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Supreme Court Upholds Trump-Era Foreign Earnings TAX
On Thursday, the US Supreme Court upheld an obscure tax established as part of Trump’s big 2017 reform package that targets U.S. taxpayers who own shares in certain foreign firms.
The Supreme Court concluded 7-2 that the so-called mandatory repatriation tax, or MRT, is constitutional under Article I and the 16th Amendment, rejecting a lawsuit by a Washington couple, Charles and Kathleen Moore, who claimed the provision violated the Constitution. Justice Brett Kavanaugh authored the majority opinion. Justices Clarence Thomas and Neil Gorsuch dissented.
The Supreme Court’s decision was narrow, but by declining to overturn the tax, the justices avoided closing the door on Democrats’ proposals to levy taxes on the nation’s richest earnings. Kavanaugh emphasized that the court’s analysis ignores the difficulties created by holdings, wealth, or net worth taxes, as well as appreciation taxes.
“Those are potential issues for another day, and we do not address or resolve any of those issues here,” the Supreme Court judge’s counsel wrote. “In the Moores’ instance, Congress has long taxed an entity’s shareholders on its undistributed revenue, as it did with the MRT. This Court has long sustained such taxes, and we continue to do so with the MRT.
The high court opinion is also expected to allay fears about the impact of a sweeping decision rejecting the required repatriation tax on other elements of the tax legislation. Kavanaugh acknowledged the potential repercussions of such a finding, stating that if the Moores’ argument is adopted, “vast swaths” of the Internal Revenue Code may be declared unconstitutional.
“And those tax provisions, if suddenly eliminated, would deprive the U. S. government and the American people of trillions in lost tax revenue,” he wrote on behalf of the coalition. “The logical ramifications of the Moores’ thesis would thus oblige Congress to either dramatically slash important national programs or significantly increase taxes on the remaining sources available to it—including, of course, ordinary Americans. The Constitution does not need such a fiscal disaster.”
Dan Greenberg, general counsel of the Competitive Enterprise Institute, which represented the Moores, expressed disappointment with the verdict, which allows the government to collect income taxes on overseas stockholders who have never earned income.
“We think that is unfair, because the Constitution authorizes Congress to tax people on their income, not the income of foreign businesses that they do not control,” according to a press release.
Supreme Court Moore v. U.S.
The tax at the center of the case, known as Moore v. U.S., is imposed one time on U.S. taxpayers who hold shares of certain foreign corporations. The Moores challenged the measure after they were hit with a nearly $15,000 tax bill for 2017 as a result of the law, which required them to pay levies on their share of reinvested lifetime earnings from an India-based company called KisanKraft Tools.
The Moores had invested $40,000 in the company in 2006 in exchange for a 13% stake, and did not receive any distributions, dividends or other payments from it.
But the mandatory repatriation tax, enacted through the Tax Cut and Jobs Act that was signed into law by former President Donald Trump, taxed U.S. taxpayers who owned at least 10% of a foreign company on their proportionate share of that company’s earnings after 1986. The tax was projected to generate roughly $340 billion in revenue over 10 years.
Though KisanKraft reinvested its earnings in the years after its founding, rather than distributing dividends to shareholders, the tax still applied to the Moores.
The Moores paid, but filed a lawsuit against the federal government to obtain a refund and challenge the constitutionality of the mandatory repatriation tax.
A federal district court ruled for the government and dismissed the case, finding that the mandatory repatriation tax is permitted under the 16th Amendment, which grants Congress the authority to tax “incomes, from whatever source derived.”
The U.S. Court of Appeals for the 9th Circuit upheld the lower court’s decision, ruling that nothing in the Constitution prohibits Congress from “attributing a corporation’s income pro-rata to its shareholders.” The 9th Circuit noted that courts have consistently upheld other similar taxes, and warned that finding the measure unconstitutional would call into question many other long-standing tax provisions.
The Supreme Court affirmed the 9th Circuit’s ruling and found that by 1938, its precedents had established a rule that contradicted the Moores’ argument in their case. That line of prior decisions, Kavanaugh wrote for the court, “remains good law to this day.”
Citing those earlier rulings and the similarities between the mandatory repatriation tax and other tax provisions, the court concluded that the measure “falls squarely within Congress’s constitutional authority to tax.”
Justice Amy Coney Barrett issued a concurring opinion, joined by Justice Samuel Alito, in which she agreed with the outcome of the case, but split with the majority’s reasoning. Addressing the question that was before the court, Barrett said that the 16th Amendment does not authorize Congress to tax unrealized sums without apportionment to the states.
In a dissenting opinion joined by Gorsuch, Thomas said the Moores were correct in challenging the mandatory repatriation tax as unconstitutional. Because the couple never actually received gains from their investment, those unrealized gains couldn’t be taxed as income under the 16th Amendment, he wrote.
“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,” he wrote. “Because the MRT is imposed merely based on ownership of shares in a corporation, it does not operate as a tax on income.”
