Was Replacing a Boundless Commerce Clause With a Boundless Tax Power a Stroke of Genius?
An editorial in today's Wall Street Journal rejects the view that Chief Justice John Roberts' majority opinion in National Federation of Business v. Sebelius shows him to be "a chessmaster, a statesman, a Burkean minimalist, a battle-loser but war-winner, a Daniel Webster for our times." Roberts instead looks like a politician, the Journal argues:
His ruling, with its multiple contradictions and inconsistencies, reads if it were written by someone affronted by the government's core constitutional claims but who wanted to uphold the law anyway to avoid political blowback and thus found a pretext for doing so in the taxing power.
If this understanding is correct, then Chief Justice Roberts behaved like a politician, which is more corrosive to the rule of law and the Court's legitimacy than any abuse it would have taken from a ruling that President Obama disliked. The irony is that the Chief Justice's cheering section is praising his political skills, not his reasoning. Judges are not supposed to invent political compromises.
"It is not our job," the Chief Justice writes, "to protect the people from the consequences of their political choices." But the Court's most important role is to protect liberty when the political branches exceed the Constitution's bounds, not to bless their excesses in the interests of political or personal expediency or both. On one of the most consequential cases he will ever hear, Chief Justice Roberts failed this most basic responsibility.
The Journal accurately charges Roberts with "rewriting the plain text of a law" so he could uphold the individual health insurance mandate as an exercise of the tax power, converting the "penalty" that the Patient Protection and Affordable Care Act imposes on anyone who "fails to comply" with the "requirement to maintain minimum essential coverage" into a revenue-raising levy. Even if Congress had explicitly framed the mandate as a tax, the Journal says, that would not resolve the question of whether the policy amounts to an unconstitutional "direct tax."
The Journal notes that the tax power endorsed by Roberts is no less sweeping and dangerous to liberty than the Commerce Clause argument he rejected. "From now on," it says, "Congress can simply regulate interstate commerce by imposing 'taxes' whenever someone does or does not do something contrary to its desires." Worse, as I pointed out last week, the tax trick allows Congress to dispense with claims about interstate commerce altogether. As long as a mandate is disguised as a tax (and as long as it does not violate explicit limits on federal power such as those listed in the Bill of Rights), "because we said so" is reason enough.
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No, it wasn't a stroke of genius. The votes were there to limit the commerce power whether or not Obamacare stood. Hell, Kennedy angrily read the dissent from the bench.
The only circles within which Obamacare was popular are DC assholes and NYT readers' drum circles. The politically genius move would be to invite the crisis of legitimacy that Obama and the media threatened, allowing them to demonstrate the bubble they live in.
"From now on," it says, "Congress can simply regulate interstate commerce by imposing 'taxes' whenever someone does or does not do something contrary to its desires."
Politicians have always used the Tax Code to give back some of the money they've taken from taxpayers based on which favorable hoops the citizens have jumped through. This is just another form of that, albeit less palatable to voters.
Actually no it is not becasue of one very important distinction.
Previously they had to raise taxes on everyone and then give back a portion to those who engaged in the favored behavior. This does not do that, it applies a new direct tax for failing to engage in the preferred behavior.
While the law certainly have been rewritten such that it followed the established (and obviously constitutional paradigm) neither the law as written nor as rewritten by Justice Roberts meets it and as a resuly a constitutionally troubling direct tax has now been ruled Constitutional.
It's even worse: Congress doesn't even have to call the tax a "tax".
The jackasses in Congress can call such forced exaction a "penalty" and avoid, or at least rebuff, criticism for "raising taxes". The SC essentially ruled that, if the IRS collects the penalty, it's a tax even if it's not a tax. Or something like that; anyway, it sucks.
I don't understand how it is different. They levy the "penalty" on everyone and then let everyone with health insurance "deduct" that penalty. It is NO different than any other tax.
Except that they didn't raise everyone's taxes, now did they.
The only brake on Congress using this new power (thanks Robbie) is political. And the general public is to stupid to understand a nuanced argument like they raised everybody's tax and gave almost everybody an offsetting credit.
