Is ObamaCare's 'Shared Responsibility Payment' a Tax or a Penalty? Yes, SCOTUS Says.


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.

NEXT: South Florida Tea Party Head: Regardless of SCOTUS Ruling, "I will not comply with ObamaCare"

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  1. The Government was invited, at oral argument, to
    suggest what federal controls over private conduct (other
    than those explicitly prohibited by the Bill of Rights or
    other constitutional controls) could not be justified as
    necessary and proper for the carrying out of a general
    regulatory scheme. See Tr. of Oral Arg. 27?30, 43?45
    (Mar. 27, 2012). It was unable to name any.

    Goodbye to liberty.

    1. Liberty has been dead for a long time.

      This is just an act of necrophilia.

    1. Go. The. Fuck. Away. benji.

  2. Why isn’t Ronald Bailey writing this post?

  3. the biggest irony in this is how all the lefty pundits were whining just yesterday how a 5-4 ruling would be akin to a threat to the republic. Wonder if they feel that way now.

    The ruling also confirms a long-standing axiom involving conservatives/Republicans: never, ever underestimate their ability to step on their own dicks. Rarely, if ever, do you see a Dem cross over and vote with the right, but the reverse happens with some frequency.

    1. So if the right and left vote together, that’s the right crossing over, but not the left?

      Is life really that asymetrical to you?

  4. If the scotus Nazgul ruling wasn’t bad enough, you yinzers are gonna have to deal with this bit of idiocy.

  5. Fuck that statist cocksucker Roberts.

    1. He’s much worse than the dread pirate Roberts.

  6. So they ruled that the Feds can’t penalize the states for refusing the Medicaid mandate but can impose a tax for people who refuse the individual mandate.

  7. It looks more and more like Roberts was looking for anything to not be the Chief Justice that overturned such a “momentous” law. What a coward.

  8. The road to hell is paved with good indentions, and the road is lit brightly with the wisdom of the Chief Justice.

  9. Is ObamaCare’s ‘Shared Responsibility Payment’ a Tax or a Penalty? Yes, SCOTUS Says.

    Try new Shimmer.

    It’s a dessert topping.

    No. It’s a floor wax.

    It’s a dessert topping and a floorwax!

  10. That “shared responsibility payment” thing is what bugs me the most. He said that one limit for the taxing power is that the mandate tax doesn’t ever cost more than insurance. So if it’s shared responsibility payment, does that mean the taxes are levied to pay for coverage of uninsured? I don’t see anything else in the opinion that really links the pen…I mean, tax, to the cost of insurance. But if it did, you’re just substituting one form of insurance for another. Instead of private insurers, the government taxes you and insures you in return. So that whole “not forcing you to buy insurance” is functionally just forcing you to go private or public. It’s a choice based on source, not activity. In fact, wasn’t that one of the points, that even if you don’t have insurance it’s as if you do since you can’t be refused care?

    Also, this just goes to show how ridiculous taxes really are. While scotus said that taxation is a functional test, any idiot can see that this is a penalty, with little to do with raising revenue.

    1. *”Limit” is the wrong word. It’s one consideration.

  11. Does anyone else think Roberts looks like he’s drunk in that picture?

    1. More like on “bath salts”…

      1. +1

  12. IOW it’s a tax for purposes of constitutionality but not a tax as far as the Anti-Injuction Act is concerned? Why don’t they just cut the pretense and admit that they’re making shit up as they go along? Seems like they pretty much twisted and contorted their logic specifically to find some way of upholding the law while simultaneously avoiding having to deal with any consideration of commerce clause precedent.

    IOW they’re a bunch of spineless power-mongering pussies no different from the other two branches of government. Bunch of assholes.

    1. You got my thinking too. You have to go back to the Slaughterhouse cases to find such incredibly gifted gymnastics.

      My boss says “originalist” and the like are all wrong. They are “consequentialists”, the lot of them, but Roberts more than the rest in this decision.

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