Thursday, June 28, 2012

Individual Mandate is AOK because it's a tax on ommision. Forget about that Commerce Clause Stuff..

Sanka freeze-dried version of the relevant pages of the Roberts write-up (cut and paste of portions of the PDF just below the post, with apologies for formatting errors, thanks to my being too lazy to deal with them):

1. The Commerce Clause argument offered by the government lawyers was a no-go. So, we on the court (well 5 of us anyway) consider the other argument they flailingly attempted; the taxation argument. Remember, that one? It gave them the flop sweats? They should have relied on it, because we found a way to justify the individual mandate using it. Here 'tis:

a. the IM really amount to an exercise of the government's taxation power

b. the Constitution protects from being forced to fork over dough to government via laws or regs making use of the commerce clause, by allowing room for us to abstain from the activities or purchases in question.

d. No such wiggle room is given in regard to taxation. The Constitution talks about "capitation taxes" and entertains the legitimacy of these taxes that essentially tax people for existing. Oh; and Ben Franlin talked about 'death and taxes' dontcha know.

e. this means, that the Constitution allows wiggle room for the goverment to tax you for NOT doing things.

f. that's the best way to present the individual mandate. It's a tax that is imposed for not purchasing health insurance.

g. What is more, it is not an onerous tax. If it were, it could be struck. As it is, the tax amounts to less money per year than a person will typically spend on the required insurance. So it ain't onerous.

(Observation:  Suppose you are among the uninsured folks making enough money to be covered by this law. You are considering whether or not to comply. Now you have two options.  Comply, spend about 400 a month on insurance. Don't comply, spend about 200 a month (tax).  What will you do? It doesn't take a PhD in Econ to figure it out. Probably, if you are young, and consider yourself a good risk, you'll pay that tax. As you get older, you'll probably reconsider.

But notice here, you are paying 200 clams that you would not have been paying before. So, your taxes have been increased by this law.

And we do have to wonder what will be done with this tax money. Will it go to cover the uninsured? Via what route?

Another curious bit from the Roberts opinion. A case where he simply glosses over significant disanalogies: Notice this chunk just below:

Congress’s use of the Taxing Clause to encourage buying something is, by contrast, not new. Tax incentives already promote,for example, purchasing homes and professional educations. See 26 U. S. C. §§163(h), 25A. Sustaining the mandate as a tax depends only on whether Congress
has properly exercised its taxing power to encourage purchasing health insurance, not whether it can. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.

Notice the examples cited for the alleged 'not newness' of the mandate: Mortage deductions, first time buyer incentives, and educational deductions. In each of these cases, government incentivizes by allowing people to keep more of their income, provided that they can document these activities. None of these activities is anything that people are in any way legally compelled to do. It ain't like that with the mandate.

In none of the illustrative cases is it required by law that you make the corresponding purchases. I don't HAVE to buy a house, nor do I HAVE to pursue a college degree. But, if I choose to, I can take advantage of the incentives.  In the present case, on the other hand, there is a law that requires me to buy health insurance. I have to show up at tax time with proof I made that purchase,otherwise, I must fork over more of my money. 

The examples are decidedly NOT like that.

So, despite what Roberts writes it is quite 'new' in that respect. "Encouragment" is a curious word to use in this context, and more than a bit Orwellian. A much closer analogy would be genuine and generous incentives, minus the IM requirement, and codified penalty. Say, the feds allowed you to deduct the entire amount of your health insurance, or some multiple of it. That would be 'encouragement.' not a penalty, right?



OK, now the Cut and Paste Job, these are the parts I've focused on in brewing the Sanka:








The Government does not claim that the taxing power allows Congress to issue such a command. Instead, the Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product...
The most straightforward reading of the mandate is that it commands individuals to purchase insurance.
After all, it states that individuals "shall" maintain health insurance. 26 U. S. C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on thatbasis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether theGovernment’s alternative reading of the statute—that it only imposes a tax on those without insurance—is a reasonable one.








Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. See §5000A(b). That, according to the Government,means the mandate can be regarded as establishing acondition—not owning health insurance—that triggers atax—the required payment to the IRS.

The question is not whether that is the most naturalinterpretation of the mandate, but only whether it is a "fairly possible" one.
Crowell v. Benson, 285 U. S. 22, 62 (1932). As we have explained, "every reasonable construction must be resorted to, in order to save a statute from unconstitutionality." Hooper v. California, 155 U. S. 648, 657 (1895). The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below.

And another








There may, however, be a more fundamental objection to a tax on those who lack health insurance. Even if only a tax, the payment under §5000A(b) remains a burden that the Federal Government imposes for an omission, not an act. If it is troubling to interpret the Commerce Clause as authorizing Congress to regulate those who abstainfrom commerce, perhaps it should be similarly troubling to permit Congress to impose a tax for not doing something.

Three considerations allay this concern. First, and most importantly, it is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution. The Court today holds that our Constitution protects us from federal        

lregulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes. See Letter from Benjamin Franklin to M. Le Roy (Nov. 13, 1789) ("Our new Constitution is now established . . . but in this world nothing can be said to be certain,except death and taxes").

Whether the mandate can be upheld under the Commerce Clause is a question about the scope of federal authority. Its answer depends on whether Congress canexercise what all acknowledge to be the novel course of directing individuals to purchase insurance. Congress’s use of the Taxing Clause to encourage buying something is, by contrast, not new. Tax incentives already promote,for example, purchasing homes and professional educations. See 26 U. S. C. §§163(h), 25A. Sustaining the mandate as a tax depends only on whether Congress

has properly exercised its taxing power to encourage purchasing health insurance, not whether it can. Upholding theindividual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.

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