The difference under the old system is that they had to raise EVERYONE's income taxes by some percentage and then attempt to offset that with the tax credit. See income taxes are obviously Constitutional thanks to the 16th amendment. However direct taxes are not and never have been held so previously.
While the net effect is the same (people who don't have approved health coverage pay more in taxes) it is politically MUCH more difficult to pass a general tax increase and then try to offset it with targeted rebates meaning Congress has a MUCH harder time passing such laws.
For example, lets say that Obama wins reelection, continues doing what he's been doing and in 4 years leaves office less popular than Carter was and we end up with President Santorum and Republican supermajorities in both houses. With this new Precident they can effectively outlaw Abortion without overturning Roe v Wade by applying an abortion tax (either on the Dr or the patient) of some ridiculously high number (say $50,000 per abortion) and the courts could not overturn it. Under the old system they would have to raise everyones taxes and then give a "not getting an abortion" credit somehow and that would never get through the legislative process.
Although I get your point, your example is inaccurate. According to Supreme Court jurisprudence, the Constitution prohibits Congress from restricting Abortion. Therefore, as an "enumerated restriction" on Government's power, Congress wouldn't be allowed to tax you as a penalty for that behavior.
Likewise, an attempt to "tax" people who engage in free speech or freedom to assemble would likewise be limited.
What is sad is that we used to say our government is limited to its enumerated powers (i.e. only those powers granted by the Constitution), but this ruling basically says that the Taxing authority gives the government power to do anything EXCEPT that which is restricted in the Bill of Rights. That a supposed "Conservative" justice allowed such a reading is a sad turn of events for this nation.
But they are not restricting abortion, they are merely attempting to raise revenue by taxing it and hell I can write the constitutional rationalizations right now off the top of my head but even they are unnecessary because as of Thursday there are no constitutional limits to what Congress can tax.
Here's what really happened:
The "boundless" Commerce Clause was not limited at all in NFIB. Dissents are not binding precedent, by definition. Nobody joined Roberts the part of Roberts' opinion on the Commerce Clause, so it doesn't make a binding precedent either. Sum it all up, and no precedent was made on the Commerce Clause.
Now, the taxing authority was broadened, because the distinction between penalties (which previously could not be imposed under the taxing authority) and taxes has been, well, weakened, allowing the taxing authority to cover (some?) penalties as well as taxes.
On net, NFIB weakened limited government, for now. Only if a future court adopts the reasoning of the dissent will we be able to say that it revived limits on government.
And the odds of that happening are slim, because the case strengthened the precedent that the Court should be as slavishly deferential to Congress as humanly possible. You can rest assured that Congress will follow the roadmap of imposing its penalties "virtual" taxes. Penaltaxes, if you will.
This. How anyone can look at this as anything other than an utter disaser is beyond me.
Yes. Roberts thinks that this decision is going to make liberals more accepting of future decisions limiting government because they are so lavishly praising this one. What he doesn't understand is that this case will make liberals less accepting because as you correctly point out the standard is now that courts rewrite the law or do anything to ensure the will of the Congress is respected. We know now that he originally voted to strike down the whole law. So clearly he knows what the right answer is. He just lacked the wisdom and moral courage to do the right thing. My God what a cowardly fool.
Roberts thinks that this decision is going to make liberals more accepting of future decisions limiting government because they are so lavishly praising this one.
Or maybe he's a punk ass bitch coward that took (what he thought was) the path of least resistance.
That is what he is. I am just telling you the rationalization he told himself.
"Dissents are not binding precedent, by definition. Nobody joined Roberts the part of Roberts' opinion on the Commerce Clause, so it doesn't make a binding precedent either."
Roberts' wrote the court's opinion, not the dissent.
Roberts wrote an opinion, only certain parts of which were the opinion of the Court. To quote from the his opinion:
CHIEF JUSTICE ROBERTS announced the judgment of theC ourt and delivered the opinion of the Court with respect to Parts I, II, and III?C, an opinion with respect to Part IV, in which JUSTICE BREYER and JUSTICE KAGAN join, and an opinion with respect to Parts III?A, III?B, and III?D.
His Commerce Clause discussion is in Parts III?A, III?B, and III?D, in which no other Justice joined, and which is correctly termed "an opinion", not "the opinion of the Court."
