Billionaires vs. the United States

We’ve seen the quid. Here comes the quo pro. How the Supreme Court could use an upcoming case to supplant Congress’s role in writing tax law, enriching their billionaire benefactors for years to come.

This article originally appeared on The Tax Decode Substack, November 29, 2023

On December 5, the Supreme Court will hear oral arguments in Moore v. United States, a case that threatens Congress’s ability to fairly tax the ultra-wealthy and the businesses they own when they use sophisticated accounting and investment tricks to disguise their real income. 

At first glance, the case is about a seemingly arcane legal debate related to a one-time “transition” tax on offshore corporate profits included in the 2017 Trump-GOP tax law. Also called the “mandatory repatriation tax” (MRT), the measure was actually a big tax discount for multinational corporations relative to the pre-2017 rules. 

Not surprisingly, few taxpayers subject to the MRT objected, especially in light of the Trump-GOP tax law’s other huge tax breaks, which included a 14-point cut in the corporate tax rate and equally significant tax cuts for wealthy individuals. But in 2018, a Washington state couple, Charles and Kathleen Moore—who are closely connected to the conservative Competitive Enterprise Institute (CEI) and a web of other right-wing think tanks—filed suit over the tax.

When the Court agreed to hear their case—one of the just 80 or so cases it chooses to hear each term out of the 7,000-8,000 cases it’s asked to consider—legal experts were baffled. As Politico noted, “why [the justices] selected this one is a mystery. There isn’t a split opinion among lower courts, something that often prompts the high court to intervene, and the tax was a one-time levy that didn’t affect very many taxpayers. And the couple's tax bill is not large, at least not compared with the cost of bringing a case before the Supreme Court.” 

But in fact, there’s a lot at stake in Moore—at least for the billionaires who have been showering conservative Supreme Court justices with cash and gifts and who stand to profit handsomely if the Court unleashes chaos in the tax code.

Moore Chaos Would Be a Boon for the Billionaires Buying the Court

The plaintiffs in Moore—and the far-right billionaire-funded pressure groups behind them—claim that under the 16th Amendment, Congress cannot tax investment gains until they are realized. But more than a dozen long-standing taxes do just that (in accordance with decades of jurisprudence) in order to address the ways that sophisticated investors and big corporations can use accounting and investment maneuvers to disguise the totality of their income. A decision in favor of the Moores would potentially upend all those existing taxes.

Even former GOP House Speaker Paul Ryan, a chief architect of the 2017 Trump tax cuts, has warned the Court against siding with the couple: “I’m not for a wealth tax, but I think if you use this as the argument to spike a wealth tax, you’re going to basically get rid of, I don’t know, a third of the [tax] code.” 

Long-time tax counsel for the House GOP, George Callas agreed: “Major, long-standing, and mostly uncontroversial parts of the tax code could be declared unconstitutional. The federal income tax could become largely voluntary for multinational corporations and sophisticated investors, and mandatory only for everyday Americans. [emphasis mine]” Meanwhile, the conservative Tax Foundation recently concluded that a sweeping decision could cost almost $6 trillion in lost revenue. 

In their reckless zeal to block the mere idea of a future possible wealth tax, the conservatives behind the case risk throwing decades of established tax law into chaos, requiring the Court to hear one tax case after another for years to come as long-standing provisions are challenged. In fact, that’s exactly what happened over a century ago in Eisner v. Macomber, the last time the Court decided in favor of the robber barons on unrealized gains: “The constitutional aspect of the decision necessitated an activist Court in the tax field that took years to wane. It also created confusion for years in many aspects of income tax law.”

That could be a miserable slog for the justices themselves, and for the American people who would suffer the consequences. But for the billionaires who’ve been buying up Supreme Court justices like they’re private islands, ensuring that the conservative 6-3 majority on the Court supplants Congress’s Constitutional role as tax policymaker would be a feature, not a bug.

