Liberal Icons: Apple’s Web of Tax Shelters Saved It Billions, Panel Finds
George Mason University law professor Ilya Somin writes today at the SCOTUSblog about yesterday’s stunning decision by the SCOTUS to uphold the ACA, the good, the bad, the ugly – and what it means for the future:
Overall, the Chief Justice endorsed the central arguments of the plaintiffs, as has a majority of the Court. The four dissenting justices – Alito, Kennedy, Scalia, and Thomas — also concluded that the mandate exceeds Congress’ Commerce and Necessary and Proper powers. This has potentially significant implications for future legislation imposing mandates under the Commerce Clause.
The Tax Clause
After agreeing with the plaintiffs on so much, Roberts still voted to uphold the mandate because it is a “tax” authorized by Congress’ power under the Tax Clause. He endorsed an argument that had been rejected by every lower court ruling that addressed it. Even the lawyers for the federal government seemed to have little confidence in it, as indicated by the fact that they relegated it to a brief section near the very end of their brief.
The ruling also runs counter to repeated statements by President Obama and numerous congressional Democrats, who assured us that the mandate was not a tax. As the president put it in 2009, “for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase.” It is perhaps not surprising that Roberts voted to uphold the mandate. But it is a huge shock that he did so on the basis of the government’s weakest argument, one that even most liberal lower court judges had rejected.
Roberts argues that the mandate is a tax because it imposes only a monetary penalty on those who fail to comply, the mandate does not apply to people too poor to pay income taxes, and the fine is collected by the IRS. He admits that this not the “most natural interpretation” of the law.
The text of the statute refers to the fine as a “penalty,” not a tax. And the Supreme Court has repeatedly distinguished between taxes and penalties, defining the latter as “an exaction imposed by statute as punishment for an unlawful act” or omission. The health insurance mandate fits the definition of penalty almost perfectly: it imposes a fine as punishment for the unlawful refusal to purchase government-mandated health insurance.
Chief Justice Roberts claims that this is not a real penalty because “the mandate is not a legal command to buy insurance,” but merely a requirement that violators pay a fine to the IRS. Failure to purchase health insurance, is therefore, not really “unlawful. ” The logic here is underwhelming. Is speeding or jaywalking not really unlawful if the penalty for it is a fine payable to the treasury, and the very poor are exempt from it?
Moreover, pretty much any other mandate can be magically converted into a tax so long as it is structured in the same way as this mandate is. Congress can therefore use similar fines to force people to purchase broccoli, cars, or just about anything else. The danger here is not just theoretical. Numerous interest groups could potentially lobby Congress to enact a law requiring people to buy their products, just as the health insurance industry did in this case.
In his discussion of the Commerce Clause, Roberts ruled that the Constitution denies Congress the power to “bring countless decisions an individual could potentially make within the scope of federal regulation and … empower Congress to make those decisions for him.” Yet, having closed the front door of the Commerce Clause, the Chief Justice has now “empowered” Congress to make those same decisions for us through the tax power.
Prospects for the Future
Today’s decision is unlikely to be the last word on the constitutional limits of federal power. As the close 5-4 division in the Court shows, the justices remain deeply divided on federalism issues. Both Chief Justice Roberts’ opinion and the powerful four-justice dissent reaffirm the need to enforce limits on congressional authority. And both accept all or most of the main constitutional arguments against the mandate. The latter will constrain future mandates imposed under the Commerce and Necessary and Proper Clause. No one can any longer say that the case against the mandate was a sure loser that could only be endorsed by fringe extremists or people ignorant of constitutional law.
Defenders of extremely broad federal power won an important battle today. But the war will continue.
I was at work yesterday when CNN made the blown early call that the individual mandate had been overturned – which I had read on my Twitter feed on the cell phone. Fortunately, no one was in the front office with me. I literally got up, jumped around, screamed “YES!” in delight multiple times, ran down the hall and jumped in excitement some more. (Sorry for the disturbing visual!)
Came back to my seat, continued to read what was coming over Twitter, and then realized CNN had gotten it horribly wrong. Horribly. My heart sank, my stomach dropped. What was worse about the blown call, I was – like many others – stunned to find out that the “swing vote” came from Chief Justice Roberts himself, who can usually be counted on to side with Alito and Scalia on cases with a broad national impact. I tried to make sense of it all, and I simply could not. Red State’s Erick Erickson wrote a positive piece about what Roberts’ had done, explaining the good parts of the ruling, but even that only gave me a moment’s relief. I came home from work not long after and had a chance to read the ruling, and reading Roberts’ opinion simply floored me, especially page 39. My first thought after reading it was “Who the hell IS this guy??”
Fortunately for me – and you, as you probably noticed yesterday at the blog – my co-blogger is an optimist in the truest sense of the word and encouraged me and others who were being Debbie Downers yesterday to remember we still had options: A GOP Congress and President could repeal ObamaCare. Romney himself stated yesterday he would do his first day in office what SCOTUS did not, and that was to repeal ObamaCare. I appreciated the upbeat attitude, and promised that after I got everything out of my system yesterday that my fighting spirit would be renewed today. (Note: Romney raised $4.3 million yesterday after the ruling was announced. Wow.)
And it is. But that being said, I don’t believe Romney can by himself repeal ObamaCare – it is not that simple. Nor is it realistic, in my view, to think we’ll get a Republican Senate majority big enough to withstand nay votes by “moderates” in the Senate on the issue of repeal. If by some miracle we do, I’ll jump and skip around just like I did yesterday when I initially believed the individual mandate had been struck down. But I won’t hold my breath on that, and nor should you.
The House yesterday immediately scheduled a vote on repeal of ObamaCare that will take place after the Independence Day holiday. Senator McConnell, Minority Leader in the Senate, called for repeal yesterday in a statement. These are symbolic moves but important nonetheless in demonstrating their commitment to doing whatever they can to get rid of this monstrosity of a law, a law that is already having devastating impacts not only on the healthcare decisions of thousands of Americans, but also on small business and, as a result, job creation. I stated for the record yesterday in my disgust with what happened that if the GOP did not do everything in their power in the forseeable future to repeal ObamaCare, even if they had to do it piecemeal, that I would leave the the party. There are a few core issues I have that are deal-breakers with this party – abortion is one and full repeal of ObamaCare is another. I would still vote with and for them, but I simply would not want to attach my name to a party that would let ObamaCare stand out of giving up in frustration over failed attempts at repeal or replace.
Fortunately, I don’t think I’ll have to do that. But I will if necessary.
One final (heartbreaking) note: The Volokh Conspiracy and other blogs have speculated that Roberts initially was siding against the ACA, and have written intriguing posts to back up their opinions. If that is indeed the case, one wonders what it was that got Roberts to change his tune. Byron York tries to tackle that here.
In spite of the shock and utter disappointment over yesterday’s SCOTUS ruling, today and onward we continue to fight. It’s gotten that much harder in light of Thursday’s news, but giving up in the latter stages of the game we’re in is never an option, right?
Right. Let’s do this. I’m ready for battle (as my new header, put up Wednesday, indicates ). Are you?