The opinion of the Court is limited to Parts I, II, and III?C. Part I is introductory. Part II is on the Anti-Injunction Act. Part III-C is on how the taxing authority saves the law.
No one agreed with his limits on the CC. It's dicta, or will be construed that way in the future.
It's dicta, or will be construed that way in the future.
This.
Why are you ragging on Reason? They hired a health policy wonk, Peter Suderman, for that very purpose a few years back to do just that.
I'm sure you were well compensated but still owe you thanks for treading where I have not the time nor inclination, Pete.
er, in answer to lightning below.
I am not ragging on Reason. Just asking that they have Suderman do an article on the PPACA now that it is law. Even if it was done before, how many people paid attention due to the hopes this would be overturned? As CatoTheElder said, reading this is cruel and unusual punishment, but understanding what is comming is better that getting caught with one's head up ones butt. Especially since both sides are being very political about what is in this bill. There is a lot of misinformation.
It's extraordinary as Roberts had a chance to kill Wickard, an badly reasoned decision of epic proportions, once and for all, and he punted.
I'm trying to give Roberts the benefit of the doubt, he clearly had something cooking in his opinion, but I'm just not getting there.
Please read this bill. Can't say it enough. Read the PPACA; you can easily access the text via google. There is rampant misinformation about this bill now that the "mandate"/"penalty" is now a tax. There are many costs to both businesses and the individual. Reason, please have one of your authors study at least one section (business tax section or individual tax section) so that people can focus on exactly how badly they will be shafted. Whining about SCOTUS not following the constitution won't help anyone. It is now law. We have got to know what is comming down the pike. Read the bill, please.
I believe one of the Supreme Court justices said that the requirement to read the PPACA would amount to cruel and unusual punishment. I seriously doubt that any of them read it.
"If the right one don't gitcha, then the left one will."-- Big Bad John
Indeed. But that line's actually from "Sixteen Tons". Which may work even better:
"Load sixteen tons and whaddya get? Another day older and deeper in debt. St Peter don't ya call me 'cause I can't go -- I owe my soul to the company-store."
Except in our new enlightened age we've replaced the corrupt, price gouging company-store with the corrupt, tax gouging and incompetent federal government.
I agree that this was not a stroke of genius unless you think politicians will always remain shy about raising taxes. If that is the only option they have given a slightly neutered Commerce Clause, they will take it. I expect every piece of horrible, freedom-destroying legislation to come in the form of a "tax" in the future.
I fail to see how "explicit limits on federal power such as those listed in the Bill of Rights" are relevant any longer. If I am no longer protected from laws that violate one part of the Constitution, I would never assume that I have any protections from laws that violate other parts of the Constitution.
Particularly when the 10th Amendment, explicitly reserving all other power to the States and the People, is conveniently no longer recognized as part of those "explicit limits".
It seems to me the government can now request I do something that would otherwise violate my constitutional rights and simply tax me if I fail to comply. So either I 'voluntarily' accede to infringement, or I pay the price. How the fuck is that a win for limited government?
"a chessmaster, a statesman, a Burkean minimalist, a battle-loser but war-winner, a Daniel Webster for our times."
Sounds like a 2003 press statement by Baghdad Bob.
The real problem is that the mandate cannt work as a mandate unless the penalty is high enough to ceorce enough people to purchase health insurance.
Given the prices for health insurance in the individual market, there is a good chance that asignificant number of healthy young people will not purchase it.
In which case, Congress is going to be forced to increase the penalty.
As what point does Robert's reasoning break down, that taxation is not as coercive as a mandate, if Congress is compelled to keep increasing the "tax" to the point that nobody pays it?
On the converse side, if they don't increase it, and not enough people buy health insurance, we will get the fabled insurance death spiral as healthy people drop out of the market and opt to pay the penalty instead.
"As what point does Robert's reasoning break down, that taxation is not as coercive as a mandate, if Congress is compelled to keep increasing the "tax" to the point that nobody pays it?"
Congress can increase income taxes to whatever level they desire, and the SCOTUS is powerless to stop them. 16th.
