Obamacare

Death and Shared Responsibility Payments

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This happened while I was getting sunburned and avoiding chiggers at a state park near Dallas, so I missed it, and I don't think it's been noted here yet: Last week the Justice Department asked a federal judge to dismiss a constitutional challenge to the Patient Protection and Affordable Care Act. Responding to a lawsuit by 20 states, the Obama administration argues that "requiring individuals to buy health insurance is an exercise of Congress' taxing authority." This position is consistent with the Internal Revenue Service's role in collecting what the final version of the law (PDF) calls a "shared responsibility payment" and a "penalty" (earlier versions called it an "excise tax"). But as the National Federation of Independent Business notes, the Justice Department's argument does not quite jibe with President Obama's insistence that the individual insurance mandate "is absolutely not a tax increase." That position, in turn, was necessary as part of Obama's refusal to admit that he has broken his campaign pledge to avoid raising taxes on households earning less than $250,000 a year.

The NFIB argues that the Obama administration is trying to avoid justifying the mandate as a regulation of interstate commerce, which does indeed pose some serious logical problems, since not buying health insurance is neither interstate nor commerce and neither economic nor an activity. But the law itself cites the Commerce Clause as the rationale for the mandate, claiming "the individual responsibility requirement…is commercial and economic in nature" and "substantially affects interstate commerce."

The Justice Department may also be worried about due process issues. If the penalty isn't a tax, it would seem to be a fine, in which case the streamlined IRS collection procedure envisioned in the law may not be feasible.

The law, by the way, includes several other taxes that are explicitly identified as such but are not limited to the wealthy, including an "excise tax on high cost employer-sponsored health coverage" and an "excise tax on indoor tanning services" (which Greg Beato discussed last week). Obama presumably would explain away these levies by noting that you don't have to pay them unless you engage in the taxed activities (the reason his press secretary gave for claiming that the cigarette tax hike Obama signed should not count as a tax hike). But as I noted in a column last fall:

The fact that you can avoid a tax by changing your behavior does not mean it isn't a tax. You don't pay gasoline taxes if you don't drive, you don't pay property taxes if you don't own real estate, and you don't pay income taxes if you don't earn income.

As far as I can tell, by Obama's reasoning, there's no such thing as a tax. So perhaps we should be grateful to him for ushering in a tax-free society.

[via David Hogberg at Investor's Business Daily]

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  1. Why would anyone challenge Obamacare? He’s got a mandate, and free health care is teh awesome!

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  2. avoiding chiggers

    That is racist, straight up.

    1. “Mite-Americans” would be acceptable.

      1. No, avoiding chiggers is just fine.

        1. It’s true. Mark Twain moved from the Mississippi to San Fransisco because St. Louis was full of chiggers.

        2. Talk about the blind leading the bland…

      2. The Chigger of the “Narcissus.” It lacks the alliteration of the Joseph Conrad book title.

    2. oh chaggers, of course

    3. In my youth we called them chigroes

      1. We now prefer insect-americans

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  3. The adverse selection that occurs when healthy people opt out of insurance, or minimally insure themselves, distorts the entire health insurance market and is not bounded by state lines.

    Boy, that was easy.

    Next?

    1. Don’t feed the trolls people.

      1. But it’s all I know.

        1. …everyone should be forced to buy auto insurance, even if they can’t/don’t/won’t ever drive.

          Plus, it’s the patriotic thing to do. And Baby Jesus will cry if everyone isn’t forced to buy health insurance.

    2. The adverse selection that occurs when healthy people opt out of buying meat, or puchase lower fat meat, distorts the meat market and is not bound by state lines.

    3. The adverse selection that occurs when healthy people opt out of buying cigarettes, or puchase lower priced cigarettes, distorts the tobacco market and is not bound by state lines.

    4. The adverse selection that occurs when healthy people opt out of buying hamburgers, or puchase lower priced “value meals”, distorts the fast food market and is not bound by state lines.

    5. The adverse selection that occurs when healthy people opt out of buying beer, or puchase lower priced store brand, distorts the alcohol market and is not bound by state lines.

