It is Worse Than You Think
Yesterday, Chief Supreme Court Justice John Roberts was the deciding vote in upholding the constitutionality of the Obamacare law. If you followed the Roberts confirmation, this wasn't a real surprise. Robert's view on the Supreme Court is that the people elect Congress and the President and not the court. The court should therefore yield to the Legislative and Executive branches wherever possible. This is in opposition to the position that Scalia and others hold that the Constitution strictly limits the power of the federal government.
If you have time, every person should read the opinion on the case. It can be found on the Supreme Court page and its official title is National Federation of Independent Business v. Sebelius. Note that the dissent is after the majority opinion and not listed as a separate document.
What is seen in that decision is just how far down the rabbit hole we are when it comes to the government in this country. Conservatives expected the Supreme Court to "save them" from the uncostitutionality of Obamacare. What the Roberts' court did was far more important than simply upholding the constitutionality of the Affordable Care Act - it sent a clear and unmistakable message that the court will not act as a limiting device on the powers of federal government.
This message was sent by the Chief Justice himself. Writing the majority opinion that upheld the law, Roberts wrote that it is the duty of the Supreme Court to find any means whatsoever to save a law from from being found unconstitutional. This is true even if the supporter of the law fails to make the required argument or makes an entirely different argument. This was how Chief Justice Roberts was able to find that the mandate to purchase health insurance was not constitutional as presented, but that it can go ahead as a tax - even though the law expressly states it is a mandate, even though no legal basis exists for this act.
What is pasted below is the portion of the dissent addressing the matter of whether or not the mandate is a tax. Reading this portion of the opinion was, quite frankly, embarrassing. The argument that the mandate is legal on a taxing basis is destroyed so thouroughly that it is difficult to believe that the Justices that upheld the law did so with anything other than complete and total disregard for whether or not it was legal. They liked the law and therefore, they upheld it.
Also note that even the majority opinion found the mandate to be unconstitutional. However, they allowed the mandate to continue as a tax - a legal and metal hoop that the dissenting opinion crushes with the fist of an angry god.
Here are the highlights denoting why the law is not a tax and is therefore not legal:
- 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.
- The Court has never held that a penalty imposed for violation of the law was so trivial as to be in effect a tax.
- The law in question clearly and repeatedly states that the money in question is being withheld as a penalty and not a tax.
- The legislation cited by the majority opinion allowing the law to exist as a tax is not a valid citation.
- The legislation itself prescribes a penalty for not complying with the mandate. The majority opinion agrees that the mandate is not constitutional. Therefore, a penalty cannot exist as enforcement for a violation of law that does not exist. The existence of the penalty creates a law prohibiting the action. A tax simply cannot be used as a penalty for enforcement of laws, especially when that tax is created within the same legislation that found the law in question unconstitutional.
- The legislation itself states that there are some people who are exempt from the tax, but are not exempt from the mandate - a fact which simply would not exist if the mandate were not in fact a mandate.
- As part of the government's case that the law was a tax, it argued that “neither the Treasury Department nor the Department of Health and Human Services interprets Section 5000A as imposing a legal obligation.” However, as pointed out in the dissent, the government itself argued the opposition opinion against Virginia when it passed legislation removing the mandate from its citizens
- The mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found—in Title IX, containing the Act’s “Revenue Provisions.”
- Finally, the court simply cannot rewrite legislation and provide the government with arguments so that an unconstitutional law retains the same force and meaning, yet is rewritten by the courts to be "legal." That is what the Roberts' opinion did.
Note: This is only the portion from the dissent dealing with the taxing power of the law. Section 5000A is the section concerning the mandate. Prior to the taxing power section, the dissent addressed the unconstitutionality of the mandate.
