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Supreme Court Upholds 2017 GOP Tax on Foreign Profits in 7-2 Ruling

Jun 20, 2024, 02:14 PM

The U.S. Supreme Court has upheld a 2017 tax on American-owned businesses' foreign profits, rejecting a challenge backed by business and anti-regulatory interests. The decision, issued on Thursday, was a 7-2 ruling with Justice Kavanaugh writing for the majority. The tax, known as the Mandatory Repatriation Tax, attributes the realized and undistributed income of an American-controlled foreign corporation to the entity’s American shareholders and taxes them on their portions of that income. Justices Gorsuch and Thomas dissented. The ruling, which could have saved companies hundreds of billions of dollars, upholds a key provision of the GOP reform package and asserts that the tax does not exceed Congress’s constitutional authority. This decision comes at a time when some Democratic lawmakers are seeking to impose a wealth tax on the super-rich.