Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
Allow me to add another thought to Richard's post below about the difficulty facing the Obama Administration in deciding whether to classify the individual mandate as a "tax" or a "penalty":
The Obama administration is making the argument that the penalty and much of the health care law itself arise under the Taxing and Spending power, rather than the power to regulate interstate commerce. The courts have said that the Taxing and Spending Clauses are broader in scope.
So, for example, Congress can give a tax subsidy to people who have more children, even though Congress cannot regulate the size of families directly through the Commerce Clause (though give Justice Breyer some time, he might still get the Court there). In court, the administration is arguing that it is merely taxing people who do not buy a health insurance plan $750 -- this seems not to be true, because it is not for the purpose of raising revenue and is not taken into account for budgetary purposes; rather, it seems to be a financial penalty/sanction.
Parking fines and speeding tickets are not taxes, they are penalties. If the Obama Administration were to be believed, then Congress could simply convert all regulation into financial penalties and essentially escape the limits on Congress's powers -- a line that I believe the courts will not allow the federal government to cross. Saying in public that the penalty is not a tax undermines their argument in court (in fact, the trial court in Florida used similar public statements to find that the penalty was not within the taxing power).
- Comment (8)
- · Quote
- · UnfollowFollow (1)
Comments:
Jan '11
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
[edited for Code of Conduct]
Edited on February 17, 2012 at 3:47pmJun '10
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
[edited]
Edited on February 17, 2012 at 3:48pmMay '10
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
I've used this argument to minimize the Bad of Romneycare. The argument makes sense on the state level, but doesn't work on the federal level given the Constitution. However it does work to diminish the psychological impact of the Obamacare mandate. The thing is, the mandate is not the worst part of Obamacare. It's maybe one of about ten layers of Bad.
Jan '11
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
I am not sure that the public comments of Administration officials will influence SCOTUS, but their biggest problem is the plain language of the statute that calls it a "penalty".
Feb '12
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
First I must say that reading the posts on Ricochet about Obamacare and the constitutional arguments on either side has been a great review for my Con Law class! I am curious though, why has Article 1 Section 7's requirement that all Bill for raising revenue must originate in the house not been a part of any discussions about the constitutionality of Obamacare? The focus is on either the tax and spend power or the commerce clause, both of which have, as Prof. Epstein has laid out, been grossly expanded flowing the New Deal. Even if the administration's position that the penalty is a "tax" is allowed it seems that they have a problem with Article 1 section 7, as the Bill passed was the Senate Bill. Based on my neophyte level of understanding Constitutional Law this seems to be a stronger argument against the law's validity, in that it implicates the political process. Precisely because of the political process - the election of Sen Brown - Congress bypassed the Constitutional structure to pass the Bill. Why has this not come up or what am I missing?
Edited on February 17, 2012 at 5:01pmJan '11
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
@UVA Law Vet - you raise a fair point, but one that hasn't been necessary in the arguments so far. For the best disposition (quite powerful, IMHO) on the tax vs. penalty issue read Paul Clement's brief to the the 11th Circuit (pages 43-46).
http://aca-litigation.wikispaces.com/file/view/States%27+brief+%2805.04.11%29.pdf
Jan '11
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
Apr '11
Re: Another Thought on Obamacare's "Tax"/"Penalty" Dilemma
John,
Richard says: " Call this a tax and it has to go through certain Congressional committees"
Since the bill is passed, what does this mean?