The Taxing Power
As far as §5000A is concerned, we would stop there. Congress has attempted to regulate beyond the scope of its Commerce Clause authority, and §5000A is therefore invalid. The Government contends, however, as expressed in the caption to Part II of its brief, that “THE MINIMUM COVERAGE PROVISION IS INDEPENDENTLY AUTHORIZED BY CONGRESS’S TAXING POWER.” The phrase “independently authorized” suggests the existence of a creature never hitherto seen in the United States Reports: A penalty for constitutional purposes that is also a tax for constitutional purposes. In all our cases the two are mutually exclusive. The provision challenged under the Constitution is either a penalty or else a tax. Of course in many cases what was a regulatory mandate enforced by a penalty could have been imposed as a tax upon permissible action; or what was im- posed as a tax upon permissible action could have been a regulatory mandate enforced by a penalty. But we know of no case, and the Government cites none, in which the imposition was, for constitutional purposes, both. The two are mutually exclusive. Thus, what the Government’s caption should have read was “ALTERNATIVELY, THE MINIMUM COVERAGE PROVISION IS NOT A MANDATE-WITH-PENALTY BUT A TAX.” It is important to bear this in mind in evaluating the tax argument of the Government and of those who support it: The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.
In answering that question we must, if “fairly possible,” Crowell v. Benson, 285 U. S. 22, 62 (1932), construe the provision to be a tax rather than a mandate-with-penalty, since that would render it constitutional rather than un- constitutional. But we cannot rewrite the statute to be what it is not. “‘“[A]l- though this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . . .” or judicially rewriting it.’” In this case, there is simply no way, “without doing violence to the fair meaning of the words used,” to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.
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. In a few cases, this Court has held that a “tax” imposed upon private conduct was so onerous as to be in effect a penalty. But 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 amonetary 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 unquestion-ably is. The minimum-coverage provision is found in 26 U. S. C. §5000A, entitled “Requirement to maintain minimum essential coverage.” (Emphasis added.) It commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage.” Ibid. (emphasis added). And the immediately following provision states that, “[i]f . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.” §5000A(b)(emphasis added). And several of Congress’ legislative “findings” with regard to §5000A confirm that it sets forth a legal requirement and constitutes the assertion of regulatory power, not mere taxing power. See 42 U. S. C. §18091(2)(A) (“The requirement regulates activity . . .”);§18091(2)(C) (“The requirement . . . will add millions of new consumers to the health insurance market . . .”); §18091(2)(D) (“The requirement achieves near-universal coverage”); §18091(2)(H) (“The requirement is an essential part of this larger regulation of economic activity, and the absence of the requirement would undercut Federal regulation of the health insurance market”); §18091(3) (“[T]he Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation”).
The Government and those who support its view on the tax point rely on New York v. United States, 505 U. S. 144, to justify reading “shall” to mean “may.” The “shall” in that case was contained in an introductory provision—a recital that provided for no legal consequences—which said that “[e]ach State shall be responsible for providing . . . for the disposal of . . . low-level radioactive waste.” 42 U. S. C. §2021c(a)(1)(A). The Court did not hold that “shall” could be construed to mean “may,” but rather that this preliminary provision could not impose upon the oper- ative provisions of the Act a mandate that they did not contain: “We . . . decline petitioners’ invitation to construe §2021c(a)(1)(A), alone and in isolation, as a command to the States independent of the remainder of the Act.” New York, 505 U. S., at 170. Our opinion then proceeded to “consider each [of the three operative provisions] in turn.” Ibid. Here the mandate—the “shall”—is contained not in an inoperative preliminary recital, but in the dispositive operative provision itself. New York provides no support for reading it to be permissive.
Quite separately, the fact that Congress (in its own words) “imposed . . . a penalty,” 26 U. S. C. §5000A(b)(1),for failure to buy insurance is alone sufficient to render that failure unlawful. It is one of the canons of interpretation that a statute that penalizes an act makes it unlawful: “[W]here the statute inflicts a penalty for doing an act, although the act itself is not expressly prohibited, yet to do the act is unlawful, because it cannot be supposed that the Legislature intended that a penalty should be inflicted for a lawful act.” Powhatan Steamboat Co. v. Appomattox R. Co., How. 247, 252 (1861). Or in the words of Chancellor Kent: “If a statute inflicts a penalty for doing an act,the penalty implies a prohibition, and the thing is unlawful, though there be no prohibitory words in the statute.” 1 J. Kent, Commentaries on American Law 436 (1826).
