The US Supreme Court case seeking to shut down wealth taxes before they even exist, has potential to end existing tax worth hundreds of billions

For most of the last century, Congress has been allowed to determine when unrealized gains are taxed, and when taxation of these gains will be delayed until after the asset is sold or the investor otherwise realizes those gains. In most cases, Congress has chosen to delay taxing appreciated assets until realization — again, this rule makes sense because it is often difficult to determine how much an asset is worth until it is sold — but the Constitution does not prevent Congress from taxing unrealized gains if it chooses to do so.

The plaintiffs in Moore, however, claim that it is unconstitutional for the federal government to tax profits before those profits are realized. This case is widely viewed as a stalking horse against Warren-style wealth taxes, as it would be impossible to tax wealth (as opposed to merely taxing the income generated by wealth) if the Constitution were to prohibit taxation of unrealized gains on the very assets that Warren-style proposals target. But a sweeping decision in favor of these plaintiffs could also endanger numerous other, existing taxes — forcing the entire government to scramble as hundreds of billions of dollars’ worth of anticipated tax revenue is suddenly declared unconstitutional.