The Billionaires Who Bought Supreme Court Justices Are Poised for a Big ROI

At least two Supreme Court justices—Clarence Thomas and Samuel Alito—have spent years accepting lavish gifts and big cash payments from a small group of billionaires, allowing the justices and their families to enjoy luxury that they could never have afforded on their own: all-expenses paid travel on super yachts and private jets, opulent vacations, secret all-male retreats, swanky box suites at sporting events, major home renovations and property purchases, and even private school tuition for a close family member. 

Thomas alone has received “at least 38 destination vacations, 26 private jet flights, six helicopter flights, yacht voyages (including to the Bahamas), a dozen VIP passes to sporting events, and much, much more” from billionaires including Harlan Crow, David Sokol, Wayne Huizenga, and Paul Novelly.

That doesn’t include the sizable cash transfers to Thomas’s wife, Ginni, that billionaires have funneled through various non-profits in coordination with Federalist Society Board Chair Leonard Leo. 

And that’s just what we know about thus far.

All of this personal enrichment came from billionaires with financial interests before the Court. And almost none of this largesse was disclosed to the public, in clear violation of the law. In the case of secret payments to Thomas’s wife, the instructions were explicit: “No mention of Ginni, of course.”

Nor did the conflicted justices recuse themselves from cases where their billionaire patrons stood to gain financially. Alito, for example, used his position on the Court to help ensure that Paul Singer—the billionaire hedge fund manager paying for Alito’s luxury lifestyle—won his case, ultimately leading to $2.4 billion payment to Singer’s company.

This isn’t just a case of powerful politicians hobnobbing with rich friends. It’s evidence that at least two Supreme Court justices are lawlessly abusing their positions of public trust for their own personal enrichment. At what point can we call it bribery?

Meanwhile, a third conservative justice—Neil Gorsuch—owes every phase of his judicial career to one special patron, oil and gas billionaire turned media mogul and tax cheat Philip Anschutz. Starting when Gorsuch was in his 30s, Anschutz helped the young lawyer jump ahead of more qualified candidates then under consideration by the George W. Bush Administration to land a seat on the Tenth Circuit. The young Gorsuch hadn’t even been on the Bush team’s radar—and had never been a judge—but within days of receiving Anschutz’s letter, he was their pick. Throughout his time on the Tenth Circuit, Gorsuch maintained his close ties with Anschutz, according to the New York Times, participating as “a semiregular speaker at the mogul’s annual dove-hunting retreats for the wealthy and politically prominent at his 60-square-mile Eagles Nest Ranch.”

A decade later, Anschutz funded the drive by the GOP-controlled Senate to refuse to seat Merrick Garland on the Supreme Court in 2016, then pushed Gorsuch to the top of Trump’s nominee list, ensuring that Gorsuch took the Garland seat in 2017. When Anschutz lost his $94.3 million tax evasion case to the IRS in 2011 on appeal, he didn’t have a wholly owned Supreme Court justice in his pocket. But what a difference a few years can make.

But that’s not all. The more we’ve learned about this case, the dirtier it’s gotten. Thanks to investigative reporting by TaxNotes and other outlets, we know now that the Moores’ case is based on a series of factual errors—or in layman’s terms, lies. Nonprofit watchdogs, including Americans for Tax Fairness, have called on the Court to dismiss the case and let the lower court’s ruling stand. As Patriotic Millionaires noted in their open letter to the Court:

[W]hen the … controversies are concocted, when the factual background and legal arguments presented to you are known to have been disingenuous, when those behind the effort to place the controversy before you are closely connected with several of you, and when the public’s confidence in the integrity of the Court already stands at an all-time low, propriety and precedent dictate that you show the utmost restraint by dismissing the case.

If the Court’s conservative majority sides with the plaintiffs in Moore, despite the myriad problems with the case, multiple conflicts of interest, and potential threats to huge swaths of our tax code, the public will have little choice but to conclude that the same billionaires showering Justices Alito and Thomas with gifts, property, and cash, and propelling Justice Gorsuch onto the Court, are the ones calling the shots. 

News outlets have revealed the extensive quid that is billionaires buying the Supreme Court’s conservative justices. The chaos that Moore could unleash could well be part of the pro quo.