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Monday, January 17, 2011

Galle: The Affordable Care Act's Insurance Mandate and the Taxing Power

Brian D. Galle (Boston College) has posted The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise, 121 Yale L.J. Online __ (2011), on SSRN. Here is the abstract:

This brief essay responds to recent court decisions and scholarly commentary questioning the constitutionality of the Affordable Care Act. Criticism has focused in particular on the provision imposing a $695 penalty on those who fail to purchase qualifying health insurance.

I argue that, contrary to the courts and the commentators, this provision is valid as an exercise of Congress' power to lay and collect taxes. Although much has been made of Congress' use of the word "penalty" rather than tax, the Supreme Court has held since 1866 that Congress can invoke the tax power in litigation without using that term in the challenged statute. I also reject any normative arguments for rejecting that venerable rule as unpersuasive. In any event, the relevant section refers to the penalty it imposes as a "tax" 48 times.

More substantively, I argue that efforts to claim that the section would fall afoul of constitutional limits on "direct" taxes over-read those sections of the Constitution. Limits on direct taxes were the product of a compromise over slavery, and have no other obvious deep meaning. While we must honor the bargain that resulted in their inclusion in the Constitution, honor can be paid with a narrow reading that allows Congress, not courts, to make tax policy.

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Comments

It's a little late to be reversing course and claiming that the mandate is really a tax, after the Adminstration took the position that the mandate is actually legal under the commerce clause regulating interstate commerce. You can't have it both ways.

"For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase." -- President Barack Obama, September 2009

But, it won't matter if it's not funded or if it's repealed, which would be best for our country.

I'm already mad that the act increased my kid's health insurance tremendously, so that the insurer could meet the requirement to cover previously uninsured kids with pre-existing conditions. But, that's not a tax, only because the government didn't touch the money in the exchange. The only way to bring this cost down is to introduce rationing, which is another reality that they lie about.

Posted by: Woody | Jan 18, 2011 12:33:03 AM

Other than the fact that Professor Galle has no particular expertise in constitutional law, and that several courts have already rejected his position, I find this argument extremely persuasive.

Posted by: mike livingston | Jan 18, 2011 9:44:31 AM