How could this problem have been avoided? The U.S. Court of Appeals for the 6th Circuit, which also rejected the tax power justification for the mandate, suggested Congress “might have raised taxes on everyone in an amount equivalent to the current penalty, then offered credits to those with minimum essential insurance.” Alternatively, “it might have imposed a lower tax rate on people with health insurance than those without it.”
Judge Brett Kavanaugh, who dissented from a decision by the U.S. Court of Appeals for the D.C. Circuit that upheld the mandate on Commerce Clause grounds, argued that “just a minor tweak to the current statutory language would definitively establish the law’s constitutionality under the Taxing Power.” All it would take, Kavanaugh said, is a clarification that Congress is merely using the tax code to “incentivize certain kinds of lawful behavior,” as it routinely does, rather than imposing an outright requirement.
In other words, Congress could accomplish exactly the same thing by wording it a little bit differently. The response to that possibility from the states challenging the insurance mandate—that making income tax liability hinge on the purchase of health insurance amounts to “an unconstitutional direct tax”— seems pretty weak, given the myriad ways in which the tax code is used to encourage politically preferred actions such as adopting children, going to college, buying a house, giving to charity, driving an electric car, and even obtaining health insurance (through one’s employer).
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