Thomas criticized the majority over its concerns about the impact a broad decision would have on other longstanding taxes, writing that “if Congress invites calamity by building the tax base on constitutional quicksand, ‘the judicial power’ afforded to this court does not include the power to fashion an emergency escape.”
He also rebuffed the majority’s contention that its ruling does not speak to the constitutionality of other taxes that may be passed by Congress, such as a wealth tax.
“Sensing that upholding the MRT cedes additional ground to Congress, the majority arms itself with dicta to tell Congress ‘no’ in the future,” Thomas wrote. “But, if the court is not willing to uphold limitations on the taxing power in expensive cases, cheap dicta will make no difference.”
During oral arguments in December, the justices seemed sympathetic to concerns about how a sweeping ruling would reverberate across the U.S. tax system and threaten existing tax laws.
But some of the justices sought clarity on the limits of Congress’ taxing power. Lawyers for the Moores had warned the court that allowing a tax on income that has not yet been realized, or received, would pave the way for lawmakers to levy taxes on all manner of things, such as retirement accounts or gains in the value of real estate.
Justice Samuel Alito had faced pressure from some congressional Democrats to recuse himself from the case because of interviews he participated in with an editor at the Wall Street Journal and David Rivkin, a lawyer who represented the Moores.
The justice declined to step aside from the case, arguing there was “no valid reason” for him to do so.
Source: CBS News
On Thursday, Patrick Bertoletti a 39-yearold Chicago native chocked down 58 hotdogs in 10-minutes to win his men’s title at the annual Nathan’s Famous Fourth of July hot dog eating contest. While reigning champion Miki Sudo set a new world record of 51 hotdogs to win her tenth victory in the women’s tournament.
The current men’s champion, Joey “Jaws” Chestnut, who has won 16 of the last 17 events, opted not to attend this years Nathan’s Famous Fourth of July event due to a disagreement with his sponsor. Instead he competed later in the day against four soldiers at a U.S. Army base in El Paso, Texas, where he wolfed down 57 hot dogs in five minutes, AP reported.
The 39-year-old Chicagoan Bertoletti beat out thirteen international rivals in a close 10-minute race in which the lead changed hands multiple times. He claimed to have trained for the event for three months with “an urgency” and shed pounds in the belief that he could win.
According to Bertoletti, “I knew I had a shot” when Joey was not present. “I found a way to open something, but I have no idea what it was.”
At the annual Independence Day festival on New York’s Coney Island, a beachside attraction featuring amusement parks and summer atmosphere, Bertoletti shattered his previous record of 55 hot dogs in 10 minutes.
Miki Sudo – Getty Images
New World Record Set
Earlier, in the women’s division, 38-year-old Florida dental hygiene student Sudo maintained her dominant performance and set a new record, following her successful consumption of 39 1/2 hot dogs in 2023.
“I’m just happy to call this mine for another year,” Sudo remarked after winning the pink belt.
Mayoi Ebihara of Japan, a 28-year-old participant, finished second after devouring 37 hot dogs, but Sudo still managed to overcome 13 of her rivals. She finished in second place in 2023 as well.
In the men’s division, Sudo consumed more hot dogs than her competitor, Nicholas Wehry, a former Florida bodybuilder. Wehry ate 46 hot dogs. This is the first time since 2015 that the prestigious mustard belt has not gone to Chestnut; Bertoletti does it.
Every year, thousands of people gather outside the original Nathan’s on Coney Island for the event, with some donning foam hot dog hats. Even without Chestnut, the event drew a large crowd, according to Rich Shea, CEO of Major League Eating, who organized the gathering.
According to him, the well-known eating champion is “just a great competitor, a great guy, a grown man, and a man who’s made a choice not to be here today” (ESPN). Tens of thousands of people are swarming around Nathan’s Famous, which is quite lucky for us. It’s an annual journey. You won’t find a paid Hollywood crew here.
Contestants from around the world
With hopefuls from Brazil, Japan, the UK, South Korea, Australia, and the Czech Republic among the more than a dozen states and five continents competing for the prestigious title and $10,000 reward money, the event was truly global in scope.
Chewing his way to victory last year, Chestnut of Indiana devoured 62 dogs and buns in under 10 minutes. He set the record in 2021 with 76.
An earlier decision to not invite Chestnut stemmed from his sponsorship arrangement with plant-based meat alternative company Impossible Foods, which ran ads on ESPN during Thursday’s event.
Chestnut chose to celebrate the holiday with the military despite Major League Eating’s subsequent statement that it rescinded the prohibition. If the Coney Island contest did not accept his apologies, Chestnut threatened to withdraw from it.
Joey “Jaws” Chestnut – Getty Images
Joey “Jaws” Chestnut downs 57 hotdogs
An Army base, which is not easily accessible by the public, was the site of the El Paso incident. Despite this, a few hundred Chestnut supporters turned out, with some donning hotdogs costumes and one sporting a “Let Joey eat” T-shirt. Out of the four men from Fort Bliss, who consumed a total of 49, Chestnut managed to consume 57 hotdogs.