    6. STOP GIVING THEM IDEAS!

    7. The point you seem to have missed – Is the penalty for non-payment a tax?

      1. No, because you receive a legally mandated service for it: the ability to show up at a hospital and get treated without proof that you can actually afford it.

        1. Chad you ignorant slut.

          Your penalty for doing that is the bill you get from the hospital for the services rendered.

          Next?

        2. Yes, because I am already paying for the service through existing taxes.

        3. Using that logic, Chad, I should be able to show up at a hospital and get treated to a cart full of groceries without proof that I can actually pay for them.

          1. Wow. Chad passed up a golden opportunity to shill for his dead-end political philosophy here, but he punted the ball. What a candyass.

    8. The adverse selection that occurs when healthy people opt out of insurance, or minimally insure themselves, distorts the entire health insurance market

      Tough shit.

    9. But I am specifically prohibited from buying health insurance across state line.

  4. Would someone like to explain to me either 1) how me paying premiums to a private company is a “tax” or 2) how me not paying premiums to a private company is “interstate commerce”?

    1. You got me on 2), but on 1) if you’re forced to pay premiums to said private company when you otherwise wouldn’t (because, say, you’re young, healthy and rank other priorities higher), that’s beginning to look like a tax.

      1. Don’t taxes, by definition, have to be paid to a government, not a private corporation?

    2. See Wickard v. Filburn.

      Because you may reproduce at some point; and your offspring may someday buy an iPod, Congress has the right to regulate the number of spermatozoa in your shriveled scrotum if it so chooses.

  5. It’s only fair. You people are taxing my patience.

    1. better than taxing patients! ba-zing!

  6. If I am not mistaken, the Constitution specifically states, in the section that deals with Congress’s taxing authority, that any tax directly leveled on the states must be proportional to the state’s population. The sole exception, by way of the 16th Amendment, is the income tax. Thus, if one were to call the fine affixed to not buying health insurance a tax, then it would constitute a direct, non-proportioned tax, levied on individuals without regard to income – precisely the type of tax still prohibited by the Constitution.

    Am I wrong about this?

    1. NO, THE GOVERNMENT HAS THE POWER TO TAX FOR THE GENERAL WELFARE. HEALTH CARE IS LIKE WELFARE, THEREFORE ANY TAX SUPPORTING IT IS LEGITIMATE.

      1. I thought the General Welfare clause simply identifies what Congress can spend money on once it has acquired it. I thought it didn’t have anything to do with the limits that the Constitution otherwise sets on Congress’s authority to tax states and citizens. Am I wrong about that? Because, otherwise, if the General Welfare clause overrides any and all limitations on Congress’s taxing authority, then wouldn’t that render those limitations meaningless?

        Will check my pocket Constitution when I get home to see what it actually says on the issue.

        1. “Will check my pocket Constitution when I get home to see what it actually says on the issue.”

          Uh, why isn’t that in your pocket?

        2. I think leftists like to deliberate misinterpret this passage: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;”

          1. Whereas you’re thinking of this:

            No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

            1. So, if I am reading that correctly, the latter qualifies the former. Congress has the power to “lay and collect taxes” to provide for the “general welfare” of the nation, but, that being said, “no capitation, or other direct, tax, shall be laid, unless in proportion…”

        3. I’m not sure Aaron, lets ask the guy that wrote it:

          “With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be
          a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators… If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, everything, from the highest object of state legislation down to the most minute object of police,
          would be thrown under the power of Congress…. Were the power
          of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”
          -James Madison

          Yeah.

      2. The key word is GENERAL welfare. That word means something. You can’t just say “health care is like welfare” because you are leaving the word “general” out.

        Health care is SPECIAL welfare since it only benefits a special interest group. In this case the special interest group is “sick people”. Congress cannot tax for the welfare of sick people at the expense of healthy people.

        1. Congress cannot tax for the welfare of sick people at the expense of healthy people.

          We beg to differ disagree.

