(Note: A version of this episode originally ran in 2019.) In 1794, George Washington decided to raise money for the federal government by taxing the rich. He did it by putting a tax on horse-drawn carriages. The carriage tax could be considered the first federal wealth tax of the United States. It led to a huge fight over the power to tax in the U.S. Constitution, a fight that continues today. Listen back to our 2019 episode: "Could A Wealth Tax Work?" Listen to The Indicator's 2023 episode: "Could SCOTUS outlaw wealth taxes?" This episode was hosted by Greg Rosalsky and Bryant Urstadt. It was originally produced by Nick Fountain and Liza Yeager, with help from Sarah Gonzalez. Today's update was produced by Willa Rubin and edited by Molly Messick and our executive producer, Alex Goldmark. Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney. Learn more about sponsor message choices: podcastchoices.com/adchoices NPR Privacy Policy
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I wish I hadn't become a liar, you know, early in life.
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There is a kind of tax that a lot of people have imagined and dreamed of really for years now, a wealth tax, a way to tax people not just on what they earn, but on what they own, houses, stocks, Picassos, superyachts, thoroughbred horses, whatever.
Supporters of this idea tend to be pretty progressive, and they say a wealth tax would be this powerful way of fighting inequality.
But the legality of a wealth tax that has been in question for a long time.
And this term, the Supreme Court had a chance to weigh in the case that gave him that chance.
It's called Moore versus the United States.
So the Moores are an american couple named Charles and Kathleen Moore.
And in the mid two thousands, they invested in this business in India that provides equipment to low income farmers.
Over time, this business grew.
It made profits, and the profits got reinvested in the company.
Now, usually when that happens, the company's investors, they can defer taxes on those profits if they're made outside the US.
But in 2017, Congress passed a new law that said for foreign corporations, Americans like the Moores would have to pay a one time tax on those profits, even if the profits never actually reached their own pockets.
The Moors argued they were being taxed on what investors call unrealized gains, where the money is there on paper, but it's still invested and not yet turned into cash.
In other words, its not income.
Its like basically wealth.