July 2, 2012

"The commentary on John Roberts's solo walk into the Affordable Care Act wilderness is converging on a common theme: The Chief Justice is a genius."

"All of a sudden he is a chessmaster, a statesman, a Burkean minimalist, a battle-loser but war-winner, a Daniel Webster for our times."

So begins the Wall Street Journal editorial, overstating the convergence and — big surprise — setting up a critique of the Chief. His approach to the taxing power, the editors say, is new and scarily unconstrained. They're disturbed that Congress can configure a tax that shapes behavior that it could not simply command, and yet they admit — as they must — that tax law does that all the time. Congress can't compel you to go into debt to buy a house, but you'll pay less taxes if you have a mortgage interest deduction. Congress can't require you to get married, but single taxpayers get stuck with higher tax rates. Why is this new area of taxing so shocking?
Congress has never passed a tax on a lack of gasoline or a tax on a failure to buy gasoline, any more than Congress can regulate inactivity under the Commerce Clause by telling people to buy gasoline or else pay a penalty. The reality is that Washington would love to regulate the ordinary economic choices that used to be beyond its purview, and now it will be able to abuse the ad hoc "tax" permit that the Chief Justice has given it.
Will it? Now that everyone's onto this game, the political debate will focus on it. What was unusual in this case was that the opponents of Obamacare were not alerted that the taxing power was the necessary basis for congressional power. Much effort was put into arguing that the commerce power was inadequate, and proponents of the law maintained that it not even serious to argue what has now become the Supreme Court's Commerce Clause doctrine. With the doctrine made explicit, in the future, if Congress tries to regulate individuals for their failure to engage in interstate commerce, everyone will talk about the taxing power. It won't be a stealth power, and it won't be so easy to use.

Moreover, there is a limit on the taxing power as articulated by the Chief Justice: At some point, what purports to be a tax — or what, in litigation, the government attempts to portray as a tax — crosses the line from incentive to compulsion. It actually becomes what Congress called the tax in this case: a penalty. If it's a penalty, Congress is not taxing but regulating, and it will need a power to regulate such as the (now clearly limited) commerce power.

Remember, the reason the so-called "penalty" was deemed a tax was that it was so weak. The amount to be paid to the federal government would usually be "far less than the price of insurance," so that it could often "be a reasonable financial decision to make the payment rather than purchase insurance," especially since the IRS is denied its usual means of enforcing taxes (like criminal prosecution). Roberts said it was a tax precisely because it would not work to compel people to buy insurance. If it worked as compulsion, it really would be a penalty — even if Congress called it a "tax" — and the taxing power would not suffice.

So that's the limit on the taxing power. It doesn't actually work to make people do what Congress wants. Now, it remains to be seen whether the Court will have the nerve to enforce that limitation. What if all the people with relatively low medical expenses make the "reasonable financial decision to make the payment rather than purchase insurance"? It will wreak havoc with the scheme of requiring insurance companies to sell to persons with pre-existing conditions without charging extra. Won't Congress have to up the "penalty" until it really does cease to be a non-penalty to get the desired compulsion? When that happens, will the Court draw the line?

111 comments:

Pogo said...

"When that happens, will the Court draw the line?"

They will draw the line that pleases their masters: straight, curved, or a complete circle. Whatever best draws the desired outcome.

The courts are a sham. Laws are bullshit. All their words just air.

Matthew Sablan said...

I thought that the penalty/tax DOES increase over time, and that, eventually, it will be a much higher figure than it currently is?

Matthew Sablan said...

But, I guess, ruling it both a tax, and an ineffective one at that, is probably the only way to slap the law in the face AND find it constitutional. So, needle threaded.

mun said...

Charles Lane, of the Washington Post, speaking on Fox News Sunday said that in his years of watching John Roberts as a lawyer he observed that while others played checkers, Roberts played Chess. Start applauding him you right wingers. He blocked use of the commerce clause, removed the opportunity of the lefties to run against the supremes, and re-hung the millstone of obamacare around the dems necks. Have you noticed that the main whitehouse talking point is "move on from healthcare"?

Bob Ellison said...

There should be a word for the feeling that there is already a word that you can re-define to support the legal argument you want to make. If you're the big guy on the SCOTUS, who's gonna argue?

Bob Ellison said...

I think that word is hubris.

vet66 said...