Chestnut had voiced his concern before the show that he would struggle to perform without the enthusiastic backing of the Coney Island audience. However, he later claimed to have achieved a “record-setting pace.”
Speaking to the Fort Bliss crowd, Chestnut expressed his admiration for them after paying tribute to his family’s military service: his father, grandfather, and brother. “You all gave me a tremendous push, and I’m really grateful.”
Despite the non-inclusion of Impossible Foods’ vegan products in the competition, the company served as event sponsor. Along with Chestnut and officials from the charity Operation Homefront, who assist military families, company CEO Peter McGuinness made an appearance on stage. He gave the group a check for $106,000, or $1,000 for every hot dog consumed.
Source: The Associated Press
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A woman from Oakville Ontario say she totally freaked out after she found a black widow spider in a bag of grapes that her husband bought from Walmart a day earlier.
Ginette Guidi told CTV News that she suspected something was wrong with her grapes when she noticed webs all over them, and eventually traced them back to the venomous spider that was crawling across the bag.
While finding a black widow spider in Canada is uncommon, there is one species that migrated into British Columbia and another into southern Ontario according to the Canadian Food Inspection Agency.
The CFIA reports that pests — including black widow spiders, scorpions, and iron cross blister beetles — have been found in imported grapes, berries, and leafy green vegetables.
Black widow spiders are distinctive due to their shiny round body, brown or black colour, and two reddish or yellowish triangles forming an hourglass on the underside of their abdomen.
Black Widow Spiders Rare in Ontario
The venomous spiders live in most warm regions of the eastern and central U.S., North American deserts, and southern Canada. While they are rarely found in imported grapes, the presence of the arachnids does not damage or poison the grapes.
“When grapes are harvested, they are carefully examined before being placed into their packaging; however, some spiders may camouflage with the grape vines and escape being found,” the agency says.
“Refrigeration of the product prior to being transported reduces the spiders’ activity, making them harder to detect.”
The black widow spider is not normally aggressive but may bite in self-defence. In most cases, the symptoms following a bite are a sharp pain followed by localized swelling and redness. Thankfully, in Guidi’s case, no one was injured or bitten by the spider.
Unfortunately, this isn’t the first time a shopper in Ontario has found a black widow spider in their produce.
Other pesky incidences
Back in October 2023, a customer discovered the hair-raising creature in a pack of green grapes from President’s Choice, although the original poster did not clarify which supermarket chain the grapes were purchased from.
In another case the month prior, a shopper found a dead scorpion in a pack of raspberries from Metro. The creepy critter appeared to be a striped bark scorpion, which is common throughout the U.S. and Mexico where the raspberries came from.
If you find any of these pests in your food, the Canadian Food Inspection Agency recommends reporting it to confirm the species. After reporting it, the agency says black widow spiders, scorpions, or blister beetles should be “promptly” killed and carefully disposed of, ensuring that a barrier (such as a glove or a fly swatter) is used between the insect and your skin.
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NBC is bringing a version of legendary sportscaster Al Michaels back to the Olympics this summer, but with an unexpected twist: his voice will be powered by artificial intelligence.
On Wednesday, NBC said that it will utilize AI software to reproduce Michaels’ voice to offer daily Summer Games summaries to users of its Peacock streaming platform. This marks a significant milestone in the application of AI by a major media firm.
NBC | CTV Image
NBC To Use AI Version Of Announcer Al Michaels’ Voice For Olympics Recaps
The employment of an artificial intelligence voice for the Olympics comes at a time when technology has advanced dramatically, particularly in its ability to generate images, sounds, and text. This has sparked concerns in creative industries, such as journalism, regarding how artificial intelligence may—or should—be utilized.
A new tool, “Your Daily Olympic Recap on Peacock,” will allow subscribers to create 10-minute highlights packages incorporating event updates, athlete back stories, and other related content based on their preferences.
The company stated that the highlights could be packaged in approximately 7 million distinct ways, based on 5,000 hours of live coverage in Paris, thereby making AI (artificial intelligence, not the guy) a far more efficient way to give individualized summaries.
“When I was approached about this, I was skeptical but obviously curious,” Michaels stated in a press statement. “Then I saw a demonstration of what they had in mind. I replied, ‘I’m in.'”
An NBC representative told CNN that Michaels is being rewarded for his participation.
A veteran broadcaster, Michaels is now the play-by-play sportscaster for Thursday Night Football on Amazon Prime. He is well noted for his work on earlier Olympic Games broadcasts for NBC and ABC and for announcing the Miracle on Ice Game at the 1980 Winter Olympics in Lake Placid, New York.
NBC | Fox Image
NBC To Use AI Version Of Announcer Al Michaels’ Voice For Olympics Recaps
NBC stated that the AI system was trained using previous NBC broadcast audio from Michaels.
The business stated that a team of NBC Sports editors will evaluate all of the content, including audio and footage, to ensure that it is factually correct and that names are pronounced correctly.
Beginning July 27, the highlights tool will be available on Peacock in web browsers and iOS and iPad apps.
SOURCE – CNN
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