July 19, 2010
Johnson: Tax Penalty in ObamaCare Is Not Unconstitutional
Follwing up on last week's post, Steven J. Willis (Florida) & Nakku Chung (J.D. 2010, Florida), Constitutional Decapitation and Health Care, 128 Tax Notes 169 (July 12, 2010): Calvin H. Johnson (Texas) has published Healthcare Penalty Need Not Be Apportioned Among the States, 128 Tax Notes 335 (July 19, 2010):
Steven J. Willis and Nakku Chung ...argue that the penalty imposed under new § 5000A for failure to maintain minimum essential healthcare coverage is unconstitutional because it is not apportioned among the states by population. I write because § 5000A is constitutional. Only direct taxes must be apportioned. Under the 1787 meaning of the Constitution, § 5000A is not a direct tax because apportionment of this tax among the states is not reasonable and is not to be expected. "Direct taxes" are taxes in the nature of requisition upon the states. Apportionability was a key defining element of all direct taxes under the original intent.
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Hylton is inconsistent: while saying that direct taxes are only those that can be reasonably apportioned without unjust results, it also claims that a tax on real estate is direct. But differences in the number of landowners and land holdings among the states would lead to the same kind of unjust rate differentials as discussed in Hylton in connection with the carriage tax. So maybe Hylton's "reasonably apportionable" test isn't the definitive way of determining what a direct tax is.
Posted by: Guy Helvering | Jul 19, 2010 11:00:13 AM
I agree, Guy. Hylton actually has multiple opinions - and no opinion of the Court. This was back in the 1700's. Others have also suggested what Cal Johnson appears to say: the only Direct Tax is one which can be apportioned. But, that effectively eviscerates the apportionment requirement. Consider a $1 per acre tax on land, which is unquestionably Direct . . . I do not believe anyone disagrees with that. How could that be apportioned by population? Compare the results in Alaska with an enormous number of acres, but few people, to the results in Rhode Island with little land and more people. The per person amount for Alaska would be far greater than would the per person amount for Rhode Island. But a land tax is exactly what the drafters were concerned with (along with a slave tax.
Posted by: Steven J. Willis | Jul 19, 2010 12:53:04 PM
Everyone seems to say this is an "easy" case, but when you ask them to cite another example where the Government has forced people to buy something that they don't want, they become rather quiet. What if the Government required everyone to buy a ticket to major league baseball, and taxed you if you didn't? The tax apportionment question is only part of it.
Posted by: mike livingston | Jul 19, 2010 10:00:31 PM