SCOTUS is making major decisions based on outright lies
A case aiming to get rid of a wealth tax is just the latest example of justices indulging right-wing make believe.
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It’s no secret that conservatives have a massive advantage in the federal courts these days. They’ve gamed the system for years — from Sen. Mitch McConnell’s refusal to even hold a hearing on Justice Antonin Scalia’s replacement, to Trump stuffing the courts with unqualified Federalist Society types, to filing cases in districts in Texas where they are nearly guaranteed a win. But conservatives aren’t content with that, so justices and litigants have resorted to mischaracterizing or outright lying about the facts to get their preferred results.
When you look at the hard-right legal landscape as a whole, it isn’t surprising that we’ve ended up with make believe. The conservatives on the Supreme Court have already abandoned following their own precedents, tossing out 50 years of abortion rights like trash. But they’re taking a belt-and-suspenders approach by distorting or ignoring the facts before them as well.
Tomorrow, the Supreme Court will hear Moore v. United States, a Sixteenth Amendment tax case. The Sixteenth Amendment was ratified in 1909 and allowed the federal government to collect income tax at the national level. Before that, income tax was a patchwork mess, with nationwide taxes being imposed, repealed, imposed again, and thrown out by the Supreme Court. The fact that Congress can pass tax laws should be well-settled and non-controversial, but conservatives hate both taxes and the federal government, so now we’re here.
The central question in Moore is whether a “mandatory repatriation tax” passed in the Trump-era 2017 Tax Cuts and Jobs Act is constitutional. The provision imposed taxes on certain earnings by corporations held abroad, where US shareholders with more than a 10 percent share in a foreign corporation would pay a one-time tax on the corporation’s earnings. The complication is that it taxed “unrealized earnings” — money the corporation earned that has not yet been distributed to the shareholders.
You’re forgiven if all of this sounds like so much gobbledegook, because this is not a tax you’d ever run into unless you are rich. It’s what is known as a wealth tax, a tax based on someone’s net worth — all of their assets, like bank accounts, stocks, real estate, and money held in corporations overseas. Rich people are good at avoiding taxes via a wide variety of loopholes, and stashing money in foreign countries is one of them. The repatriation tax was a very modest way of trying to close a single loophole, but it would have raised $339 billion over the next 10 years.
Unsurprisingly, conservatives hated this tax. Enter Charles and Kathleen Moore, the plaintiffs in the case.
The Moore brief is basically a work of short fiction
In their brief before the Supreme Court, the Moores wove a tale of how they nobly invested in an Indian company, KisanKraft, simply because they loved the company’s vision of improving the lives of small farmers in India. They told the court they were “minority shareholders without any role in KisanKraft’s management” and therefore could not have asked the company to issue a dividend giving them income and that it was “payment enough” to support the company. So, while their legal argument is that Congress exceeded its authority to impose such a tax, their story is one of retired do-gooders simply seeking to help people in India via a relatively modest investment of $40,000. They say they were therefore blindsided by finding out they owed $15,000 in taxes.
Except their story is, to put it charitably, less than true. Last week, the Washington Post dropped a major story about how Charles Moore sat on the board of KisanKraft for five years, from 2012 to 2017, a fact the Moores neglected to mention. Moore gave the company a cash contribution of roughly $245,000 in 2014, and the company paid that back with 12 percent interest in 2015. WaPo also reported that after the Moores filed this lawsuit, Charles Moore sold around 20 percent of his holdings in KisanKraft and got nearly $300,000.
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So, the Moores aren’t really just those retired do-gooders who didn’t “realize” any gains from their investment. Instead, they’re savvy, wealthy investors who got a lot of money from KisanKraft. Additionally, their assertion they had no role in the company and therefore never had enough influence to have the company issue dividends, which would have resulted in direct income to shareholders, was a straight-up lie.
In early October, a group of wealthy people in favor of the tax wrote to the Moores’ lawyer, David Rifkin, asking that he correct the record before the Court. Rifkin is the attorney who did a fawning “interview” of Justice Samuel Alito in the Wall Street Journal when Alito was trying to get ahead of the ProPublica story about how Paul Singer, a wealthy billionaire, took Alito on a luxury Alaskan fishing trip that would have cost over $100,000 for the cost of the private plane alone.
Since that 2008 trip, Singer’s hedge fund has been before the court in 10 different cases. Of course, Alito has refused to recuse from Moore, saying that Rifkin interviewed him as a journalist, not an advocate, whatever that means.
So the Moore case has fake facts and a justice who is pals with the lead lawyer on the case, and another lawyer for the Moores made clear they have no intention of correcting the record, saying he is “confident that our filings are candid and accurate.”
