the question of income taxation, with the Court initially concluding

that the Direct Tax Clause was not a barrier to taxing incomes. 

As the Constitution’s text made clear, a “Capitation” was

“direct.” Art. I, §9, cl. 3. And, all agreed that taxes on land 

and slaves were considered direct. See 3 Elliot’s Debates 

229. But, beyond that, the precise boundary between direct

and indirect taxes was debatable. An exchange at the Constitutional Convention preserved in Madison’s notes is often cited on the subject: “Mr King asked what was the precise meaning of direct taxation? No one answd.” 2 

Farrand’s Records 350. 

This Court grappled with the question in a significant 

case decided soon after ratification. In 1794, the Third Congress passed “An Act laying duties upon Carriages for the 

conveyance of Persons.” Act of June 5, 1794, ch. 45, 1 Stat. 

373. The tax was not apportioned among the States. Some 

opposed the tax on the theory that a tax on personal property, such as carriages, was a direct tax that required apportionment.6 

When Daniel Hylton failed to pay the tax on his 125 carriages, the United States brought a suit against him, and 

the case soon found its way to the Supreme Court. Hylton 

v. United States, 3 Dall. 171, 171–172 (1796) (Hylton’s 

Case). “The argument turned entirely upon . . . whether the 

tax . . . was a direct tax.” Id., at 172. The four Justices who 

—————— 6 James Madison, for example, despaired about the unconstitutionality

of the tax in a letter to Thomas Jefferson. See 15 Papers of James Madison 327 (T. Mason, R. Rutland, & J. Sisson eds. 1985) (“And the tax on 

carriages succeeded in spite of the Constitution . . . . By breaking down

the barriers of the constitution . . . wealth may find a precarious defence 

in the shield of justice”). 
 

 

 

14 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

sat for the case each agreed that the tax was constitutional, 

and the three who offered reasons suggested that “direct” 

taxes were limited to capitation and land taxes. But, they 

did so with some caution. 

Justice Chase was “inclined to think, but [did] not give a 

judicial opinion, that the direct taxes contemplated by the 

Constitution, are only two, to wit, a capitation, or poll tax, 

simply, without regard to property, profession, or any other 

circumstance; and a tax on LAND.” Id., at 175. He 

“doubt[ed] whether a tax, by a general assessment of personal property, . . . is included within the term direct tax.” 

Ibid. Justice Paterson observed that “[w]hether direct

taxes, in the sense of the Constitution, comprehend any

other tax than a capitation tax, and tax on land, is a questionable point.” Id., at 177. Justice Iredell opined that

“[p]erhaps a direct tax in the sense of the Constitution, can 

mean nothing but a tax on something inseparably annexed 

to the soil . . . . A land or poll tax may be considered of this

description.” Id., at 183. 

Additional disputes over what constituted direct taxation

arose when the Government resorted to new forms of taxation to finance the Civil War. In several cases decided 

shortly after the war, the Court relied on Hylton’s Case to 

conclude that new taxes were indirect. First, the Court reasoned that “[i]f a tax upon carriages, kept for his own use 

by the owner, [was] not a direct tax,” then “a tax upon the 

business of an insurance company” was not a direct tax. Pacific Ins. Co. v. Soule, 7 Wall. 433, 446 (1869). Next, the 

Court concluded that a tax on the circulation of bank notes 

was also indirect, but it surveyed ratification-era sources to 

hint at a slightly more expansive definition of direct taxes. 

Veazie Bank v. Fenno, 8 Wall. 533, 544 (1869) (“direct taxes

were such as may be levied by capitation, and on lands and 

appurtenances; or, perhaps, by valuation and assessment of 

personal property upon general lists”). Finally, the Court

concluded that a tax on the devolution of title to real estate 
 

Cite as: 602 U. S. ____ (2024) 15 

THOMAS, J., dissenting 

was indirect, acknowledging that “it never ha[d] been decided” whether any taxes besides “[t]axes on lands . . . and 

capitation taxes” were “direct taxes.” Scholey v. Rew, 23 

Wall. 331, 347 (1875). 

The Civil War also prompted Congress to enact the Nation’s first-ever federal income tax. In 1861, Congress imposed a tax of three percent “upon the annual income of 

every person residing in the United States, whether such

income is derived from any kind of property, or from any 

profession, . . . or from any other source whatever,” to the 

extent that income exceeded $800. §49, 12 Stat. 309. Over 

the course of the Civil War, the income tax was paid by as 

many as 1 in 10 Union households and accounted for about

a fifth of federal revenues. S. Weisman, The Great Tax 

Wars 101–102 (2002) (Weisman). The tax remained in 

force, with modifications, until it expired in 1871. §6, 16

Stat. 257. 

