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An Activist Decision Setting New Boundaries for Federal Power
I stand by my initial reaction: the decision is a travesty. Roberts had it within his power to strike down the entire monstrosity, and he opted not to. Although the Right will be energized, he has handed Obama a political “win” (yes, a win that might end up as a curse, but for today, right now, this is a win).
Taking all that as read, what now are the limits of federal power?
On the good news front, the Court struck down (for the first time) a scheme of conditional federal grants as being unduly coercive against the states — that would be ACA’s Medicaid expansion, which threatened to pull the plug on all Medicaid dollars for states that don’t march in lockstep with the feds.
Also good — very good — is the fact that the Court rejected the Administration’s two primary arguments: that the individual mandate is justified under the Commerce Clause and the Necessary and Proper Clause. So now we know: Congress cannot use its regulatory power to compel activity. There must be some preexisting activity (and it has to be of an “economic” nature) for Congress to be able to regulate. (Peter: Roberts agreed with the dissenters re: the commerce power).
But then the bad — very bad — news: Roberts accepted the validity of the mandate as a “tax” imposed to promote the “general welfare.” As a matter of original meaning, this conclusion is incoherent. Everything we know about the original understanding of the text tells us that it was not meant to authorize Congress to use its taxing power to achieve ends that it could not do under its enumerated powers. Unfortunately, however, that conclusion is supported by precedent going back to the 1937 Helvering v. Davis case. It is the Hamiltonian view of “general welfare.” I don’t buy it, but it was not likely that the Court was going to revive the Madisonian (correct) view of general welfare at this date.
So: Congress cannot compel you to enter into commerce, but it can tax you if you refuse to enter into commerce. What are the limits to this doctrine? As far as I can tell they are:
- The tax cannot be so high that people have no choice but to purchase health insurance [or whatever product or service Congress decides to mandate next];
- Congress cannot attach any other “negative legal consequences” to the failure to engage in commerce; e.g., Congress cannot impose criminal or civil penalties for failing to buy health insurance.
- The tax must be imposed regardless of intent, thus, Congress can’t impose a tax only on those who “intentionally refuse to buy health insurance.”
- The tax must be collected in the same manner as other taxes, ie, via the IRS.
The dangerous part of his decision is not that he expanded the scope of the “taxing power” (as I explain above, existing precedents already did that) but that he greatly expanded the Court’s power to reclassify a regulatory measure as a “tax.” Roberts relies on the principle that if courts are faced with differing interpretations of a law, they should choose the interpretation that upholds the law. But that assumes that the competing interpretations are plausible. Here, Congress was absolutely crystal clear in categorizing the “shared responsibility payment” as a “penalty,” i.e., a means to enforce a regulatory command, and not a tax. The President who signed the law emphatically denied it was a tax (see Mollie’s post).
A Court re-writing a statute to achieve a certain result is the very definition of judicial acitivism. For the Court to rewrite a law so as to impose a tax is doubly disturbing. As the dissenters say: “Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry.”
Published in General
“Congress cannot attach any other “negative legal consequences” to the failure to engage in commerce; e.g., Congress cannot impose criminal or civil penalties for failing to buy health insurance.
The IRS can enforce it’s collection efforts by the US Marshall’s office. You will now be compelled to comply with the mandate at the point of a gun. Sorry Adam, but you underestimate the power of the feral government and the ruthlessness of a tyrant.
Hello and welcome to social security.
Boy, I understand and agree with the Federalist principles we all embrace. But when was the last time the Court consulted legislative deliberation records rather than the effect of the provision to characterize intent? As I said on Peter’s thread, “If it looks like a tax, walks like a tax, is collected like a tax, and quacks like a tax, it is a cute ducky little tax even if you pretend it isn’t.”
I still say that we screwed this one up in 1991. We had our chance then.
In Ontario, we are required to pay a $200 a year health tax. There is no way out of it.
I think I’ll start campaigning for ObamaCare to be adopted in Ontario. If I buy private health insurance I should get a $200 tax credit.
This idea would be denounced as right-wing extremism up here, since private insurance is illegal.
Did we just witness Roberts’ first case of “growing” on the bench after being nominated by a Republican?
Riddle me this, John Roberts: am I correct that the federal government could enact the following?
