Rejecting the majority's conclusion that the "shared responsibility payment" due from people who fail to obtain government-prescribed medical coverage qualifies as a tax, the dissenters in today's ObamaCare decision argue that it functions like a penalty, which is also what Congress chose to call it:
Our cases establish a clear line between a tax and a penalty: "'[A] tax is an enforced contribution to provide for the support of government; a penalty…is an exaction imposed by statute as punishment for an unlawful act.'"….We have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress' taxing power—even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty. When an act "adopt[s] the criteria of wrongdoing" and then imposes a monetary penalty as the "principal consequence on those who transgress its standard," it creates a regulatory penalty, not a tax….
So the question is, quite simply, whether the exaction here is imposed for violation of the law. It unquestionably is.
Notably, Chief Justice John Roberts' majority opinion concludes this exaction is not a tax under the Anti-Injunction Act, which says "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person." If that law applied to the penalty for disobeying the health insurance mandate, this case would be premature; challengers would have to wait until the penalty/tax was imposed and paid. Hence Roberts and the other justices in the majority, like the Obama administration, take a seemingly contradictory position on the tax-vs.-penalty issue, as the dissenters point out:
The Government and those who support its position on this point make the remarkable argument that §5000A is not a tax for purposes of the Anti-Injunction Act…but is a tax for constitutional purposes….Congress could have defined "tax" for purposes of that statute in such fashion as to exclude some exactions that in fact are "taxes." It might have prescribed, for example, that a particular exercise of the taxing power "shall not be regarded as a tax for purposes of the Anti-Injunction Act." But there is no such prescription here. What the Government would have us believe in these cases is that the very same textual indications that show this is not a tax under the Anti-Injunction Act show that it is a tax under the Constitution. That carries verbal wizardry too far, deep into the forbidden land of the sophists.
Previous coverage of the tax-vs.-penalty question, including the Obama administration's ever-evolving view, here.