Michael Graetz (Columbia):
The Supreme Court upheld the individual mandate of the health care statute today in a 5-4 ruling stating that it is a valid exercise of the taxing power under the Constitution. There were only four votes to uphold the requirement as valid under the Commerce Clause. The majority opinion by Justice Roberts emphasized that folks who don’t want to purchase health insurance can avoid doing so simply by paying the fee imposed by section 5000A of the tax code, whose collection is enforced by the IRS. Chief Justice Roberts pointed out that the fee may cost considerably less than purchasing a health insurance policy and that the fee is not applicable to people whose income is so low that they are not required to file income tax returns. Interestingly, the four dissenters did not claim that imposing such a tax on the failure to purchase health insurance would be unconstitutional. Instead they relied on the constitutional significance of Congress calling the fee a penalty, not a tax. Justice Roberts insisted that this Congressional label was not relevant in assessing the provision’s constitutionality. In a twist, however, Justice Roberts held that the congressional label was determinative in deciding whether the Anti-Injunction Act—a statute which bars lawsuits challenging taxes before the time for their collection—applied, a holding with which the four dissenters agreed. So, the Court decided that even though the provision is a tax for interpreting the Constitution, it is not a tax for interpreting the Anti-Injunction statute. Around Congress, it has often been said about taxes that “if it walks like a duck and quacks like a duck, it is a duck.” Today, poultry just became far easier to identify than a “tax.”
Dan Shaviro (NYU):
Bottom line, evidently Chief Justice Roberts didn't want the Court that bears his name to go out as far and as visibly on a hyper-partisan limb as striking down the Act would have necessitated. I find this cause for relief, although he may continue to act more aggressively, in full cahoots with the other four, when the level of public scrutiny is lower.
Jack Bogdanski (Lewis & Clark):
For the tax geeks among us, a majority of the Court in the health care case did make some law about the scope of a "direct tax," which Congress is not allowed to impose without apportionment among the states:
A tax on going without health insurance does not fall within any recognized category of direct tax. It is not a capitation. Capitations are taxes paid by every person, "without regard to property, profession, or any other circumstance." Hylton at 175. ... The whole point of the shared responsibility payment is that it is triggered by specific circumstances -- earning a certain amount of income but not obtaining health insurance. The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.
Bradley W. Joondeph (Santa Clara):
[T]here was a real danger to the Court that it might stain itself with the appearance of partisanship—especially in light of other recent decisions (i.e. Citizens United) and those headed its way (such as those involving affirmative action and the Voting Rights Act). The Chief Justice’s opinion rightly claims the mantle of bipartisanship and judicial modesty for the Court, and in this highest of high-profile cases. This will be, I think, enormously valuable to the Court’s long-term institutional standing. At the same time, the Chief Justice established some important (conservative) doctrinal beachheads — namely, reaffirming or establishing important limits on Congress’s powers to regulate interstate commerce and to spend for general welfare.
Joe Kristan (Roth & Co.):
Maybe the most depressing aspect of the decision is the way it seems to endorse using the tax law as the Swiss Army Knife of public policy. Things that Congress can't enact any other way are now possible if they can somehow be crammed into the tax law. The tax code is already groaning under its load of responsibilities for industrial policy, health policy, welfare policy and housing policy, for starters. The IRS Commissioner is now sort of a super cabinet member with a portfolio that dwarfs most of the "real" cabinet departments. Of course, the IRS is ill-suited to this role, resulting in poor policy administration and poor tax administration. Thanks, Justice Roberts!
- Americans for Tax Reform, If the Mandate Is a Tax, Obama Lied His Way Into Office
- Jack Balkin (Yale), Tax Power: The Little Argument That Could
- Bloomberg, Court Ruling Lets $813 Billion in Higher Taxes Proceed
- Len Burman (Syracuse), Health Insurance Mandate/Penalty is Just Another Tax
- Competitive Enterprise Institute, Supreme Court Concocts "Rational Tax Test" in Health Ruling
- Don't Mess With Taxes, Obamacare (and Associated Tax) Upheld by Supreme Court
- Forbes, How Health Insurance Individual Mandate Quacks Like a Tax
- Politico, Health Care Ruling: GOPers Pounce on SCOTUS Tax Talk
- Tax Girl, Tax Girl,When Is A Penalty A Tax? Sorting Through The SCOTUS Health Care Decision
- Tax Policy Center, Supreme Court Problematically Defines Individual Mandate as "Tax"
- Tax Vox, The Supreme Court Says the Health Care Mandate is a Constitutional Tax
- Wall Street Journal, The ObamaCare Tax
- WSJ Politics Blog, Unwanted Label of 'Tax' Saves Health Measure
Prior TaxProf Blog coverage:
- Erik M. Jensen (Case Western), The Individual Mandate and the Taxing Power, 134 Tax Notes 97 (Jan. 2, 2012)
- Calvin H. Johnson (Texas), Healthcare Penalty Need Not Be Apportioned Among the States, 128 Tax Notes 335 (July 19, 2010)
- Edward D. Kleinbard (USC), Constitutional Kreplach, 128 Tax Notes 755 (Aug. 16, 2010)
- Ruth Mason (Connecticut), Just How Broad is the Taxing Power (Jotwell)
- Steven J. Willis (Florida) & Nakku Chung (J.D. 2010, Florida), Constitutional Decapitation and Health Care, 128 Tax Notes 169 (July 12, 2010)
- Steven J. Willis (Florida) & Nakku Chung (J.D. 2010, Florida), Oy Yes, the Healthcare Penalty is Unconstitutional, 129 Tax Notes 725 (Nov. 8, 2010)
- Steven J. Willis (Florida) & Nakku Chung (J.D. 2010, Florida), Credits vs. Taxes: The Constitutional Effects on the Health Care Reform Debate