The Court did not consider the constitutionality of the 

Civil War income tax until a decade after its expiration, in 

Springer v. United States, 102 U. S. 586 (1881). The “main 

question” was whether the tax was an unapportioned direct 

tax that violated the Direct Tax Clause. Id., at 595. The 

Court held that the income tax was not a direct tax. Relying 

heavily on Hylton’s Case, the Court reasoned “that direct 

taxes, within the meaning of the Constitution, are only capitation taxes . . . and taxes on real estate.” 102 U. S., at 602. 

Accordingly, the income tax at issue was “within the category of an excise or duty.” Ibid.7 

—————— 7 In the case before us, the Government relies heavily on another case

involving the Civil War income tax, Collector v. Hubbard, 12 Wall. 1 

(1871). According to the Government, Hubbard “upheld [Congress’s]

power to” impose “taxes on undistributed corporate earnings” as “income 

taxes,” a result that subsequent decisions “temporarily undermined” until “the Sixteenth Amendment . . . reinstat[ed]” it. Brief for United States 

9. But, Hubbard is of virtually no relevance to the Sixteenth Amendment. Contrary to the Government’s assertions, the taxpayer in Hub-
 

16 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

In summary, after disputes over the scope of the Direct 

Tax Clause between the founding and the expiration of the 

Civil War income tax, the Court apparently concluded that 

direct taxes were limited to poll taxes and taxes on land. 

Ibid. But, the Court expressed some doubt as to the proper 

classification of taxes “levied by . . . valuation and assessment of personal property.” Veazie Bank, 8 Wall., at 544. 

Based on that narrow reading of the Direct Tax Clause, the 

Court upheld the Civil War income tax against a constitutional challenge. But, the long-running skirmishes about

direct taxation would soon come to a dramatic climax following the imposition of the first federal income tax in 

peacetime. 

4 

I next consider the single most important piece of context 

for understanding the Sixteenth Amendment: Pollock v. 

Farmers’ Loan & Trust Co., 158 U. S. 601, the case that the 

Amendment overruled. In Pollock, the Court concluded, for 

the first time, that a tax was direct, not apportioned, and 

therefore unconstitutional. The Court’s reasoning turned

on the premise that the Constitution permits no distinction 

between taxing income and taxing the source from which 

that income is derived. The holding of Pollock thus meant 

that most income taxes would have to be apportioned, a requirement that made them politically unpalatable. See supra, at 6 (describing possible state-by-state variations in

rates for apportioned taxes). Because the Sixteenth 

—————— 

bard made a statutory argument about the meaning of the word “entitled,” not any argument about the scope of Congress’s power. See Brief 

for Respondent in Collector v. Hubbard, O. T. 1870, No. 122, p. 4. Nor 

did Hubbard uphold the tax as an income tax. Instead, it interpreted the 

statute as a tax on a shareholder’s property rights in undistributed profits. 12 Wall., at 18. Because the taxpayer did not bring a constitutional

challenge based on the Direct Tax Clause, the Court had no occasion to

consider the potential implications of treating the tax as a property tax. 
Cite as: 602 U. S. ____ (2024) 17 

THOMAS, J., dissenting 

Amendment overruled the result in Pollock, an accurate understanding of the case is essential to understanding the

Amendment. 

Congress imposed the Nation’s first peacetime income tax

as part of the Revenue Act of 1894. The Act paired a new 

tax on the incomes of the wealthiest two percent of Americans with tariff cuts that would benefit less wealthy consumers. See Weisman 132–133, 145. The income-tax component of the Act provided: 

“That [from 1895 until 1900] there shall be assessed,

levied, collected, and paid annually upon the gains, 

profits, and income received in the preceding calendar 

year by [citizens and resident aliens], whether said

gains, profits, or income be derived from any kind of 

property, rents, interest, dividends, or salaries, or from 

any profession, trade, employment, or vocation . . . , or 

from any other source whatever, a tax of two per centum on the amount so derived over and above four 

thousand dollars.” §27, 28 Stat. 553. 

The income tax was not apportioned among the States by

population.

In Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429 

(1895), the Court considered whether the 1894 income tax 

was a direct tax that failed to satisfy the Direct Tax

Clause’s apportionment requirement. The taxpayer argued

that portions of the tax were direct because “imposing a tax

on the income or rents of real estate, imposes a tax upon the

real estate itself.” Id., at 555. And, taking the position that

taxes on personal property are also direct taxes, the taxpayer argued that “imposing a tax on the . . . income of 

bonds or other personal property . . . imposes a tax on the 

personal estate itself.” Ibid. 

The Court endeavored to determine what “were recognized as direct taxes” “at the time the Constitution was 

framed and adopted.” Id., at 558. The Court considered 
 

18 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

historical context, the records of the Constitutional Convention, the Federalist Papers, other documents from the ratification debates, the 1794 carriage tax, and Hylton’s Case. 

