What is a 'Wealth Tax,' and is it Constitutional?

This week, the Supreme Court heard arguments in a case challenging the American tax code.

For Context: The plaintiffs in Moore v. United States argued it’s unconstitutional for the federal government to tax profits that haven’t been realized. If this argument fails, it would establish precedent for a wealth tax, a tax on profits gained from investments but not yet converted into cash.

From the Left: A writer for Vox (Left bias) called the lawsuit “a preemptive strike on the very concept of wealth taxes” that, if victorious, could “blow a huge hole in the federal budget.” The writer concludes, “This is the very sort of process that should be conducted by elected officials, and not by black-robed lawyers.” A writer for Bloomberg (Lean Left bias) argued that wealth taxes are “terrible policy,” determining that a tax on unrealized gains would incentivize companies to remain private, which “deprives everyday Americans from the chance to invest in growing companies.”

From the Right: The Wall Street Journal Editorial Board (Lean Right bias) determined a ruling against the plaintiffs would “blow up the Constitution’s limits on Congress’s taxing power” and lead to a wealth tax on unrealized gains. The board argued the Supreme Court should rule in favor of the plaintiffs and “close the wealth-tax door.” A writer for the National Review (Right bias) argued a wealth tax would “impact charitable giving” and lead to “further encroachments on property rights, wealth accumulation, and even the assets of charitable foundations.”