"On the converse side, if they don't increase it, and not enough people buy health insurance, we will get the fabled insurance death spiral as healthy people drop out of the market and opt to pay the penalty instead."
That's a problem for Congress, not SCOTUS.
It isn't an income tax.
Actually after 2016 it is. It will be 695 multiplied by the CLA (which according to my brief reading involves ones adjusted gross income). There are other details, but that is the crux of it. The $95 is for 2014, $695 for 2015, and the aforementioned rate for 2016 after. This is in the actual bill under the section discussing individual responsibility. There are a lot of details that will affect these amounts (such as subsidies and limits to itemizations) so the real extent of the cost to the individual is hard to ascertain.
In my opinion, it's a hybrid of income tax and direct tax.
My opinion, however, is entirely irrelevant.
On the converse side, if they don't increase it, and not enough people buy health insurance, we will get the fabled insurance death spiral as healthy people drop out of the market and opt to pay the penalty instead.
Exactly. Unless I'm mistaken, the pre-existing condition ban is still in full effect (or will be soon) and this combined with the toothless mandate, will complete the health care nationalization-stalking horse routine.
The problem with that is that the insurance companies going bankrupt would destroy the economy. The Congress is about as likely to let that happen as they were to let the banks go bankrupt. So understand the medial insurance companies are not going bankrupt causing single payer. That is fantasy.
Second, understand that most people will buy health insurance when they can afford it. People are risk averse. And even if you can get health insurance with a pre-existing condition, you still are stuck with the costs you incur before getting that insurance.
So what will happen? Everyone's insurance rates will go up.
So understand the medial insurance companies are not going bankrupt causing single payer. That is fantasy.
**coughcough**Amtrak**cough**
The passenger train carriers were dying from lack of interest. They were not an important part of the economy. Insurance companies in contrast are.
And Amtrak costs a few billion a year. Single payer health care would cost trillions. The liberals broke the bank before they bought their pony. Now the bond markets will tell them they can't have it.
GM was desperate enough to sell a sizable portion of it's assets to the feds. If one or more insurance companies company gets in bad enough shape, and bleats enough to the pols, who will understandably see the need to DO SOMETHING, ANYTHING, I wouldn't be surprised to see something similar happening.
Or, almost worst-case, we could end up in a very uncompetitive market, as the less well-managed/profitable companies go under.
Second, understand that most people will buy health insurance when they can afford it. People are risk averse.
I agree. Most people will still get health insurance, but not everyone. How long did it take you to get life insurance?
People are risk averse. And even if you can get health insurance with a pre-existing condition, you still are stuck with the costs you incur before getting that insurance.
Unless you get the diagnosis and get insurance right away.
Enough stupid people play the lottery to keep it flush with cash. Don't think this will be any different, esp with the massive disincentives in place to get coverage before you "need" it.
But those people are not buying insurance right now. And chances are they won't need it. It is not like everyone develops cancer. I think the risk of people gaming the system is overblown. It is going to raise people's insurance rates. But it is not going to bankrupt the system.
It is going to raise people's insurance rates. But it is not going to bankrupt the system.
As I noted above, it could get bad enough that it creates a insurance market that can sit on its ass and offer shitty coverage at high prices from the lack of competition. Companies have pulled up stakes out of the property indemnity market in certain areas because the state rules make it unprofitable to remain.
I don't put any option beyond the pale with the gubmint we have now. There are people who explicitly want nationalized health care and our masters are cowardly enough to try it. Zod only knows how that would play out beyond ugly and loud.
No politician ever went poor underestimating the gullibility of the American public.
It is going to raise people's insurance rates. But it is not going to bankrupt the system.
It's going to raise people's insurance rates, which will cause more of them to stop buying insurance, which will raise insurance rates even more, which will cause more people to stop buying insurnce ... etc.
People who want health insurance now and can afford it, get it.
If you don't have it, its either because (a) you can't afford it or (b) you don't really want it.
As far as (b) goes, ObamaCare doesn't make anyone suddenly want health insurance. If anything, it goes the other way, since it makes it easier to get when you need it, and the penalties for not having it are far less than the cost of premiums.