157 U. S., at 558–568, 570–572. The Court concluded that 

“all taxes on real estate or personal property or the rents or 

income thereof were regarded as direct taxes” at the time 

the Constitution was ratified. Id., at 573–574. After reaching a conclusion about the original meaning of the Constitution, the Court surveyed its precedents and observed that 

“in none of them is it determined that taxes on rents or income derived from land are not taxes on land,” and that 

“none . . . discussed the question whether a tax on the income from personalty is equivalent to a tax on that personalty.” Id., at 579. The Court had some difficulty explaining 

Springer, which stated that direct taxes are limited to capitation and land taxes and concluded that a tax on income 

was an indirect tax. See supra, at 15. But, the Court returned to “[t]he original record” in Springer to review the 

sources of the taxpayer’s income, and it distinguished the 

case on that ground. 157 U. S., at 578–579. 

In the end, the Court concluded that income could not be 

distinguished from the source from which it was derived for 

purposes of determining whether a tax on that income 

would be direct or indirect. It was “unable to perceive any 

ground” “upon which to rest the contention that real estate

belongs to one of the two great classes of taxes,” i.e., the directtax class, “and the rent or income which is the incident of 

its ownership belongs to the other,” i.e., the indirect-tax 

class. Id., at 581. It grounded that conclusion in the fact 

that the Direct Tax Clause was a federalism provision at 

the heart of the constitutional compromise: “If, by calling a 

tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the Nation and the States of 

which it is composed, would have disappeared, and with it 

one of the bulwarks of private rights and private property.” 
 

 

Cite as: 602 U. S. ____ (2024) 19 

THOMAS, J., dissenting 

Id., at 583. 

The Court held that the Act was unconstitutional in part, 

“so far as it levies a tax on the rents or income of real estate.” Ibid. But, the Justices divided evenly on the question

whether the tax was unconstitutional “as to the income 

from personal property.” Id., at 586. The case was therefore scheduled for rehearing.

After rehearing, the Court extended its logic and held

that a tax on income derived from personal property—like 

a tax on income derived from real property—was a direct 

tax. 158 U. S., at 625. The Court offered a more thorough

explanation for why income could not be distinguished from 

its source when classifying a tax. It began by observing that

the distinction between direct and indirect taxes was critical to our system of federalism. By ratifying the Constitution, the States “gave up the great sources of revenue derived from commerce” and “retained the power of direct 

taxation,” but only concurrently with the Federal Government. Id., at 620. Limitations on federal direct taxation 

offered state governments a fiscal safe haven against expanding federal authority, in recognition of the fact “that

the power to tax involved the power to destroy.” Id., at 621. 

“[T]he qualified grant” of an apportioned direct-taxation

power built security into the “structure of the government

itself . . . by providing that direct taxation and representation in the lower house of Congress should be adjusted on 

the same measure.” Id., at 621–622. 

The Court relied on those federalism principles to reject

the argument “that income is taxable irrespective of the

source from whence it is derived.” Id., at 629. It explained 

that the Constitution—read “in its plain and obvious sense” 

and in the context of “the circumstances attending the formation of the government”—could not be understood to

treat income “as belonging to a totally different class” of

taxation than the class “which includes the property from 
 

 

 

 

20 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

whence the income proceeds.” Id., at 627–628. Such an interpretation would leave the Direct Tax Clause “utterly illusory and futile, and the object of its framers defeated.” 

Id., at 628. The Court refused to allow the effect of the Direct Tax Clause to be “refined away by forced distinctions 

between” income and source. Ibid. 

5 

The Sixteenth Amendment was designed to overrule Pollock’s obstacle to an income tax, and it was understood by 

the public in those terms. Pollock stood in some tension 

with the Civil War tax cases, and it was not well received. 

Critics likened it to Dred Scott v. Sandford, 19 How. 393 

(1857), and the decision became a major issue in the 1896 

Presidential election. Weisman 148. By the 1908 Presidential election, both major political parties supported finding 

a way, Pollock notwithstanding, to impose an income tax.

See E. Seligman, The Income Tax 591–592 (2d ed. 1914).

In 1909, President Taft pledged his support for an incometax amendment. In a widely published message to Congress, he explained that “[t]he decision of the Supreme

Court” in Pollock “deprived the national government of a 

power which” it “ought to have.” Taft Asks for Tax, Washington Post, June 17, 1909, p. 4. Taft therefore asked Congress to “propose an amendment to the Constitution conferring the power to levy an income tax upon the national

government without apportionment.” Ibid. 