1. “All citizens shall eat 3 pounds of broccoli per month. All citizens failing to do so in a particular month shall pay the Internal Revenue Service $50.”
2. “No house shall be built in the United States in excess of 2,500 square feet. Anyone who shall build a house in the United States in excess of 2,500 square feet shall pay the IRS $100,000.”
3. “No automobile shall be sold in the United States if it does not meet fuel economy standards set by regulations issued by the Secretary of Transportations, which regulations shall require all automobiles meet fuel economy standards of no less than 75 miles per gallon of gasoline. Anyone buying an automobile that fails to meet these fuel economy standards shall pay the IRS $15,000.”
James Taranto: “If it is correct that Roberts was acting as a finger-to-the-wind politician, he may find that what he thought was the wind was really the hot breath of Linda Greenhouse.”Liberals reserve the right to hate this Roberts decision if it fires up conservatives and leads to severe Democratic losses in the fall. Then they will say he reinforced a right-wing view of the Commerce Clause while defusing the one issue that had a chance of uniting Democrats going into the election.
1. “All citizens shall eat 3 pounds of broccoli per month. All citizens failing to do so in a particular month shall pay the Internal Revenue Service $50.”
1. Does Congress have the authority to impose a monthly $50 tax on all Americans? I think it does.
2. Does Congress have the authority to offer a $50 tax credit to any American that eats 3 pounds of broccoli in a month? I think it does.
If Congress has the authority to enact these measures separately, then it follows that it has the authority to enact these measures together.
Adam, perhaps it’s because I like Roberts and I have seen how he has crafitly attempted to create strong majorities in as many cases as he could, I think this may be a very crafty way to get to the same ends by a more broadreaching means: He has put a limit on the Commerce Clause. He has said Congress cannot hide a tax by calling it something else and using the Commerce clause as its source. People don’t like taxes.
Next, by saying this is revenue generating legislation that means it must have originated in the House under Art. 1 Sec. 7. Did it? If not and the ACA began life in the Senate, an easy slam dunk constitutional challenge awaits…
The dangerous part of his decision is not that he expanded the scope of the “taxing power” (as I explain above, existing precedents already did that) but that he greatly expanded the Court’s powerto reclassify a regulatory measure as a “tax.”
If Roberts’ biggest overreach was defining a fee collected by the IRS as a tax (which the Obama administration only called a penalty for political reasons), I’d say point: Roberts.
As several people on Ricochet have repeatedly pointed out, the penalty was a tax in all but name. Since when is calling a spade a spade judicial activism?
1. “All citizens shall eat 3 pounds of broccoli per month. All citizens failing to do so in a particular month shall pay the Internal Revenue Service $50.”
2. “No house shall be built in the United States in excess of 2,500 square feet. Anyone who shall build a house in the United States in excess of 2,500 square feet shall pay the IRS $100,000.”
3. “No automobile shall be sold in the United States if it does not meet fuel economy standards set by regulations issued by the Secretary of Transportations, which regulations shall require all automobiles meet fuel economy standards of no less than 75 miles per gallon of gasoline. Anyone buying an automobile that fails to meet these fuel economy standards shall pay the IRS $15,000.” ·3 hours ago
This is precluded by the rest of Roberts’ rationale. The penalties are too burdensome by any definition. Sorry, all this keening and overreaction makes no sense.
Obamacare destroys the profit potential of medical insurance, thereby making the industry unviable except as a government entitlement program. How many health insurance companies will go under or abandon the industry before Republicans can acquire the seats and the votes to repeal the bill and its consequent administrative powers?
We also must consider all of the physicians who are retiring early or changing industries. Then there are the young people choosing not to attend medical school because of this. Even if Obamacare is repealed, will such people be confident that they needn’t worry about whatever replacement healthcare legislation Republicans are pressured into immediately after?
Legislative repeal must be our goal now, while the other judicial challenges are pending. But a lot of lasting damage is likely to occur in the next couple years, regardless. ·4 hours ago
Do you seriously believe that people will not go to medical school now because of this decision? I have an Arctic island in Jamaica for sale cheap.
1. “All citizens shall eat 3 pounds of broccoli per month. All citizens failing to do so in a particular month shall pay the Internal Revenue Service $50.”
