The individual mandate
should have been ruled unconstitutional, by Robert G. Natelson, 4/5/16
ANALYSIS/OPINION:
Just one week after
the Obama administration celebrated the sixth anniversary of the passage of the
Affordable Care Act, many people are still shaking their heads at the Supreme
Court’s 2012 decision upholding the law’s individual mandate. How could the
court decide an unconstitutional financial penalty was somehow legitimate as a
“tax”?
As a constitutional
historian and former law professor, the question continued to nag me and
eventually drew me into the latest of my long series of investigations of the
Constitution’s true meaning. That investigation has just been published by Case
Western Reserve University Law Review.
After reviewing the
historical evidence, here’s what I found: Chief Justice John Roberts’ opinion
upholding the Obamacare penalty did not include just one mistake; it included
three.
The court admitted if the
Obamacare penalty is only a penalty, it should be rejected as an
unconstitutional overreach. The Constitution authorizes Congress “To lay and
collect Taxes, Duties, Imposts and Excises,” so if the court was right to label
the penalty a “tax,” a legitimate argument could be made in favor of the
mandate. Was the court correct to treat the Obamacare penalty as a “tax”? Not
at all.
When the Constitution uses
the word “tax,” it means a financial charge imposed mostly to raise revenue.
The Obamacare charge raises a small amount of revenue, but its main purpose is
to force people to buy health insurance. For constitutional purposes, that
disqualifies it as a tax. Deciding it was a tax was Justice Roberts’ first
mistake.
When the Constitution was
written, the American Revolution had been over for only four years. The
Revolution had been fought largely over the issue of how taxes differed from
other impositions. For the court to hold a penalty designed to coerce people is
really a “tax” violates a principle our Founders fought for.
The Constitution also says
federal laws imposing any “direct Taxes” must be written to split the revenue
from the states according to their respective populations. In other words, if
Illinois has twice the population of Colorado, then twice the revenue must come
from Illinois as comes from Colorado, irrespective of other circumstances.
This constitutional
requirement for federal direct taxes is called the “apportionment rule.”
The 16th Amendment
abolished the apportionment rule for income taxes but not for other direct
taxes.
The Obamacare law didn’t
provide for apportionment. Assuming the Obamacare penalty is a tax, would it be
direct or indirect? If direct, then the law’s failure to apportion it among the
states renders it unconstitutional, and the evidence suggests that’s precisely
what ought to have occurred.
Justice Roberts’ opinion
for the court shows puzzlement on this issue. Apparently, none of the parties
provided the justices with good evidence of what the Constitution means by
“direct taxes.” But when the Constitution was written, the division between
direct and indirect taxes was well understood. Direct taxes were levies on
earning a living (production) and on living itself. Indirect taxes were taxes
on consumption and certain other transactions.
Specifically, direct taxes
included not just income taxes, but also levies on property and businesses.
They further encompassed “capitations,” or head taxes. These were charges just
for living in a community.
Indirect taxes included
taxes on imports and levies on exports and on certain special transactions.
Indirect taxes also included “excises” — levies on consumption of goods. State
and federal sales taxes are examples of excises.
Given these categories,
Obamacare’s penalty is obviously direct. It is imposed on uninsured people just
for being in the country. Thus, it should have been apportioned according to
the Constitution’s standards for direct taxes, but it clearly wasn’t.
My third question was: If
the Obamacare penalty is a direct tax, then what kind of direct tax is it? The
evidence shows it is a head tax — what the Constitution calls a “capitation.”
Because the Obamacare penalty can be waived or reduced, Justice Roberts thought
it can’t be a capitation — because everyone doesn’t pay the same amount.
That was his third
mistake. When the Constitution was written, American tax laws often waived or
reduced capitations for people who were poor or who met other criteria. There
was no requirement that everyone pay the same.
In sum, the Founding-era
evidence shows the Supreme Court erred when it declared the Obamacare
individual health insurance mandate is a tax that does not need to be
apportioned among the states. The court should have ruled the mandate
unconstitutional.
Robert G. Natelson is a
fellow at the Heartland Institute and author of “The Original Constitution:
What It Actually Said and Meant.”
http://www.washingtontimes.com/news/2016/apr/5/robert-g-natelson-supreme-courts-makes-3-big-mista/?page=all#pagebreak
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