Shortly after the President delivered his message, Senator Norris Brown of Nebraska proposed an income-tax

amendment providing: “The Congress shall have power to 

lay and collect direct taxes on incomes without apportionment among the several States according to population.” 44 

Cong. Rec. 3377 (1909). The proposed amendment’s narrow 

focus on an income tax was significant. After all, a constitutional amendment could have easily eliminated Pollock’s 

obstacle to income taxation by removing the Constitution’s 
Cite as: 602 U. S. ____ (2024) 21 

THOMAS, J., dissenting 

direct-tax provisions wholesale.8 

A few weeks later, the proposed amendment emerged

from Committee in its modern form. It is not clear how the 

original proposal’s reference to “direct taxes” was removed,

or how the phrase “from whatever source derived” was 

added. See E. Jensen, The Taxing Power, the Sixteenth

Amendment, and the Meaning of “Incomes,” 33 Ariz. St.

L. J. 1057, 1116–1117 (2001). The Amendment was passed 

by Congress on July 12, 1909. See 44 Cong. Rec. 4440. And, 

the Secretary of State certified that the Amendment had

been ratified by the States on February 25, 1913. 37 Stat. 

1785. 

B 

With a full understanding of the context against which

the Sixteenth Amendment was ratified, two conclusions become clear. First, because the Amendment abolished Pollock’s rule that an income tax must be classified as direct or 

indirect based on whether a tax on the source of that income 

would be direct or indirect, the Amendment created a constitutional distinction between income and its source. Second, because Sixteenth Amendment “income” must be distinguished from its source, the Amendment includes a 

realization requirement. 

1 

I return, finally, to the text of the Sixteenth Amendment: 

“The Congress shall have power to lay and collect taxes on 

—————— 8 In fact, that possibility was suggested on the Senate floor as soon as 

the proposed amendment was read. 44 Cong. Rec. 3377 (“[I]f the Senator 

from Nebraska will change his amendment to the Constitution so as to 

strike out” all references to direct taxes, “he will accomplish all that his

amendment proposes to accomplish and not make a constitutional

amendment for the enacting of a single act of legislation”). But, Senator 

Brown responded that his “purpose [was] to confine it to income taxes 

alone.” Ibid. 
 

22 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

incomes, from whatever source derived, without apportionment among the several States, and without regard to any

census or enumeration.” Against the background of Pollock, the “power to lay and collect taxes on incomes, from 

whatever source derived, without apportionment” under 

the Sixteenth Amendment has an obvious and narrow 

meaning. The only thing the Amendment changed about

the Constitution was to abolish Pollock’s rule that an income tax is a direct tax if a tax on the source of the income 

would be a direct tax. The Sixteenth Amendment left everything else in place, including the federalism principles 

bound up in the division between direct and indirect taxes.

The Court was first asked to interpret the Sixteenth 

Amendment in Brushaber v. Union Pacific Railroad Co., 

240 U. S. 1. A taxpayer raised an exhaustive set of “twentyone constitutional objections” to the first income tax under

the Sixteenth Amendment. Id., at 10. Recognizing that the

text of the Amendment could not be understood in a vacuum, the Court began with the text of the original taxing

provisions and the history of the disputes over direct taxes

from Hylton’s Case to Pollock. 240 U. S., at 12–17. I can 

little improve on Brushaber’s explanation of the Sixteenth 

Amendment. 

“[T]he whole purpose of the Amendment was to relieve all

income taxes . . . from apportionment [based on] a consideration of the source whence the income was derived.” Id., at 

18. Pollock stood for the rule that “whether a tax on income 

[is] direct” must be determined based upon a consideration 

of “the property from which the income [is] derived.” 240 

U. S., at 18. It was by “the rule applied in the Pollock Case 

. . . alone” that income “taxes were removed from the great

class of [indirect taxes] and were placed under the . . . direct 

class.” Id., at 19. The Amendment did nothing more than 

remove that rule. The result was “the prevention of the resort to the sources from which a taxed income was derived 

in order to . . . place [an income tax] in the class of direct 
Cite as: 602 U. S. ____ (2024) 23 

THOMAS, J., dissenting 

taxes.” Ibid. But, other than that change, the Amendment 

“was drawn with the object of maintaining the limitations 

of the Constitution,” including Pollock’s holding that direct 

taxes included “taxes levied directly on personal property

because of its ownership.” Ibid. 

The Sixteenth Amendment thus facilitated an income tax 

by creating a new constitutional distinction between “income” and its “source.” Under the Amendment, “from whatever source” income is “derived,” a tax on it is indirect and 

therefore not subject to the rule of apportionment. But, as 

to taxes on the sources of income, the restrictions imposed

by the division between direct and indirect taxes continued 

to apply with full force. And, taxes on property continued

to be classified as direct taxes. 

2 

Because the Sixteenth Amendment requires a way to distinguish between income and source, it includes a realization requirement. The text of the Amendment incorporates 

such a requirement, and the concept of realization was well

understood at the time of ratification. The Constitution 

thus limits unapportioned income taxes to taxes on realized 

income. 