We never have classified as a tax an exaction imposed for violation of the law, and so too, we never have classified as a tax an exaction described in the legislation itself as a penalty. To be sure, we have sometimes treated as a tax a statutory exaction (imposed for something other than a violation of law) which bore an agnostic label that does not entail the significant constitutional consequences of a penalty—such as “license” (License Tax Cases, 5 Wall. 462 (1867)) or “surcharge” (New York v. United States, supra.). But we have never—never—treated as a tax an exaction which faces up to the critical difference betweena tax and a penalty, and explicitly denominates the exaction a “penalty.” Eighteen times in §5000A itself and else- where throughout the Act, Congress called the exaction in §5000A(b) a “penalty.”
That §5000A imposes not a simple tax but a mandate to which a penalty is attached is demonstrated by the fact that some are exempt from the tax who are not exempt from the mandate—a distinction that would make no sense if the mandate were not a mandate. Section 5000A(d) exempts three classes of people from the definition of “applicable individual” subject to the minimumcoverage requirement: Those with religious objections or who participate in a “health care sharing ministry,”§5000A(d)(2); those who are “not lawfully present” in the United States, §5000A(d)(3); and those who are incarcerated, §5000A(d)(4). Section 5000A(e) then creates a separate set of exemptions, excusing from liability for thepenalty certain individuals who are subject to the minimum coverage requirement: Those who cannot affordcoverage, §5000A(e)(1); who earn too little income to require filing a tax return, §5000A(e)(2); who are membersof an Indian tribe, §5000A(e)(3); who experience only shortgaps in coverage, §5000A(e)(4); and who, in the judgmentof the Secretary of Health and Human Services, “havesuffered a hardship with respect to the capability to obtaincoverage,” §5000A(e)(5). If §5000A were a tax, these twoclasses of exemption would make no sense; there being no requirement, all the exemptions would attach to the penalty (renamed tax) alone.
In the face of all these indications of a regulatory requirement accompanied by a penalty, the Solicitor General assures us that “neither the Treasury Department nor the Department of Health and Human Services interprets Section 5000A as imposing a legal obligation,” Petitioners’ Minimum Coverage Brief 61, and that “[i]f [those subject to the Act] pay the tax penalty, they’re in compliance withthe law,” Tr. of Oral Arg. 50 (Mar. 26, 2012). These self serving litigating positions are entitled to no weight. What counts is what the statute says, and that is entirely clear. It is worth noting, moreover, that these assurances contradict the Government’s position in related litigation. Shortly before the Affordable Care Act was passed, the Commonwealth of Virginia enacted Va. Code Ann. §38.2–3430.1:1 (Lexis Supp. 2011), which states, “No resident of [the] Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage exceptas required by a court or the Department of Social Services . . . .” In opposing Virginia’s assertion of standing to challenge §5000A based on this statute, the Government said that “if the minimum coverage provision is unconstitutional, the [Virginia] statute is unnecessary, and if the minimum coverage provision is upheld, the state statute is void under the Supremacy Clause.” Brief for Appellantin No. 11–1057 etc. (CA4), p. 29. But it would be void under the Supremacy Clause only if it was contradicted bya federal “require[ment] to obtain or maintain a policy ofindividual insurance coverage.”
Against the mountain of evidence that the minimum coverage requirement is what the statute calls it—a requirement—and that the penalty for its violation is what the statute calls it—a penalty—the Government brings forward the flimsiest of indications to the contrary. It notes that “[t]he minimum coverage provision amends theInternal Revenue Code to provide that a non-exempted individual . . . will owe a monetary penalty, in addition tothe income tax itself,” and that “[t]he [Internal RevenueService (IRS)] will assess and collect the penalty in the same manner as assessable penalties under the Internal Revenue Code.” Petitioners’ Minimum Coverage Brief 53. The manner of collection could perhaps suggest a tax if IRS penalty-collection were unheard-of or rare. It is not. See, e.g., 26 U. S. C. §527(j) (2006 ed.) (IRS-collectible pen- alty for failure to make campaign-finance disclosures);§5761(c) (IRS-collectible penalty for domestic sales of to- bacco products labeled for export); §9707 (IRS-collectible penalty for failure to make required health-insurancepremium payments on behalf of mining employees). In Reorganized CF&I Fabricators of Utah, Inc., 518 U. S. 213, we held that an exaction not only enforced by the Commissioner of Internal Revenue but even called a “tax” was in fact a penalty. “[I]f the concept of penalty meansanything,” we said, “it means punishment for an unlawfulact or omission.” Id., at 224. See also Lipke v. Lederer, 259 U. S. 557 (1922) (same). Moreover, while the penalty is assessed and collected by the IRS, §5000A is administered both by that agency and by the Department of Health and Human Services (and also the Secretary of Veteran Affairs), see §5000A(e)(1)(D), (e)(5), (f)(1)(A)(v),(f)(1)(E) (2006 ed., Supp. IV), which is responsible for defining its substantive scope—a feature that would bequite extraordinary for taxes.
