Neil Gorsuch Supreme Court Decision in Railroad Executive Stock Case Is a Sign of New Gilded Age

https://www.esquire.com/news-politics/politics/a21755073/neil-gorsuch-railroad-decision-gilded-age/

This New Gilded Age Is Very Shiny

The Supreme Court sweetens the deal for plutocrats with stock options.

Charles P. Pierce

The era of Gilded Age cosplay on the Supreme Court that began when Mitch McConnell hijacked an empty chair reached a new high point today when Justice Neil Gorsuch delivered a 5-4 majority opinion in the case of Wisconsin Central v. United States. In this decision, Gorsuch made sure that the pension benefits of railroad executives will be made safe from grubby taxation that might benefit the hoi polloi. Robert LaFollette revolves spiritedly beneath the sod.

Gorsuch did so using a technique not unfamiliar, as Scott Lemieux points out at LGM, to seventh-grade English students everywhere. The argumentum ad Funk and Wagnall.

When Congress adopted the Act in 1937, "money" was understood as currency "issued by [a] recognized authority as a medium of exchange." Pretty obviously, stock options do not fall within that definition. While stock can be bought or sold for money, it isn't usually considered a medium of exchange. Few people value goods and services in terms of stock, or buy groceries and pay rent with stock. Adding the word "remuneration" also does not alter the meaning of the phrase. When the statute speaks of taxing "any form of money remuneration," it indicates Congress wanted to tax monetary compensation in any of the many forms an employer might choose. It does not prove that Congress wanted to tax things, like stock, that are not money at all.

Those 2000 shares of Apple you have stashed in the pickle jar? Not money. Use them to light the stove.

Getty Images

This is why McConnell did what he did. This is why Merrick Garland is still working down the street. It was a strategy to cripple a Democratic president, but the most basic motivation was to install a friend of the burgeoning plutocracy on the bench for a decade or so. And Thursday's decision extends back into the past to slap FDR around a little, too. You see, the provision that all compensation could be taxed was enacted by the Department of the Treasury in 1938 as an interpretation of a law passed by a Democratically-controlled Congress a year earlier.

In his dissent, Justice Stephen Breyer pointed out that said Treasury Department probably had a better idea what said Congress had in mind than does a usurper 80 years later.

What is that interpretation? Shortly after the Act was passed, the Department of Treasury issued a regulation defining the term "compensation" in the Act as reaching both "all remuneration in money, or in something which may be used in lieu of money (scrip and merchandise orders, for example)." … The majority, though clearly fond of 1930's-era dictionaries, rejects these definitions because, in its view, they do not reflect the term's "ordinary meaning."

There were a couple other decisions on Thursday, including a fairly important one allowing state taxation of Internet sales. (There's also a concurrence in another case from Justice Anthony Kennedy that, as Ian Millhiser points out, may well contain a land mine of considerable power) But this was the signifying one—the one that I guarantee you will echo forward through other decisions. How loudly it echoes depends vitally on who gets to pick future justices, and what kind of Congress confirms them. I've already had my fill of 1881.

Respond to this post on the Esquire Politics Facebook page here.

Sent from my iPad