The word “income” in the Sixteenth Amendment must be 

interpreted in light of the Amendment’s distinction between income and source. As the Court appreciated in Eisner v. Macomber, failure to understand “income” in this way 

leads to an interpretation of the Sixteenth Amendment that 

mistakenly displaces aspects of the original taxing provisions that the Amendment left in place: “In order, therefore,

that the clauses cited from Article I of the Constitution may

have proper force and effect, save only as modified by the

Amendment, and that the latter also may have proper effect, it becomes essential to distinguish between what is

and what is not ‘income.’” 252 U. S., at 206. 

Without an understanding of “income” that distinguishes 
 

 

24 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

it from “source,” the Sixteenth Amendment undermines the 

restriction imposed by the Direct Tax Clause. The Government asserts that the Sixteenth Amendment uses “‘income’ 

. . . to refer to all economic gains.” Brief for United States 

14 (some internal quotation marks omitted). That understanding of “income” would allow taxes on real and personal 

property without apportionment. To be sure, most of the 

Government’s arguments focus on “taxes on individuals’ pro

rata shares of undistributed corporate earnings.” Id., at 13. 

But, the Government is not shy about the fact that its definition of income includes things such as “increase in the 

value of a corporation’s capital assets,” “increase in the 

value of unsold property,” and “appreciation in the value of 

securities.” Id., at 16 (alterations and internal quotation 

marks omitted). Those increases are “income” in a purely 

economic sense, but not in a sense that meaningfully distinguishes between “income” and the “source” from which it 

is “derived.” A tax on each, whether it be an increase in 

assets, unsold property, or securities, would be a tax on the 

value of real estate or property, and should therefore require apportionment under the Direct Tax Clause.

The text of the Sixteenth Amendment points to the concept of realization, as the Court explained that concept in 

Macomber. The Amendment is clear that the word “income” 

refers to something that is “derived.” Dictionaries at the 

time of ratification defined “derive” as “[t]o receive, as from 

a source or origin” and “to draw.” Webster’s New International Dictionary 601 (1913) (Webster’s). And, that sense of 

“derived” maps neatly onto Macomber’s realization-focused 

definition of “income” as being “received or drawn by the recipient (the taxpayer) for his separate use.” 252 U. S., at 

207. 

In fact, the idea of realization as the distinction between 

income and source long predates both Macomber and the 

Sixteenth Amendment. As the Government acknowledges, 

“the concept” of “realization . . . was well established when 
Cite as: 602 U. S. ____ (2024) 25 

THOMAS, J., dissenting 

the Amendment was adopted.” Brief for United States 15. 

The term “realized” appeared in several Civil War income

tax provisions. Id., at 16 (citing §116, 13 Stat. 281; §7, 16 

Stat. 257–258). And, contemporaneous “[d]ictionaries defined ‘realize’ as ‘to convert any kind of property into

money.’” Brief for United States 15–16 (quoting Webster’s

1778, and citing Black’s Law Dictionary 993 (2d ed. 1910);

alteration omitted). The Government argues that the decision to omit the often-used word “realized” from the Sixteenth Amendment is significant evidence that the Amendment does not require realization. See Brief for United 

States 16. But, the choice to instead use the near-synonym

“derived” merely reflects the repeated use of the word “derive” to describe the relationship of income to its source in 

Pollock, to which the Sixteenth Amendment was a direct 

response. See 158 U. S., at 618, 629, 635. 

The metaphor that the Court famously used in Macomber 

also shows the deep roots of the realization concept. To illustrate the “fundamental relation of ‘capital’ to ‘income,’” 

Macomber compared “the former . . . to the tree or the land, 

[and] the latter to the fruit or crop.” 252 U. S., 206. That 

understanding of income as being something “severed from” 

its source predated the Sixteenth Amendment. In a wellcited case from 1878, the Georgia Supreme Court relied on

a tree-and-fruit analogy in a tax case to explain the difference between income and property: “The fact is, property is 

a tree; income is the fruit.” Waring v. Mayor and Aldermen 

of Savannah, 60 Ga. 93, 100 (1878); see also Black’s Law 

Dictionary, at 612 (defining “income” (citing Waring, 60 

Ga., at 99)).

The text of the Sixteenth Amendment, read against the

background of its adoption, confirms that the “incomes” 

that the Sixteenth Amendment allows Congress to tax

without apportionment are only realized incomes. We 

granted certiorari in this case to answer whether Congress 

may “tax unrealized sums without apportionment among 
 

 

26 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

the states.” Pet. for Cert. i. As the Sixteenth Amendment 

makes clear, the answer to that question is a resounding 

“no.” The Court errs today by failing to correct the Ninth

Circuit’s contrary understanding. 

