Supreme Court Examines Tax Dispute and Government's Power to Tax Unrealized Income

The US Supreme Court justices expressed hesitation in overturning a tax on Americans' investments in certain foreign corporations, as they considered the definition of "income" in a case that could impact efforts to impose a wealth tax on the wealthy. The case involves a retired couple challenging the tax on foreign company earnings that have not been distributed to shareholders. The justices questioned whether the tax on unrealized gains is allowed under the Constitution's 16th Amendment. Some justices signaled support for upholding the tax by attributing the income earned by the foreign company to its shareholders. A ruling is expected by June and could have implications for other tax provisions and legislative proposals for a wealth tax.