2018-62
18-457
North Carolina Department of Revenue, Petitioner v. The Kimberley Rice Kaestner 1992 Family Trust

Summary Analysis

R-62
DATE: 2019-06-21
DOCKET: 18-457
NAME: North Carolina Department of Revenue, Petitioner v. The Kimberley Rice Kaestner 1992 Family Trust
WORTHY: False

OPINION: Court
   AUTHOR: Sotomayor
   JOINING: Thomas, Ginsburg, Breyer, Kagan, Kavanaugh
   GOOD: No
PAGES: 16

OPINION: Concurring
   AUTHOR: Alito
   JOINING: Roberts, Gorsuch
   GOOD: No
PAGES: 4


Case Commentary

All the Justices agree, making it all the easier for me to disagree.



If I were to set up a Tax Code from scratch, I would pass through all earnings from every Legal Entity (Trust Fund, Corporation, Partnership, Non Profit, etc.) to the owners of said Entity every year and Tax it as Regular Income.

Brett's Tax Code

• Logarithmically Progressive
• Up to 10^x at this Tax Rate.
• Up to 10^y at this Tax Rate.
• No Deductions
• None
• It's on Income
• Raw Income
• Every penny that passes through one's hands
• Fictional Constructs Pass Through
• Corporate Tax is paid by Shareholders, as if the Gross Receipts of their share of the Corporation were Personal Income
• 100% Tax OK
• I'm OK with 100% Tax for up to 10^z in Income.
• I'm OK with 200% Tax for up to 10^z' in Income.

This case concerns a Trust. And per the above, I am OK with passing 100% of the Trust Income through as Taxable Income.



Please keep in mind, there are very few reasons for creating a Trust.

• Tax Dodge
• Ownership Denial
• Fools and Their Money

I see no great interest being served by honouring any of these motivations.



You know, as long as I am talking about Taxes. I am becoming increasingly convinced that Labour should not be Taxed at all and that Capital should bear the total brunt of All Taxation Efforts.

Though, I say that and immediately reconsider. Let the National Average of Income from Labour pass through Tax Free and the remainder be taxed at Capital Rates.

Thus (using the same logic as previously), Up to National Labour Income Average of Labour Income to be at a Zero Percent Tax Rate. And then, carry on as before from there.



Here are some quotes for you (with the internal quotation marks omitted).

The Due Process Clause limits States to imposing only taxes that bear fiscal relation to protection, opportunities, and benefits given by the state.

That boundary turns on the simple but controlling question... whether the state has given anything for which it can ask in return.

Given the above, I would ask what benefit a person born today (or living in a State today, but a different one yesterday) derives from paying off bonds (or paying pension benefits) for services rendered before they were born (or before they were residing in the State)?



If I were a Lawyer (which I am not), I would be preparing my Class Action Lawsuit even as we speak.

But then, if I were a Lawyer, I might know better... about a whole host of things... you know, if I only had a brain.



Note: along with my revised Tax Code, I would prohibit all State and Local Governments from taking on debt, insisting that all services be paid for at the time they were rendered.

I would give an exclusion to the Federal Government, because debt is a wonderful Foreign Policy Tool.



Here's a bit of trivia for you.

Trust income nationally exceeded $120 billion in 2014.

Perhaps more on point (to the case at hand, about which this page is putatively concerned), I disagree with The Court's analysis that Kaestner does not control the Assets in her Trust.

I am willing to bet the Trust Agency's entire business model revolves around... um, Trust. That in the end, the clients get what they want.

And Kaestner got what she wanted (so much so) that upon termination of this Trust, she created a new one... something that no rational person who did not ultimately feel like they had control over the Assets in said Trust would ever do.