* * * 

It is imperative to give the original taxing provisions in 

Article I their proper effect. Those provisions reflect a delicate compromise under which the founding generation took

the great risk of ceding much of the States’ exclusive taxing 

authority to the Federal Government. Supra, at 7–12. 

Without that compromise, the Constitution could easily 

have been rejected. To be sure, the States slightly altered

the original agreement by ratifying the Sixteenth Amendment. But, a constitutional amendment does not affect our 

duty of fidelity to the aspects of the original agreement that 

remain in place—including the Direct Tax Clause. If a written constitution is to mean anything, the compromises it 

records must bind us until we amend them. 

II 

The Court strains to uphold the Mandatory Repatriation 

Tax without addressing whether the Sixteenth Amendment

includes a realization requirement, the question we agreed

to answer in this case. The majority starts by surveying a 

scattered sampling of precedents—mostly about tax avoidance—to invent an “attribution” doctrine that sustains the 

MRT. The majority also relies on “longstanding congressional practice” to conclude that the Moores’ claim fails because they cannot distinguish the MRT from similar taxes 

imposed by Congress in the past, which the Moores concede

are constitutional. Neither point can withstand scrutiny. 

A 

To avoid the question whether the Sixteenth Amendment 

requires realization, the majority reframes the case as be-
 

Cite as: 602 U. S. ____ (2024) 27 

THOMAS, J., dissenting 

ing about whether Congress may attribute an entity’s realized income to shareholders or partners. Ante, at 8. According to the majority, our precedents establish a “clear 

rule” that the Sixteenth Amendment empowers Congress to 

choose whether “to tax [an] entity on its income” or instead

“tax the entity’s shareholders or partners on their share of 

the entity’s undistributed income.” Ante, at 17. Applying

this rule, the Court concludes that the MRT permissibly

chooses to attribute undistributed income earned by foreign 

corporations to their American shareholders. The Court 

thus refuses to address the “Government’s argument that a

gain need not be realized to constitute income under the

Constitution” because the foreign corporation has realized

the income. Ante, at 12–13, n. 3. 

The majority’s Sixteenth Amendment “attribution” doctrine is a new invention. The majority justifies its creation 

by plucking superficially supportive phrases from an eclectic selection of tax cases. But, none of the cases supports

the proposition that the Sixteenth Amendment empowers

Congress to freely attribute income to any taxpayer it reasonably chooses.

The majority begins with Burk-Waggoner Oil Assn. v. 

Hopkins, 269 U. S. 110 (1925), a case that it says “articulated [the] fundamental principle” that “Congress could tax 

. . . income as it ch[ooses],” either by taxing an entity or an 

individual. Ante, at 9. But, Burk-Waggoner merely held 

that Congress may tax a de facto corporation on its own income, even if it is formally a partnership under state law.

See 269 U. S., at 114 (“[N]othing in the Constitution precludes Congress from taxing as a corporation an association

which, although unincorporated, transacts its business as

if it were incorporated”). Tellingly, we have never cited 

Burk-Waggoner for the proposition derived by the majority, 

but instead for the proposition that federal statutes “designed to tax income actually earned . . . are not to be frustrated by state laws.” Commissioner v. Tower, 327 U. S. 
 

 

28 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

280, 288 (1946) (citing 269 U. S., at 114); see also Lyeth v. 

Hoey, 305 U. S. 188, 194 (1938) (same); Hemphill v. Orloff, 

277 U. S. 537, 550 (1928) (same). Burk-Waggoner thus 

shows that state law may not be used as a means of evading 

federal taxes—not that Congress may choose whether to attribute income to entities or individuals. 

The majority then cites Burnet v. Leininger, 285 U. S. 136 

(1932), which it says “reiterated” that Congress can choose 

to impose income-tax liability “‘upon [a] partnership directly’” or “‘upon the individuals carrying on business in 

partnership.’” Ante, at 9 (quoting 285 U. S., at 142; internal 

quotation marks omitted). But, the majority quotes language that is part of a due process holding, not an application of the Sixteenth Amendment. Leininger involved a taxpayer’s attempt to evade taxation by assigning half of his 

share in a partnership’s income to his wife. Id., at 138. The 

taxpayer argued that assessing income taxes against him

based on “a partnership interest owned by his wife” violated 

the Fifth Amendment’s Due Process Clause. Brief for 

Respondent in Burnet v. Leininger, O. T. 1931, No. 426, 

p. 24. The Court rejected the argument, concluding that it

did not violate due process to “tax the distributive share of 

each partner” by ignoring the taxpayer’s attempt to divert

his income to his wife. 285 U. S., at 142. The majority is

clear that it offers no opinion about due process questions.

