Federal

Territorial Tax Rules Would Remain Intact Even if Insular Cases Are Struck Down, Report Finds

As debate grows over the future of the Insular Cases, long-criticized Supreme Court decisions that shaped the constitutional relationship between the United States and its territories, a key question has resurfaced: Would overturning these cases lead to the imposition of federal income taxes across the territories? According to a legal analysis released by Right to Democracy, the answer is no. Despite widespread calls for the U.S. Supreme Court to finally strike down the Insular Cases—opinions rooted in openly racist views that denied full constitutional protections to millions of U.S. citizens living in territories—the report argues that Congress already has broad authority to set tax policy in the territories and that this authority is independent of the Insular Cases​. The report, titled Overruling the Insular Cases: What About Federal Taxes?, explains that the current system of differential taxation between U.S. states and territories would remain intact even if the Insular Cases...