Supreme Court Decision in Moore v. U.S. Harms Small Businesses with Expanded Taxing Power


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The National Federation of Independent Business (NFIB) has expressed significant disappointment with the U.S. Supreme Court’s decision in the case of Moore v. United States. This ruling upheld the Ninth Circuit’s decision, which broadened the definition of “income” under the Sixteenth Amendment to include unrealized appreciation of property. According to the NFIB, this expansion will lead to increased tax burdens on small businesses, a move they argue will have adverse financial implications.

Beth Milito, Executive Director of NFIB’s Small Business Legal Center, voiced her concerns about the decision’s impact on small business owners. “Small businesses will financially feel the consequences of this Supreme Court’s decision,” Milito stated. “By going against precedent and allowing ‘income’ to include unrealized gains, the decision will have a devastating impact on Main Street. We are disappointed in today’s ruling.”

The case revolves around the interpretation of the Sixteenth Amendment, which grants Congress the power to levy taxes on incomes, regardless of the source. Historically, “income” has been understood to mean realized gains—actual earnings from transactions such as wages, sales of goods, or capital gains from sold investments. The Supreme Court’s decision to include unrealized gains—appreciations in the value of assets that have not been sold—marks a significant departure from this precedent.

In its amicus brief filed with the Buckeye Institute, the NFIB argued two primary points. First, they contended that the Court of Appeal’s decision is erroneous and disrupts the established constitutional boundaries on federal taxation. By redefining “income” to include unrealized gains, the ruling effectively allows the federal government to tax value that has not yet been actualized or received by the taxpayer. Second, the NFIB argued that the Mandatory Repatriation Tax, which was part of the Tax Cuts and Jobs Act, should be considered severable from the rest of the legislation. This means that if the Mandatory Repatriation Tax is deemed unconstitutional, it should not invalidate the entire Tax Cuts and Jobs Act.

The broader implications of this decision concern small business owners. Many small businesses hold assets that appreciate over time, such as real estate, equipment, or intellectual property. Under this new interpretation, they could be taxed on these unrealized gains, even if they have not sold the assets or realized any cash benefit. This could create cash flow challenges, as businesses would need to find funds to pay taxes on non-liquid assets. The NFIB fears that this will place a substantial financial strain on small businesses, potentially leading to reduced investment in growth, hiring, and other critical business activities.

The NFIB’s Small Business Legal Center is dedicated to protecting the rights of small business owners in courts across the country. They are actively involved in more than 40 cases at both federal and state levels, as well as in the U.S. Supreme Court. Their involvement in Moore v. United States underscores their commitment to defending small businesses from what they view as overreaching and financially harmful governmental policies.

As small businesses already navigate the complexities of a challenging economic environment, this decision adds another layer of uncertainty and financial burden. The NFIB continues to advocate for legislative and judicial measures that support rather than hinder the small business community. They call on policymakers to consider the long-term impacts of such decisions on the backbone of the American economy—its small businesses.

The Supreme Court’s decision in Moore v. United States is poised to reshape the landscape of federal taxation. Small business owners, advocates, and legal experts will undoubtedly continue to scrutinize its implications and seek ways to mitigate its impact on the small business sector.

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Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.