See supra, at 4–5, nn. 4, 6. Because Leininger is a due process case, it is unclear how it supports the majority’s Sixteenth Amendment attribution doctrine. 

Next, the majority claims that the Court “reaffirmed that

Congress may choose to tax either [a] partnership or [its]

partners” in Heiner v. Mellon, 304 U. S. 271 (1938), when it

rejected the argument by members of a partnership “that

Congress could not tax them on income that they did not

and could not personally receive.” Ante, at 10. But, Heiner 

is a statutory interpretation case. Under the applicable 
Cite as: 602 U. S. ____ (2024) 29 

THOMAS, J., dissenting 

statute, the taxpayers were subject to a tax on their “distributive share, whether distributed or not, of the net income of the partnership.” §218(a), 40 Stat. 1070. The taxpayers argued only that “there was no distributive share” 

within the meaning of the statute, because distribution was

currently impossible under state law; they made no argument about the scope of Congress’s power. Brief for Respondents in Heiner v. Mellon, O. T. 1937, No. 144 etc., 

p. 34. Heiner’s interpretation of the statutory phrase “distributive share” cannot be understood as a holding about 

the scope of Congress’s supposed attribution power.

The majority completes its survey of “attribution” precedents with Helvering v. National Grocery Co., 304 U. S. 282 

(1938), which it says extended Heiner’s attribution principle from partnerships to corporations. Ante, at 10. But, 

National Grocery demonstrates Congress’s ability to legislate against tax-avoidance schemes—not an ability to freely 

attribute corporate income to shareholders. The majority

misleadingly describes National Grocery as involving “the

controlling shareholder of a corporation” being taxed “individually . . . on the year’s profits.” Ante, at 10 (internal quotation marks omitted). In reality, the case involved a tax 

paid by a corporation—owned 100% by one person—after 

the corporation permitted profits to accumulate without 

distribution “‘for the purpose of preventing the imposition 

of [a] surtax upon [the] sole stockholder.’” 304 U. S., at 285. 

In essence, the sole stockholder used the corporation as a

tax-free bank account to hold what was really his income.

The Court concluded that Congress may legislate to prevent 

“the sole owner of [a] business” from “conducting it as a corporation” to avoid the tax consequences that would attach 

if the business had “been carried on as a partnership.” Id., 

at 288. The Court cited Heiner merely to explain those tax

consequences, not to support an attribution principle. National Grocery is yet another tax-evasion case, not an application of an attribution principle. 
 

 

30 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

At most, the cases cited by the majority demonstrate that

Congress may attribute income to the entity or individual

who actually controlled it when necessary to defeat attempts to evade tax liability. They do not suggest that Congress may freely choose whether to impose an income tax 

on a corporation or on its shareholders. The “clear rule” 

that the majority relies on to sidestep the realization question is thus a mirage. Ante, at 17. 

B 

The majority separately concludes that the Moores’ claim

fails because they cannot distinguish the MRT from other 

longstanding taxes that they concede are constitutional. 

The majority sees no distinction between the MRT and

older taxes on partnerships, “S corporations,” and closely

held foreign corporations under other parts of subpart F. 

Ante, at 16–21. But, the majority’s insistence that the MRT

is just like other forms of pass-through taxation is not convincing.

First, the MRT’s taxation of corporate shareholders is not

like pass-through taxation of partners. The Moores are correct that the Sixteenth Amendment allows Congress to tax

partners on partnership income because “partnerships 

hav[e] no existence separate from their partners.” Brief for 

Petitioners 51. A partner’s share of partnership income is 

therefore understood to be his own income. The majority

quibbles with the Moores’ understanding of early-20th century partnership law and points out that “legislatures

treated partnerships as separate entities in many contexts,” including for some tax purposes. Ante, at 17–18. 

But, the fact that a partnership can sometimes be treated 

as an entity is beside the point. The significant fact is that

partners had long been considered to be subject to income

taxes without consideration of the partnership; longstanding taxes based on that understanding are not implicated 

by the Moores’ challenge to the MRT. 
 

Cite as: 602 U. S. ____ (2024) 31 

THOMAS, J., dissenting 

Second, and for similar reasons, the MRT’s taxation of 

corporate shareholders is not like pass-through taxation of 

shareholders of “S corporations.” An S corporation is a corporation that does not have more than 100 shareholders,

does not have any shareholder who is not an individual or 

who is a nonresident alien, does not have more than one 

class of stock, and which elects to be treated as an S corporation. 26 U. S. C. §§1361(a)(1), (b)(1). These eligibility requirements make it clear that pass-through taxation of S

corporations is merely an extension of the pass-through taxation of partnerships. Indeed, for most tax purposes, S corporations are equivalent to partnerships, not to corporations. “Tax practitioners often say that an S corporation is 

taxed like a partnership.” CCH S Corp. Guide ¶510, p. 505

(2013); see also West’s Tax Law Dictionary (2024) (defining 

“S Corporation” as “Corporation which elects S status and 

receives tax treatment similar to a partnership”). Taxing S

corporation shareholders on corporate income is constitutional for the same reasons as taxing partners on partnership income. To the majority, “S corporations are another

example of Congress’s authority to either tax the corporation itself on corporate income or attribute the undistributed income to the shareholders and tax the shareholders.” 

