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Supreme Court upholds a tax on foreign income over a business-backed challenge

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Supreme Court upholds a tax on foreign income over a business-backed challenge
News

News

Supreme Court upholds a tax on foreign income over a business-backed challenge

2024-06-20 22:46 Last Updated At:22:50

WASHINGTON (AP) — The Supreme Court on Thursday upheld a tax on foreign income over a challenge backed by business and anti-regulatory interests, declining their invitation to weigh in on a broader, never-enacted tax on wealth.

The justices, by a 7-2 vote, left in place a provision of a 2017 tax law that is expected to generate $340 billion, mainly from the foreign subsidiaries of domestic corporations that parked money abroad to shield it from U.S. taxes.

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The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

WASHINGTON (AP) — The Supreme Court on Thursday upheld a tax on foreign income over a challenge backed by business and anti-regulatory interests, declining their invitation to weigh in on a broader, never-enacted tax on wealth.

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs at the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs at the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

The law, passed by a Republican Congress and signed by then-President Donald Trump, includes a provision that applies to companies that are owned by Americans but do their business in foreign countries. It imposes a one-time tax on investors’ shares of profits that have not been passed along to them, to offset other tax benefits.

But the larger significance of the ruling is what it didn't do. The case attracted outsize attention because some groups allied with the Washington couple who brought the case argued that the challenged provision is similar to a wealth tax, which would apply not to the incomes of the very richest Americans but to their assets, like stock holdings, that now get taxed only when they are sold.

Justice Brett Kavanaugh wrote in his majority opinion that “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.”

The court ruled in the case of Charles and Kathleen Moore, of Redmond, Washington. They challenged a $15,000 tax bill based on Charles Moore’s investment in an Indian company, arguing that the tax violates the 16th Amendment. Ratified in 1913, the amendment allows the federal government to impose an income tax on Americans. Moore said in a sworn statement that he never received any money from the company, KisanKraft Machine Tools Private Ltd.

A ruling for the Moores could have called into question other provisions of the tax code and threatened losses to the U.S. Treasury of several trillion dollars, the Biden administration told the court.

The case also had kicked up ethical concerns and raised questions about the story the Moores’ lawyers told in court filings. Justice Samuel Alito rejected calls from Senate Democrats to step away from the case because of his ties to David Rivkin, a lawyer who is representing the Moores.

Public documents show that Charles Moore’s involvement with the company, including serving as a director for five years, is far more extensive than court filings indicate.

The case is Moore v. U.S., 22-800.

Follow the AP's coverage of the U.S. Supreme Court at https://apnews.com/hub/us-supreme-court.

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

The U.S Supreme Court is seen on Friday, June 14, 2024, in Washington. (AP Photo/Mariam Zuhaib)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs at the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs at the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana)

MILWAUKEE (AP) — Donald Trump takes the stage Thursday at the Republican National Convention to accept his party's nomination again and give his first speech since he was cut off mid-sentence by a flurry of gunfire in an assassination attempt at a rally in Pennsylvania.

Trump's address will conclude the four-day convention in Milwaukee. He appeared each of the first three days with a white bandage on his ear, covering a wound he sustained in the Saturday shooting.

His moment of survival has shaped the week, even as convention organizers insisted they would continue with their program as planned less than 48 hours after the shooting. Speakers and delegates have repeatedly chanted “Fight, fight, fight!” in homage to Trump's words as he got to his feet and pumped his fist after Secret Service agents killed the gunman. And some of his supporters have started sporting their own makeshift bandages on the convention floor.

Speakers attributed Trump's survival to divine intervention and paid tribute to victim Corey Comperatore, who died after shielding his wife and daughter from gunfire at the rally.

“Instead of a day of celebration, this could have been a day of heartache and mourning,” Trump’s vice presidential pick, Ohio Sen. JD Vance, said in his speech to the convention on Wednesday.

In his first prime-time speech since becoming the nominee for vice president, Vance spoke of growing up poor in Kentucky and Ohio, his mother addicted to drugs and his father absent, and of how he later joined the military and went on to the highest levels of U.S. politics.

Donald Trump Jr. spoke movingly Wednesday about his father’s bravery, saying he showed “for all the world” that “the next American president has the heart of a lion.” But he toggled back and forth between talking about his father as a symbol of national unity and slamming his enemies.

“When he stood up with blood on his face and the flag at his back the world saw a spirit that could never be broken,” Trump Jr. said.

The convention has tried to give voice to the fear and frustration of conservatives while also trying to promote the former president as a symbol of hope for all voters.

The convention has showcased a Republican Party reshaped by Trump since he shocked the GOP establishment and won the hearts of the party's grassroots on his way to the party's 2016 nomination. Rivals Trump has vanquished — including Sens. Ted Cruz of Texas and Marco Rubio of Florida, former U.N. Ambassador Nikki Haley and Florida Gov. Ron DeSantis — put aside their past criticisms and gave him their unqualified support.

Even Vance, Trump's pick to carry his movement into the next generation, was once a fierce critic who suggested in a private message since made public that Trump could be “America's Hitler.”

Trump has not spoken in public since the shooting, though he's given interviews off camera. But he referenced it during a private fundraiser on Wednesday, according to a clip of his remarks recorded on a cellphone and obtained by PBS News.

“I got lucky,” he said. “God was with me.”

Follow the AP's coverage of the 2024 election at https://apnews.com/hub/election-2024.

Donald Trump Jr., arrives to speak on third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Donald Trump Jr., arrives to speak on third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Donald J. Trump Jr. speaks during the Republican National Convention on Wednesday, July 17, 2024, in Milwaukee. (AP Photo/J. Scott Applewhite)

Donald J. Trump Jr. speaks during the Republican National Convention on Wednesday, July 17, 2024, in Milwaukee. (AP Photo/J. Scott Applewhite)

Vice Presidential Nominee Sen. JD Vance speaks during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Paul Sancya)

Vice Presidential Nominee Sen. JD Vance speaks during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Paul Sancya)

Vice Presidential Nominee Sen. JD Vance waves during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Julia Nikhinson)

Vice Presidential Nominee Sen. JD Vance waves during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Julia Nikhinson)

Republican presidential candidate former President Donald Trump prepares to depart after the third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Republican presidential candidate former President Donald Trump prepares to depart after the third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Republican presidential candidate former President Donald Trump arrives on third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Republican presidential candidate former President Donald Trump arrives on third day of the Republican National Convention at the Fiserv Forum, Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Evan Vucci)

Republican presidential candidate former President Donald Trump watches during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Charles Rex Arbogast)

Republican presidential candidate former President Donald Trump watches during the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Charles Rex Arbogast)

Republican presidential candidate former President Donald Trump gestures as he arrives at the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Paul Sancya)

Republican presidential candidate former President Donald Trump gestures as he arrives at the Republican National Convention Wednesday, July 17, 2024, in Milwaukee. (AP Photo/Paul Sancya)

Republican presidential candidate former President Donald Trump on stage during his walk-through on the third day of the Republican National Convention on Wednesday, July 17, 2024, in Milwaukee. (AP Photo/J. Scott Applewhite)

Republican presidential candidate former President Donald Trump on stage during his walk-through on the third day of the Republican National Convention on Wednesday, July 17, 2024, in Milwaukee. (AP Photo/J. Scott Applewhite)

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