Court skeptical of tax argument on mandate?

posted at 12:45 pm on March 26, 2012 by Ed Morrissey

And not just the conservative justices, either — and that spells trouble for Barack Obama and his defense of ObamaCare.  Philip Klein reports from the arguments being made at the Supreme Court today on the health-care reform plan, and the main argument for the constitutionality of its core individual mandate came under attack from the liberal wing of the court:

On the first day of oral arguments in the case challenging President Obama’s national health care law, justices seemed skeptical that the individual mandate should be considered a tax — one of the main consitutional defenses being offered for the law.

To be clear, today’s 90 minutes of oral arguments did not concern the underlying merits of the case, but whether an 1876 law called the Anti-Injunction Act bars the Court from ruling on the suit at this time. Under the Anti-Injunction Act, people cannot challenge a tax in court until after they have paid it, something that would effectively punt the issue until at least 2015. However, there is some overlap between this question and the idea of whether the mandate is a tax, and justices on both sides of the ideological fence expressed skepticism that the mandate should be treated as a tax.

“This cannot be a revenue raising measure, because if it’s successful, there won’t be any revenue raised,” said Justice Ruth Bader Ginsburg of the mandate.

Another liberal on the court, Justice Stephen Breyer, said of Congress’s description of the fine for non-compliance with the mandate, “They called it a penalty and not a tax for a reason.”

Why does this matter?  Congress cannot mandate a penalty for failing to engage in commerce — but it does have the power to tax.  Despite Obama’s protestations during the ObamaCare debate that the mandate was not a tax, his team has been forced to argue that it in fact does qualify as a tax, since that’s the only basis on which Congress can impose such a mandate.  Most people believed that the conservative jurists on the court would object to that definition, but this looks as though skepticism on the constitutionality of the mandate goes wider than first thought.  If Ginsburg and Breyer don’t buy the tax argument, the mandate will get overturned — and not by a 5-4 vote.

Alito closed the loop on the question:

Justice Sam Alito asked Verrilli whether he could point to another case in which courts identified something as not a tax for the purposes of the Anti-Injunction Act while still ruling it was a constitutional exercise of taxing power. Verrilli could not name any.

That doesn’t bode well for ObamaCare advocates.  If the mandate gets struck as a constitutional overreach, then regardless of whether the Supreme Court finds severability or not, the entire structure of ObamaCare collapses.  It will hasten momentum for its repeal, and insurers will switch sides to demand its complete rejection.

I’d tell you to watch for more signals, but of course, you can’t.  The Supreme Court rejected requests to televise arguments today, but two polls show that Americans overwhelmingly think that the proceedings should be viewable.  USA Today/Gallup shows that 72% want the arguments televised, including 70%+ among Republicans, Democrats, and independents.  C-SPAN, which would have been the likely broadcaster for such an event, has a poll showing 74% support for televised hearings — and 95% who want the Supreme Court to be more transparent in its proceedings in general.

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CanofSand on March 26, 2012 at 9:37 PM

Can, as righty points out, the ability of Congress to restrict the jurisdiction of the Court System in the US is, really, the main check the legislative branch has on the judicial.

Scott H on March 27, 2012 at 1:05 AM

2 things, it’s not even close to anything that can be called a Tax. Then there’s the Taxing Power the only direct individual taxing ability is upon income, the other Power is apportioned upon the States. That’s it for people.

The tax argument is so rediculous, even without going into Enumerated Powers, I can’t believe it survived 2 minutes.

John Kettlewell on March 27, 2012 at 3:36 AM

So if the Court finds that mandating the purchase of health insurance is necessary to make the regulation of the health system effective, then it is constitutional.

cjw79 on March 26, 2012 at 2:18 PM

No. It has to be proper as well. It’s improper for the federal government to force a free people who are otherwise commercially inactive to engage in a commercial activity.

writeblock on March 27, 2012 at 7:02 AM

I think all of the Justices simply want to get to the meat of the issue. Unfortunately, I don’t think this is an indication that they won’t buy the government’s arguments. They wouldn’t have even addressed the issue if one of the lower circuits had (wrongly) held that the mandate was actually a tax.

JDF123 on March 26, 2012 at 1:07 PM

But it does strip away one strand of the government’s argument–that the government’s power to tax legitimizes the mandate. The Court seems to be dismissing this line of thought. But the government still will argue that the government has the power under the Constitution to regulate commerce and to mandate whatever is necessary and proper to do this.

writeblock on March 27, 2012 at 7:24 AM

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Unless you are a foreign nation, one of the 57 states, or an Indian tribe, Congress may not mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.

Say goodnight Obamacare.

Roy Rogers on March 27, 2012 at 9:22 AM

In 1995, for the first time in nearly 60 years, the U.S. Supreme Court held that Congress had exceeded its power to regulate interstate commerce. In United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995), the Court ruled 5–4 that Congress had exceeded its Commerce Clause power in enacting the Gun-Free School Zones Act of 1990 (18 U.S.C.A. § 921), which prohibited the possession of firearms within 1,000 feet of a school.

In reaching its decision, the Court took the various tests used throughout the history of the Commerce Clause to determine whether a federal statute is constitutional, and incorporated them into a new standard that specifies three categories of activity that Congress may regulate under the clause: (1) the channels of interstate commerce, (2) persons or things in interstate commerce or instrumentalities of interstate commerce, and (3) activities that have “a substantial relation to interstate commerce … i.e., those activities that substantially affect interstate commerce.” The Court then applied this new standard to the 1990 Gun-Free School Zones Act and found that the statute could be evaluated under the third category of legislation allowed by the Commerce Clause. But the Court noted that the act was a criminal statute that had nothing to do with commerce and that it did not establish any jurisdictional authority to distinguish it from similar state regulations. Because the statute did not “substantially affect interstate commerce,” according to the Court, it went beyond the scope of the Commerce Clause and was an unconstitutional exercise of Congress’s legislative power. Because the statute did not “substantially affect interstate commerce,” according to the Court, it went beyond the scope of the Commerce Clause and was an unconstitutional exercise of Congress’s legislative power.

These will be the guidelines for ACA arguments after standing is established, particularly under Roberts.

Tell me how interstate commerce is substantially affected by the enactment of this law? Saying it controls one sixth of the economy is not a complete answer as it is not substantial. It is roughly 17 %. Not substantial enough.It’s not even close to a third and would equate roughly to 2.5 trillion in a 16 trillion economy.NOT substantial enough.

My opinion is that Congress has no power to regulate health care on this basis. This won’t be the only basis however because it’s unlikely that anyone can be forced to pay a penalty for something they have NOT purchased because the government said that they were required to purchase it.

DevilsPrinciple on March 27, 2012 at 11:10 AM

. . . it’s unlikely that anyone can be forced to pay a penalty for something they have NOT purchased because the federal government said that they were required to purchase it.

Fixed that for you.

Different from, say, a ticket with a monetary penalty for not carrying automobile insurance in states with mandatory insurance laws, the constitutionality of which is settled.

ugottabekiddingme on March 27, 2012 at 3:06 PM

justices seemed skeptical that the individual mandate should be considered a tax — one of the main consitutional defenses being offered for the law.

Yeah, it’s hard even for the most liberal judges to argue that what Pelosi, Obummer and Reid argued was NOT a tax during the bill’s passage is now a tax. on March 27, 2012 at 5:49 PM

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