Ante, at 19. But, it does not make sense to look to S corporations for conclusions about the pass-through taxation of 

corporate shareholders generally.

Finally, the MRT is unlike other taxes on shareholders of 

closely held foreign corporations. The MRT “differs from 

other provisions of Subpart F”—the portion of the Internal 

Revenue Code dealing with controlled foreign corporations—because the MRT does not focus on “the corporation’s receipt of investment earnings while subject to the

shareholders’ control.” Brief for Petitioners 44–45. Subpart F “aligns the corporation’s earning of the money being

taxed with the shareholder’s control in the same year.” Reply Brief 23. But, “[t]he MRT by its terms takes no account 
 

 

32 MOORE v. UNITED STATES 

THOMAS, J., dissenting 

of whether a shareholder had any interest or control when

the corporation made the earnings that it attributes to her.” 

Ibid. In fact, the MRT “tags a shareholder with taxable ‘income’ even if ” he purchased shares “long after the corporation earned the sums being taxed,” and it imposes no liability on taxpayers who owned shares for years of retained 

earnings but sold them before the MRT’s trigger date. Brief 

for Petitioners 45. Subpart F includes some minimal requirements to ensure that taxable “income” belongs to the 

shareholder in some way; the MRT abandons that effort entirely.

The majority concludes that “the MRT . . . has the same 

essential features as subpart F.” Ante, at 21. But, unlike 

the rest of subpart F, the MRT has no connection at all to

any “recognition event” or “constructive receipt of income,”

and it offers no “rational basis for Congress to attribute income to a taxpayer.” S. McElroy, The Mandatory Repatriation Tax Is Unconstitutional, 36 Yale J. Reg. Bull. 69, 80–

81 (2018). The MRT turns solely on the ownership of stock 

on a certain date. That is a significant difference between

the MRT and the rest of subpart F, and one with constitutional implications.

The fact that the MRT has novel features does not mean 

that it is unconstitutional. But, the MRT is undeniably

novel when compared to older income taxes, and many of 

those differences are constitutionally relevant. Because the 

MRT is imposed merely based on ownership of shares in a 

corporation, it does not operate as a tax on income. 

C 

The majority is not ashamed to lay bare the consequentialist heart of its opinion. Because it wrongly concludes 

that the Moores’ constitutional argument would invalidate

not only the MRT but also other longstanding taxes, the 

majority frets that the Moores would “deprive the U. S. 

Government and the American people of trillions in lost tax 
 

Cite as: 602 U. S. ____ (2024) 33 

THOMAS, J., dissenting 

revenue” and “require Congress to either drastically cut

critical national programs or significantly increase [other] 

taxes.” Ante, at 21. “The Constitution does not require that 

fiscal calamity,” the majority proclaims. Ibid. I agree. But, 

if Congress invites calamity by building the tax base on constitutional quicksand, “[t]he judicial Power” afforded to this 

Court does not include the power to fashion an emergency 

escape. Art. III, §1, cl. 1. 

Even as the majority admits to reasoning from fiscal consequences, it apparently believes that a generous application of dicta will guard against unconstitutional taxes in the

future. The majority’s analysis begins with a list of nonexistent taxes that the Court does not today bless, including

a wealth tax. Ante, at 8, n. 2. And, it concludes by offering

a narrow interpretation of its own holding, hinting at limiting doctrines, prejudging future taxes, cataloguing the Government’s concessions, and reserving other questions “for

another day.” Ante, at 22–24. Sensing that upholding the 

MRT cedes additional ground to Congress, the majority

arms itself with dicta to tell Congress “no” in the future. 

But, if the Court is not willing to uphold limitations on the

taxing power in expensive cases, cheap dicta will make no 

difference. 

III 

The Court today upholds the MRT, but not because it endorses the Ninth Circuit’s erroneous view that “realization 

of income is not a constitutional requirement.” 36 F. 4th, at 

936. The majority acknowledges that the Sixteenth 

Amendment draws a distinction between income and its 

source. Ante, at 7. And, it does not dispute that realization

is what distinguishes income from property. Ante, at 8. 

Those premises are sufficient to establish that realization 

is a constitutional requirement. Sixteenth Amendment “income” is only realized income. We should not have hesitated to say so in this case. I respectfully dissent.