As far as (a) goes, well, I'm pretty sure the subsidies don't allofasudden make health insurance affordable for most people.
We'll see, of course, but the analysis on all this runs strongly against very many people picking up insurance because of OCare.
As far as (b) goes, ObamaCare doesn't make anyone suddenly want health insurance. If anything, it goes the other way, since it makes it easier to get when you need it, and the penalties for not having it are far less than the cost of premiums.
I'm trying to recall the details from the waiver frenzy last year, but it's clear that O-care is already costing companies more than it did prior to enactment. There was also talk of companies dropping coverage, knowing the staff will get picked up by the feds, but again, the details are fuzzy now.
The bottom line for me is that it's way too early to come to any solid conclusion as to how a 2200 page monstrosity is going to affect the insurance market, other than Not Good?.
From hier:
cont...
Crap, hier:
cont...
No, they will just nationalize the insurance companies.
"The problem with that is that the insurance companies going bankrupt would destroy the economy. The Congress is about as likely to let that happen as they were to let the banks go bankrupt."
Dude, congress is not only letting it happen, they're making it happen. Roberts pretty much spelled this out in his opinion.
Health insurance companies are no longer permitted to actually act as insurance companies. Congress saw to that.
Does Roberts expect the Congress to pass legislation with language saying the penalty is not coercive? How does this work?
Roberts ruling states that taxes are allowable because obody is coerces to pay the taxes.
he then goes on to admit that it's possible to tax something highly enough as to effect compulsion, and says that would be unconstitutional, then purposely leaves the line where that level of compulsion is drawn a grey area.
It opens the possibility that the court could revisit the issue if Congress were to impoe a "tax penalty" sufficiently large as to be coercive.
Whih, in fact, the penalty for not purchasing insurance will have to be, eventually.
Has anyone heard anything about the argument concerning being forced into a contract with an insurance company or government exchange? That was raised prior to the decision, but I haven't heard anything more. Your comment made me think that a high tax being coercive combined with being forced into a contract might have traction.
Unsurprisingly, the Obama administration can't understand the concept of distributed leadership, can't figure out who to talk to in Syria without a big boss in charge.
Sorry, didn't mean to post this here.
Not only that, you SF'd the link.
"As long as a mandate is disguised as a tax (and as long as it does not violate explicit limits on federal power such as those listed in the Bill of Rights), "because we said so" is reason enough."
But isn't the point that "Because we said so" is now completely irrelevant?
Roberts himself demands that we disregard even the shrillest legislative representations to consider function alone when determining the constitutional of any financial exaction. If the exaction does not function as a tax, it's not a tax at all, regardless of legislative labeling.
Since taxes and penalties, functionally, are diametrically opposed, I still do not understand why we can't use this very logic to contest the "tax" status of penalties masquerading as permissible under the taxing power?
Of course, he just finished concluding that a penalty designed to prompt conduct that forecloses revenue generation is actually a revenue-generating scheme (??!), but his complete logical incoherence in this regard should be hotly contested.
The way this "tax" avoids being struck down as an unapportioned direct tax is because it is tied to income. If your income falls below a certain level, you don't have to pay the "tax" AND you get "free" health care coverage. As a tax, the "penalty" can be seen as a surtax on income. The ability to invent numerous such surtaxes, the avoidance of which requires Congressionally stipulated behavior or purchases, is what turns the income tax into the Commerce Clause of the 21st century. For this reason, the 16th Amendment must be repealed. To a libertarian, even a flat tax looks WAY better than this.
How about an 8-year term limit for Supreme Court justices, so presidents stop appointing the youngest ideologue they can find and go back to appointing old guys who understand the law and don't give a damn what anyone else thins?
"thinks" rather
How do you propose to do this? It would have to be done as an Amendment to the Constitution, in which case the sitting justices would simply choose to interpret the new Amendment to keep their jobs.
It'd probably have to grandfather them in.
I understand that criminal prosecutions, leins, tax levies etc. can't be used regarding the individual tax according to the actual text of the PPACA. However, since Roberts re-wrote the "penalty/mandate" as a tax, will the IRS's powers to collect (which exist outside this law) come into effect and make the anti-enforcement clause in the bill null and void?