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Sunday, July 29, 2012

A Tax Lesson From Chief Justice Roberts

Forbes:  A Tax Lesson From Chief Justice Roberts, by Donald B. Susswein (McGladrey, Washingto, D.C.):

Chief Justice Roberts has been lambasted from both sides for his conclusion that the health care individual mandate is a tax. The left has welcomed the result but rejected the dreaded label – as though it were a scarlet “T”. The right not only detests the result but fears an unprecedented new Federal power to regulate private conduct through the tax code. As a former Majority Tax Counsel to the U.S. Senate Committee of Finance, I can readily explain why both criticisms are unfounded.

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Comments

While it is difficult in most times to agree with Justice Scalia, he is correct in that the mandate is not a tax, and efforts to call it a tax reveal how weak that concept it.

What is missing is the correct interpretation of what happened with ACA. The object of regulation was not health insurance, it was health care. Here is the basic, simple analysis.

1. Health care is interstate commerce.
2. Every individual participates in the health care system.
3. Therefore under the Constitution Congress can regulate health care.
4. Health insurance is merely the means to pay for health care.
5. Since Congress can regulate health care under the Commerce Clause and since everyone participates in health care Congress can regulate how everyone pays for health care.

Had the majority taken this approach the legitimacy of ACA would have been established without controversy, except for those who opposed it on political rather than Constitutional grounds.

Posted by: David R. | Jul 29, 2012 8:53:08 AM

Susswein's argument flops because he interprets a hypothetical statute, not the ACA.

Posted by: Jake | Jul 29, 2012 1:52:05 PM

David, here's a simple analysis for federal authority to take over the nation's private medical care:

1. Germs move across state lines.
2. Every person is subject to getting germs. ....

You get it. Anyone with a big government political agenda and some creativity can deem anything to be interstate commerce.

And, while I know it's picky, some grammar errors on people's sites drive me crazy.
http://www.chicagomanualofstyle.org/CMS_FAQ/LessorFewer/LessorFewer01.html

Posted by: Woody | Jul 30, 2012 2:37:11 AM

It was obviously a tax from the beginning. I would like to see a cogent explanation of why being a tax in the "constitutional sense" does not preclude it from being a tax for purposes of the Anti-Injunction Tax Act. Maybe there are some penumbras in Art. I, sec. 8, cl. 1, hiding behind normal rules of statutory construction, and only judges wise enough to see through those shadows can understand the truths of Obamacare. But I think the more accurate description of that analysis is ad hoc reasoning.

Posted by: TexEcon | Jul 30, 2012 8:25:15 AM

"Anyone with a big government political agenda and some creativity can deem anything to be interstate commerce."

You mean, like Scalia was able to do in his Gonzales v. Raich concurrence?

Posted by: Justin | Jul 30, 2012 1:27:29 PM

Dave's "basic and simple" analysis is a little too basic and simple. Following the logic of his analysis, an "Affordable Car (no "e") Act" could constitutionally require everyone to buy a new Chevy Volt or a "Smart Car" every three years:

1. Transportation is interstate commerce.
2. Every individual participates in the transportation system.
3. Therefore under the Constitution Congress can regulate transportation.
4. "Car insurance" is merely the means to pay for a mode of transportation that nearly every American uses or will "inevitably" use.
5. Since Congress can regulate transportation under the Commerce Clause and since everyone participates in transportation Congress can regulate how everyone pays for transportation.

The same logic works for food and shelter too.

Posted by: acriticalthinker | Sep 13, 2012 10:51:30 AM