1. Does Congress have the authority to impose a monthly $50 tax on all Americans? I think it does.
2. Does Congress have the authority to offer a $50 tax credit to any American that eats 3 pounds of broccoli in a month? I think it does.
If Congress has the authority to enact these measures separately, then it follows that it has the authority to enact these measures together. ·20 hours ago
It is illogical in the extreme for Congress to lack the power to compel the purchase of insurance but have the power to tax its non-purchase. Either it has the power to compel something, or it doesn’t.
Could Congress impose a requirement that all citizens join the Episcopal Church? Assuming the answer is no, could Congress get around this limit on its power by taxing those who don’t join? If not, why not?
Could Congress impose a requirement that all citizens join the Episcopal Church? Assuming the answer is no, could Congress get around this limit on its power by taxing those who don’t join? If not, why not?
There is nothing in the Constitution that forbids Congress from passing a head tax, i.e. a tax for simply existing.
Therefore, Congress can pass a head tax on every American, and then pass an equivalent tax credit for engaging in an activity that Congress thinks is beneficial.
However, the specific tax credit in question would also have to be allowed under the Constitution.
A tax credit for joining the Episcopal Church would violate the Establishment Clause, so no dice.
However, there is nothing in the Constitution that forbids a tax credit for buying health insurance.
There is nothing in the Constitution that forbids Congress from passing a head tax, i.e. a tax for simply existing.
Therefore, Congress can pass a head tax on every American, and then pass an equivalent tax credit for engaging in an activity that Congress thinks is beneficial.
However, the specific tax credit in question would also have to be allowed under the Constitution.
A tax credit for joining the Episcopal Church would violate the Establishment Clause, so no dice.
However, there is nothing in the Constitution that forbids a tax credit for buying health insurance. ·53 minutes ago
I think there is something in the constitution that forbids a tax credit for buying health insurance: the 10th amendment.
If, per Roberts decision, Congress has no power to compel the purchase of health insurance, the issue of whether one must buy health insurance is left to the states. That Congress has been overstepping its power, and intruding into the states’ police powers, for years does not make it any more constitutional from a doctrinal point of view.
(continued)
If, per Roberts decision, Congress has no power to compel the purchase of health insurance, the issue of whether one must buy health insurance is left to the states. That Congress has been overstepping its power, and intruding into the states’ police powers, for years does not make it any more constitutional from a doctrinal point of view.
Offering a tax credit is not the same thing as compelling behaviour.
Congress cannot compel you to have children. It can offer a tax credit for every child you have.
The 10th Amendment doesn’t apply because tax credits are covered by the taxing power. If it forbade tax credits, that would mean that Congress can raise taxes but only States can cut taxes.
The solution is to pass a constitutional amendment forbidding tax credits for selective behaviour. Make it so Congress can raise taxes or reduce taxes, but cannot give some people a tax break for “good behaviour”. That means ending child tax credits, employment tax credits, education tax credits, etc.
Unfortunately, according to the Supreme Court’s logic, it would also outlaw fines for criminal activity, since a fine is merely a “tax” on failing to obey the law.
I also think that there is a difference between a tax credit for activity and a tax for non-activity.
Suppose A is living just at the far end of his means, and being ordered to pay $1,000 more of taxes (in lieu of buying $10,000 worth of health insurance he can’t afford and doesn’t believe he needs) will cause him harm (eg., can’t pay rent, must drop out of school) that is much different than having to forego the opportunity to get a credit for $1,000 by purchasing $10,000 worth of solar panels, which he can’t afford and doesn’t need. In both cases the government wants to encourage a decision, but in the former case their approach is punitive, causing great harm, and in the latter case their approach provides merely an opportunity foregone, and that makes a huge difference both to A’s ability to live within his means and to the constitution.
Although, to be honest, I think the tax credit for solar panels is also unconstitutional, but that’s an argument for another day.
Do you seriously believe that people will not go to medical school now because of this decision?
It’s not a theory. Some of the doctors my relative plays tennis with have advised their children not to pursue medical school.
Only because of yesterday’s decision? No. Because they see the writing on the wall. Even Republican politicians are talking about what healthcare legislation they will pass after Obamacare is repealed, if it is. The regulatory future of medical care is uncertain, but more regulation is a safe bet.
