Supreme Court Upholds Trump-Era Tax Provision

The Supreme Court on Thursday upheld a tax on foreign income that helped finance the tax cuts President Donald J. Trump imposed in 2017 in a case that many experts had cautioned could undercut the nation’s tax system.

The vote was 7 to 2, with Justice Brett M. Kavanaugh writing the majority opinion. He was joined by Chief Justice John G. Roberts Jr., and the court’s three liberals. Justice Amy Coney Barrett wrote a concurring opinion, joined by Justice Samuel A. Alito Jr., and Justice Clarence Thomas dissented, joined by Justice Neil M. Gorsuch.

The question before the justices appeared narrow at first glance: Is the tax in question allowed under the Constitution, which gives Congress limited powers of taxation?

In the majority opinion, Justice Kavanaugh wrote that the tax fell within the authority of Congress under the Constitution.

Many tax experts had warned that striking down the tax could have wide repercussions. Such a move could have threatened to fundamentally change how income is defined, block efforts to tax billionaires’ wealth and undermine enforcement for all sorts of other taxes, which amount to billions in revenue for the government.

Among the defenders of the law was Paul Ryan, the Republican and former House speaker who helped write the legislation. Upending the tax, Mr. Ryan said, could endanger up to a third of the U.S. tax code. He joined the Biden administration and some other conservatives in seeking to keep the law intact.