In 1935, Secretary of Labor Frances Perkins was fretting about finding a constitutional basis for the Social Security Act. Supreme Court Justice Harlan Fiske Stone advised her, "The taxing power, my dear, the taxing power. You can do anything under the taxing power."
Last week, in his ObamaCare opinion, NFIB v. Sebelius, Chief Justice John Roberts gave Congress the same advice—just enact regulatory legislation and tack on a financial penalty, as in failure to comply with the individual insurance mandate. So how did the power to tax under the Constitution become unbounded?
The first enumerated power that the Constitution grants to Congress is the "power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States." The text indicates that the taxing power is not plenary, but can be used only for defined ends and objects—since a comma, not a semicolon, separated the clauses on means (taxes) and ends (debts, defense, welfare)....
After President Franklin D. Roosevelt threatened to "pack" the Supreme Court in 1937, it accepted such transfer payments in Mulford v. Smith (1939), so long as the taxes were paid into the general treasury and not earmarked for farmers. Justice Roberts has confirmed that there are no limits to regulatory taxation as long as the revenue is deposited in the U.S. Treasury.
Maybe historians (Moreno is a historian at Hillsdale College) should leave tax analysis to tax experts. Let me say this here for the record: the Supreme Court would have looked utterly foolish if it had failed to uphold the mandate as an exercise of the taxing power. As noted by another commentator, failure to recognize the mandate's legitimacy under the taxing power would suggest that it was unconstitutional to tax to insure those under age 65, while Medicare is constitutional for taxing those at 65 or over. Further, it would make an impossible distinction between the insurance mandate's penalty provision and what could be called the Internal Revenue Code's marriage mandate penalty provision".