    2. Read statutes at large 38 where the original income tax was enacted in 1913, it reads more like a tax on imports and gains/income derived by such. Which makes sense if you are trying to encourage domestic production and discourage foreign imports that displace domestic employment/investment overseas. Congress already had the power to levy imposts,duties and tariffs, but not the income they produce. At the time it was known as the Underwood tariff act.

      The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. NOTICE: It may have removed apportionment, but it,s still a tax on the states not the citizens, I wonder if your state has filed its reports/return?

  7. “…since not buying health insurance is neither interstate nor commerce and neither economic nor an activity.”

    If not buying wheat on the market (and instead raising your own) “affects” interstate commerce, then surely not buying health insurance (and paying for health care costs out-of-pocket) likewise “affects” interstate commerce.

  8. “…since not buying health insurance is neither interstate nor commerce and neither economic nor an activity.”

    If not buying wheat on the market (and instead growing ones own) “affects” interstate commerce, then surely not buying health insurance (and instead paying out-of-pocket) likewise “affects” interstate commerce.

    I’m curious to see the contortions of those who support overturning HCRA on constitutional grounds, but want to keep the precedent set by Wickard.

    1. At the very least, growing wheat is an activity. Growing and selling wheat in the intrastate market is an economic activity. Where is the equivalent activity in not purchasing healthcare?

      If Wickard allowed the government to force someone to purchase wheat, I could see your point. Alas, Wickard states that intrastate economic activity that has a substantial affect on interstate commerce may be regulated under the commerce clause.

      Surely you can see distinction here.

      1. “At the very least, growing wheat is an activity. ”

        In both cases one abstains from making purchases in a market (e.g., wheat, health insurance), and compensates in other ways (e.g., grows it himself, self-treats or pays directly for healthcare services).

        “If Wickard allowed the government to force someone to purchase wheat, I could see your point. ”

        But it did! The very reason Filburn’s actions “affected” interstate commerce was that he didn’t purchase the wheat to feed his chickens from the market, but instead grew his own. He could have let his chickens die, but then you’d need to argue for suicide as the way to opt-out of Obamacare.

        1. Forgive me for not being a Con Law scholar (though I really should consider a career change, I don’t wanna rack up the debt for a JD), but it would seem to me that Fillburn’s growing of wheat would still be outlawed even if he had also bought an equivalent amount of wheat to that which he had grown. The government didnt force him to buy wheat, it prevented him from growing it. Like you said, he could have let the chickens die (or fed them something else assuming thats a dietary capability of chickens), therefore he was not ordered to purchase wheat. So I think there is a window where the court can overturn HCRA without overturning Wickard, though I would be much happier if they eliminated base law and bad case law at the same time myself.

          1. “it would seem to me that Fillburn’s growing of wheat would still be outlawed even if he had also bought an equivalent amount of wheat to that which he had grown.”

            That’s true, but only because the amount purchased from the market doesn’t undo the wheat he grows. The court made the assumption that any home-grown wheat is wheat not purchased from the market:

            But if we assume that [home-grown wheat] is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce.

            “The government didnt force him to buy wheat, it prevented him from growing it. Like you said, he could have let the chickens die (or fed them something else assuming thats a dietary capability of chickens), therefore he was not ordered to purchase wheat.”

            The problem is that the decision of the court was not so constrained:

            But even if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce…

            The question then is what counts as “activity”? That is answered in the causal chain the Court used:
            * home-grown wheat is assumed to lead to…
            * purchasing less wheat on the market has a…
            * “substantial effect in defeating and obstructing [the regulation’s] purpose to stimulate trade therein at increased prices.”

            It is the non-purchase of wheat which was the disruptive activity; the home-grown wheat was just an assumed contributor to that non-purchase. Granted that the federal cap dealt with limiting the growing of wheat, but that does not preclude Congress from passing different laws under a similar rationale. The Court then makes this pretty explicit:

            The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon.

            1. To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

              It says States, foreign Nations and Indian Tribes, not citizens of the States.

              The purpose of the “commerce clause” was to restrict the States from taxing the products of other States (or the others listed as that was the purview of the Congress through levies and excise power), not to restrict the activity of individual citizens. Under the Articles of Confedration, States were taxing each othersw products to protect their own residents. It got pretty ugly.

