Matthew A. Melone (Lehigh University), The Pundits Doth Protest Too Much: National Federation of Independent Business v. Sebelius and the Future of the Taxing Power, 2012 Mich. St. L. Rev. 1189:
Part I of this Article provides a detailed analysis of the individual mandate. The Congressional Budget Office has estimated that approximately four million individuals will be liable for the mandate, which goes into effect on January 1, 2014. The amount of liability that a particular individual will incur depends upon that individual's income, family status, and the national average cost of a statutorily defined level of insurance coverage. For many individuals the penalty due will be a flat amount, and for others the amount due will be determined as a percentage of income. In no event, however, will the penalty exceed the national average cost of coverage.
Part II analyzes and critiques the Court's decisions with respect to the taxing power issues and the Court's holding that the Anti-Injunction Act, a threshold issue, was inapplicable in this case. The majority held, over a vigorous dissent, that the individual mandate was not a penalty but a tax. A determination by the Court that the mandate is a penalty would have removed the taxing power as an independent pillar of support for the exaction. The Court made clear that Congress may tax inaction and distinguished the taxing and commerce powers. However, the Court's reasoning in this respect failed to provide principled guidance for the classification of future exactions of this sort. The Court also held that the individual mandate is not a direct tax that must be apportioned among the states. The Court's attention to this issue was laconic and, similar to its resolution of the penalty versus tax issue, left many questions unanswered.
Part III takes exception, for several reasons, to the notion that this case has opened the door to unfettered federal taxing authority that will tempt Congress to tax what it cannot regulate.
The taxing power has been wielded often in an intrusive manner. Whether the extension of such power to the taxation of inactivity is more objectionable than other actions that have been taken regularly under this power is questionable. Congress, without much controversy, could have achieved the individual mandate's objective through alternative means. Assertions that such alternative means come with more political accountability are dubious. In fact, exactions in the form of the mandate are highly transparent and efficient.
The Court, however, did not recast the mandate in another form and examined it for what it is--a tax imposed on the failure to act in a prescribed manner. As a result, future attempts by Congress to impose similar exactions will face several barriers. In comparison to the common forms taken by behavior-altering tax provisions, the transparency of exactions in this form will make such exactions more susceptible to traditional constitutional challenges. More importantly, despite upholding the mandate, the Court awoke long somnolent precedent. The penalty or tax issue has been resurrected and, given the Court's less than satisfactory analysis of this issue, it is likely that particularly intrusive future enactments will be challenged as impermissible penalties. Finally, whether a tax is a direct tax, an issue that prior to this case was perceived to be more of a curiosity than a limiting principle, is a question that may be put to exactions that result from Congress's overaggressive use of its new-found power.