This is the Cater Daily Podcast for Tuesday, June 25, 2004.

I'm Caleb Brown.

It's long been a wish list item for those on the left tax unrealized income.

The Supreme Court last week, while not signaling openness to it generally, hasn't closed

the door to such taxes entirely. Tommy Berry edits Cato's annual Supreme Court review.

We discuss the case. We talked about this case a while back and I think the facts really help set the stage for the broader question. This was a couple. They own stock in a

effectively a benefit corporation that helped low-income people in other countries buy farm equipment,

tools to make them more productive. It didn't seem like to me at least in our discussion initially

that these folks expected to make any money on this enterprise.

That's right it really was essentially a favor to some on this

company in India, as you say to provide tools to low income small farms.

They likely did not expect to see any profits from it and they never saw any dividends or

and it never sold their stock.

So it was quite a shock when after 2017 they got a tax bill for around $14,000.

And the tax bill was based on income of a sort.

Exactly. It was the legal. income of a sort?

Exactly.

The legal fiction that a corporation's income can be treated as its shareholders income.

And in this instance it was a tax called the mandatory repatriation tax, part of the 2017 Tax

Cuts and Jobs Act signed by President Trump.

That law made many changes and as part of the adjustments it created this one-time legal fiction

which essentially treated the income of foreign corporations going back 30 years

...