There is a difference, sure, but they’re still both legal under the Constitution.
After all, head taxes are perfectly legal under the Constitution. Head taxes are a tax on nothing.
Offering a tax credit for behaviour one finds beneficial is not the same thing as compelling that behaviour.
Congress cannot compel you to have children, but it can offer a tax credit for every child you have.
The 10th Amendment doesn’t apply because tax credits are covered by the taxing power. If the 10th Amendment forbade tax credits, that would mean that Congress can raise taxes but only States can cut taxes. ·9 minutes ago
Edited 6 minutes ago
Where we disagree, I think, is the extent of the federal taxing power. It exists for a reason, to raise revenue for the federal government, not to accomplish unconstitutional goals through other means. Such an approach puts all the states’ police powers into the federal purview, and we can kiss limited government good-bye. I fail to see how this is the system of government that we want, or that the founders intended.
There is a difference, sure, but they’re still both legal under the Constitution.
After all, head taxes are perfectly legal under the Constitution. Head taxes are a tax on nothing. ·2 minutes ago
Per Roberts, this tax is not a direct tax. Just as the income tax was not constitutional under the original constitution, neither is the health care tax, as it (unlike the head tax) is not mentioned therein.
Offering a tax credit for behaviour one finds beneficial is not the same thing as compelling that behaviour.
Congress cannot compel you to have children, but it can offer a tax credit for every child you have.
The 10th Amendment doesn’t apply because tax credits are covered by the taxing power. If the 10th Amendment forbade tax credits, that would mean that Congress can raise taxes but only States can cut taxes. ·9 minutes ago
Edited 6 minutes ago
Where we disagree, I think, is the extent of the federal taxing power. It exists for a reason, to raise revenue for the federal government, not to accomplish unconstitutional goals through other means. Such an approach puts all the states’ police powers into the federal purview, and we can kiss limited government good-bye. I fail to see how this is the system of government that we want, or that the founders intended. ·5 minutes ago
I never said it’s a sysem we want, or that the founders intended. I’m arguing that’s what the Constitution actually says.
There is a difference, sure, but they’re still both legal under the Constitution.
After all, head taxes are perfectly legal under the Constitution. Head taxes are a tax on nothing. ·2 minutes ago
Per Roberts, this tax is not a direct tax. Just as the income tax was not constitutional under the original constitution, neither is the health care tax, as it (unlike the head tax) is not mentioned therein. ·4 minutes ago
I argue that the health care tax is nothing more than a head tax. It’s a tax on every single american, and one can get an equivalent tax credit by purchasing health insurance.
As I said in LowountryJoe’s thread, when Republicans are able to repeal Obamacare legislatively is almost as important as if they are able to.
Obamacare destroys the profit potential of medical insurance, thereby making the industry unviable except as a government entitlement program. How many health insurance companies will go under or abandon the industry before Republicans can acquire the seats and the votes to repeal the bill and its consequent administrative powers?
We also must consider all of the physicians who are retiring early or changing industries. Then there are the young people choosing not to attend medical school because of this. Even if Obamacare is repealed, will such people be confident that they needn’t worry about whatever replacement healthcare legislation Republicans are pressured into immediately after?
Legislative repeal must be our goal now, while the other judicial challenges are pending. But a lot of lasting damage is likely to occur in the next couple years, regardless.
Excellent analysis, Adam. At least, though, we have a ruling that the thing is a tax. I’ve found other cases in which burdens on individual rights have been analyzed as though they were a tax — here, we have the SCT saying it is a tax, so we don’t have act as though it were a tax.
We won on every other point but whether it is a tax; we even won on the AIA question, even though it is a tax (labels matter for the AIA, labels don’t matter thereafter). We lost on the “it’s a tax” question, now we need to litigate the question of whether it’s a tax that infringes on our right to medical privacy.
Ironically, I received an email from the Montpelier Foundation today noting that James Madison, Father of the Constitution, died on this date in 1836.
I’m wrong.
Article I of the Constitution does forbid a head tax.
As such, I now believe that Justice Roberts erred. Congress cannot impose a fixed tax on all Americans. In order for the mandate to be legal, the penalty has to be proportionate to the individual’s income.
One could also argue that if fines are merely taxes on failure to obey the law, fines must also be proportionate to the individual’s income.