              Believe it or not, words actually have meanings, and by reading the auxillary writings of the Framers, it is not that difficult to determine what they meant.

              Under the “Living Constitution” concept, we no longer need to worry what the words mean. We can just redefine them as needed.

              1. To which particular choir are you preaching?

                It should go without saying that every extrapolation I make from Wickard has nothing whatsoever to do with what how I think the Commerce Clause ought to be interpreted.

              2. “levies and excise power”

                should be levies, excise and tariff

    2. Who, other than Progressive mushbrains, wants to keep the precedent set by Wickard? Wickard is one of the worst SCOTUS decisions.

      1. Drug warriors, for one. Pretty much any statist is for it, though. It’s a great loophole for government intrusion, and it plays a role in the nightly masturbation fantasies of TEAM RED and TEAM BLUE members alike.

    3. Stop clouding the issue! People MUST be forced to buy health insurance. If they don’t, they’re not patriotic.

  9. Regarding the taxation power, and the general welfare clause therein…

    Thomas Jefferson, Opinion on a National Bank, February 15, 1791:

    It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please. Certainly no such universal power was meant to be given them. It [the Constitution] was intended to lace them up straightly within the enumerated powers and those without which, as means, these powers could not be carried into effect.

    Alexander Hamilton, Federalist No. 83:

    This specification of particulars [the 18 enumerated powers of Article I, Section 8] evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended.

    James Madison, Speech in the Virginia Ratifying Convention, June 6, 1788, Elliot’s Debates:

    [T]he powers of the federal government are enumerated; it can only operate in certain cases; it has legislative powers on defined and limited objects, beyond which it cannot extend its jurisdiction.

    James Madison, Letter to Edmund Pendleton, January 21, 1792:

    If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions.

  10. They should have called it a negative tax credit.

  11. Of course we live in a tax-free society! Haven’t you heard? There are no taxes, only voluntary contributions of “revenue.”

  12. “Alexander Hamilton, Federalist No. 83:

    “This specification of particulars [the 18 enumerated powers of Article I, Section 8] evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended.'”

    I’m not a real fan of Hamilton, but he hit the nail right on the head with that one. So I have to ask, what is all this I read in Supreme Court decisions about Congress’ “Plenary” powers in this or that realm (which we see in opinions almost from the beginning of the Republic)? Was Hamilton’s explanation above merely meaningless sales-talk, to get the rubes to ratify and rally around the new Constitution?

    1. Was Hamilton’s explanation above merely meaningless sales-talk, to get the rubes to ratify and rally around the new Constitution?

      Considering that Hamilton is said to have wanted a monarchy – then yeah, pretty much probably.

  13. Did I miss something in the Obamacare bill that will allow us to buy health insurance across state lines?

  14. Did I miss something about the Heathcare bill that allows us to buy insurance across state lines?

  15. did I miss something in the bill that allows us to buy insurance across state lines?

  16. to dismiss a constitutional challenge to the Patient Protection and Affordable Care Act

    You will call it Obamacare and you will like it.

  17. I thought it was illegal to sell health insurance across state lines–that’s why we have Blue Shield Of California and all that. So how does this affect *interstate* commerce again?

  18. I love the way the government flip-flops between justifying this law on Commerce Clause and taxing authority.

    The statute itself cites the Commerce Clause as authority. When it is pointed out that the Commerce Clause can’t be stretched to regulate non-activity in a market that is, by law, intrastate, they argue that its really just a tax.

    When its pointed out that this tax doesn’t seem to fit into the Constitutional authority for direct taxes. If it is a tax, then it doesn’t really appear to be a “taxes on incomes from whatever source derived” since it is imposed without regard to income.

    If its not a tax, then its a penalty, or fine, being imposed without any apparent due process.

    Well, say the defenders, we don’t need to qualify as a tax, because we have Commerce Clause powers, unless we don’t, in which case we have taxing powers, unless we don’t, in which case . . .

    And around and around they go.

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