Conservatives don’t want to win the Moore case only for the narrow issue of getting rid of this particular tax. A favorable and expansive ruling for the Moores, invalidating the repatriation tax and two other corporate tax provisions in the 2017 act, could reduce over $1 trillion in tax revenue over the next 10 years. A right-leaning tax think tank said that if SCOTUS rules that any type of unrealized business income tax, foreign or domestic, is unconstitutional, it would blow a hole in the federal budget to the tune of $5.7 trillion in the next decade.
If this was before a normal Supreme Court, rather than our current hyper-conservative one, this would be a major scandal, one which would, at minimum, earn the Moore lawyers an ethical complaint for failing to be truthful to the Court and, at maximum, would result in the case being thrown out. But since we have the current Court, there’s no sign this bombshell will even be an issue for conservatives at the oral argument tomorrow.
And why would it? The Court has already proved it is perfectly comfortable with litigants who lie to it and, worse still, with justices who write majority opinions that wildly mischaracterize the facts before the court.
Justices aren’t letting facts interfere with their rulings
Earlier this year, the Court decided 303 Creative v. Elenis, holding that the First Amendment prohibited Colorado, which has a broad anti-discrimination statute that protects LGBTQ people, from requiring a website designer to make a wedding website for a gay couple. The plaintiff, Lorie Smith, said in court filings that she had been contacted by “Stewart,” one half of a gay couple named Stewart and Mike, about making invites, placemats, and a website for their upcoming same-sex nuptials. Stewart sent Smith his contact information through her website, and this is what ostensibly caused Smith to take a case all the way to the Supreme Court — the mere inquiry from a gay man. Except even that never happened.
Melissa Gira Grant, a writer at the New Republic, decided to call Stewart, as his contact information was submitted to the court in Smith’s filings. Stewart was very surprised by the call, telling Grant he is straight, has been married to a woman for 15 years, and certainly didn’t ask anyone to make him a wedding website.
Grant’s article dropped one day before the Court issued its decision, so it isn’t as if the story could have influenced the justices’ opinion either way. However, Smith and her lawyers from the conservative lawsuit mill juggernaut, Alliance Defending Freedom, certainly should have known that no such terrifying request for a same-sex wedding website existed. With this, there was no “live controversy” before the Court. Courts can rule only on actual disputes between parties, not hypothetical concerns. But Smith essentially got the Supreme Court to do just that.
The fake case got a real result, though. The Supreme Court’s ruling in this case undermined America’s robust “public accommodations” laws, which generally require businesses open to the public to be open to everyone. But now, that is no longer true for LGBTQ people, as a business can simply say that they’re morally opposed to serving them. This was exactly what conservatives hoped for. In fact, the Alliance Defending Freedom had been trying this tactic for nearly a decade, going so far as to help incorporate companies to challenge state anti-discrimination laws.
The justices themselves are also not shy about mischaracterizing or omitting facts in ways that materially alter the case and allow Christian conservatives to impose their worldview on everyone else.
In 2022’s Kennedy v. Bremerton, Justice Neil Gorsuch, writing for the conservative majority, held that the First Amendment allowed Joseph Kennedy, a football coach at a public high school in Bremerton, Washington, to engage in his “personal religious observance” at football games. As with 303 Creative and Moore, this case wasn’t really about Joseph Kennedy. It was about conservatives finding a convenient plaintiff to push an agenda of forcing public schools to allow prayer.
Gorsuch was happy to help, penning an opinion about how Kennedy “lost his job as a high school football coach because he knelt at midfield after games to offer a quiet prayer of thanks” and that he offered his prayers “while his students were otherwise occupied.” But none of that is what is actually in the record. Instead, as Justice Sonia Sotomayor explained in her dissent, Kennedy had a longstanding practice of doing these prayers on the 50-yard line, inviting others to join, and leading his team in prayer on the 50-yard line as well. When the school told Kennedy to stop, he hired an attorney and did multiple media appearances announcing he would pray at the 50-yard line again after the next game. When Kennedy kneeled at midfield after the game, he was joined by the opposing coach and many of the opposing team, and, as Sotomayor notes, “members of the public rushed the field to join Kennedy, jumping fences to access the field and knocking over student band members.”
Under those facts, the case is a slam dunk — against Kennedy. Students understandably could have felt pressured to engage in this ostentatious Christian prayer with Kennedy to stay on the football team or receive playing time. Non-Christian students may have felt alienated or offended. The public could have perceived that the public school was endorsing a particular religion by allowing public Christian prayer on the football field. But the conservatives on the Court didn’t like those facts, so they ignored them so they could essentially throw out a 1971 case, Lemon v. Kurtzman, which prohibited “excessive entanglement” between the government and religion.
At their center, all of these cases are based on lies. Not minor lies, but lies that allowed the case to get to the Court and lies that allowed the Court to decide as it did. It’s just another way in which conservatives have turned the courts into a vehicle to roll back civil rights and to make the rich richer.
That’s it for today
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