Abstract
The recent US Supreme Court decision in Moore vs. United States raised the possibility that the Court would declare that realization is required for a tax provision to be constitutional. The US exit tax on expatriations is the most likely vehicle for a post-Moore constitutional challenge to taxation without realization because (a) it involves individual taxpayers; (b) it does not involve attribution, because the tax is imposed directly on the expatriating taxpayer, and (c) it involves precisely the kind of tax that was the direct target of the Moore litigation, namely a mark to market tax on rich taxpayers (the kind that will happily fund such litigation). Such a case could force the Court to confront precisely the question it avoided in Moore, namely "whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states."
Disciplines
Law and Economics | Tax Law
Date of this Version
2-18-2025
Working Paper Citation
Avi-Yonah, Reuven S., "Is the US Exit Tax Constitutional?" (2025). Law & Economics Working Papers. 294.
https://repository.law.umich.edu/law_econ_current/294