The Government points out that “[t]he amount of thepenalty will be calculated as a percentage of household income for federal income tax purposes, subject to a floor and [a] ca[p],” and that individuals who earn so little money that they “are not required to file income tax returns for the taxable year are not subject to the penalty”(though they are, as we discussed earlier, subject to the mandate). Petitioners’ Minimum Coverage Brief 12, 53. But varying a penalty according to ability to pay is an utterly familiar practice. See, e.g., 33 U. S. C. §1319(d) (2006 ed., Supp. IV) (“In determining the amount of a civil penalty the court shall consider . . . the economic impact of the penalty on the violator”);
The last of the feeble arguments in favor of petition- ers that we will address is the contention that what this statute repeatedly calls a penalty is in fact a tax because it contains no scienter requirement. The presence of such a requirement suggests a penalty—though one can imagine a tax imposed only on willful action; but the absence of such a requirement does not suggest a tax. Penalties for absolute-liability offenses are commonplace. And where a statute is silent as to scienter, we traditionally presume a mens rea requirement if the statute imposes a “severepenalty.” Staples v. United States, 511 U. S. 600, 618 (1994). Since we have an entire jurisprudence addressing when it is that a scienter requirement should be inferred from a penalty, it is quite illogical to suggest that apenalty is not a penalty for want of an express scienter requirement.
And the nail in the coffin is that the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found—in Title IX, containing the Act’s “Revenue Provisions.” In sum, “the terms of [the] act rende[r] it unavoidable,” Parsons v. Bedford, 3 Pet. 433, 448 (1830), that Congress imposed a regulatory penalty, not a tax.
For all these reasons, to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it. Judicial tax-writing is particularly troubl- ing. Taxes have never been popular, see, e.g., Stamp Actof 1765, and in part for that reason, the Constitutionrequires tax increases to originate in the House of Representatives. See Art. I, §7, cl. 1. That is to say, they mustoriginate in the legislative body most accountable to the people, where legislators must weigh the need for the tax against the terrible price they might pay at their nextelection, which is never more than two years off. The Federalist No. 58 “defend[ed] the decision to give theorigination power to the House on the ground that theChamber that is more accountable to the people should have the primary role in raising revenue.” United States
v. Munoz-Flores, 495 U. S. 385, 395 (1990). We have no doubt that Congress knew precisely what it was doing when it rejected an earlier version of this legislation thatimposed a tax instead of a requirement-with-penalty. See Affordable Health Care for America Act, H. R. 3962, 111th Cong., 1st Sess., §501 (2009); America’s Healthy FutureAct of 2009, S. 1796, 111th Cong., 1st Sess., §1301. Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch ofgovernment least accountable to the citizenry.
Finally, we must observe that rewriting §5000A as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population. Art. I, §9, cl. 4. Perhaps itis not (we have no need to address the point); but the meaning of the Direct Tax Clause is famously unclear, and its application here is a question of first impression thatdeserves more thoughtful consideration than the lick-anda-promise accorded by the Government and its supporters. The Government’s opening brief did not even address the question—perhaps because, until today, no federal court has accepted the implausible argument that §5000A isan exercise of the tax power. And once respondents raisedthe issue, the Government devoted a mere 21 lines of its reply brief to the issue. Petitioners’ Minimum Coverage Reply Brief 25. At oral argument, the most prolongedstatement about the issue was just over 50 words. Tr. of Oral Arg. 79 (Mar. 27, 2012). One would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.