Rendell rightly referred to the ruling and healthcare as an albatross around the necks of those who voted for it. Even Pelosi stumbled recently by saying "it's a tax..penalty.." Even she can't keep the lies straight. They have managed to teach the vocabulary lesson of the day that penalty and tax are synonymous. What will they do next? Refer to both as a "fee?" Politicians have been outed for the smarmy liars, I mean purveyors of disingenuous rhetoric that is their stock-in-trade. Thanks Chief Justice Roberts. I think you just started draining the swamp. Now let's start discussing this 1% affected lie...

vet66 said...

Rendell rightly referred to the ruling and healthcare as an albatross around the necks of those who voted for it. Even Pelosi stumbled recently by saying "it's a tax..penalty.." Even she can't keep the lies straight. They have managed to teach the vocabulary lesson of the day that penalty and tax are synonymous. What will they do next? Refer to both as a "fee?" Politicians have been outed for the smarmy liars, I mean purveyors of disingenuous rhetoric that is their stock-in-trade. Thanks Chief Justice Roberts. I think you just started draining the swamp. Now let's start discussing this 1% affected lie...

Pogo said...

"Roberts played Chess"

Oh fer chrissake. He threw the game. It's the Black Sox, and he ain't no Shoeless Joe.

Henry said...

Roberts said it was a tax precisely because it would not work to compel people to buy insurance.

I've generally been a Roberts defender in this case (at least in terms of motive and substance), but I think we need some marginal analysis. The tax is certainly going to compel some people to buy insurance.* How many people does it need to compel before it turns into a penalty?

*For example, you have a condition that requires some regular labwork and prescriptions. Up to now you've paid out of pocket. The penalty means paying out of pocket will cost you just a little more than paying for insurance.

I am betting, however, that most people who pay the penalty will be young, healthy, people who aren't paying attention. It's a tax on stupid people. Except, by being stupid, they're smart! The actual stupid person is the careful, mindful person who wants the reassurance of health insurance even when they'd be better off paying out of pocket.

rehajm said...

Even with the escalation of the penalty, the penalty is still going to be far less than the cost of insurance...

Also, the government has no recourse if you fail to pay the penalty

rehajm said...

The penalty means paying out of pocket will cost you just a little more than paying for insurance.

Remember too with the pre existing condition clause you can do the cost/benefit analysis of any ailment when you acquire it. Because buying insurance on the way to the hospital is possible, those stupid people being smart are actually quite brilliant!

Henry said...

@rehajm -- from your link:

The penalties start in 2014 at only $95.00 and the IRS is prohibited from enforcing any penalties or interest if you don’t pay. (my emphasis).

So essentially, no one every needs to pay it, ever. You just have to have the fortitude to ignore your annually increasing balance.

Matthew Sablan said...

Wrong. The text states:

(2) SPECIAL RULES.—Notwithstanding any other provision of law—
(A) WAIVER OF CRIMINAL PENALTIES.—In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.

So, you are only waived if you pay, but are late. Then, you are only protected from criminal prosecution penalty. So, if you refuse to pay, you still can face criminal penalties, and you can still be hit with civil penalties.

Henry said...
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Henry said...

Matthew -- Good clarification.

Matthew Sablan said...

Roach's link solely deals with those unable to pay due to financial hardship, not simply electing not to pay. In fact, this section of the text:

"EXEMPTIONS.—No penalty shall be imposed under subsection (a) with respect to—‘‘(1) INDIVIDUALS WHO CANNOT AFFORD COVERAGE.—"

Appears on page 328. The following ("‘‘(A) WAIVER OF CRIMINAL PENALTIES.—In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.") actually appears on page 336. Roach's site misleads you into thinking the two quotes are related. They are not.

Bob Ellison said...

Henry's and rehajm's comments lay bare the misunderstanding about this issue: it's not insurance, but health care, that we're arguing about.

How would the average voter define "insurance"? Those who support Obamacare obviously think it means a payment system intended to pay for primary and prophylactic care in addition to catastrophic problems. Those who (like me) hate Obamacare think the word "insurance" should mean something recognizably close to its original definition, which mostly means catastrophic coverage.

The kids-under-27 and pre-existing-condition items in Obamacare are juicy treats in an otherwise horrid meal. Where's tort reform? Where's admission that the meal is socialist health care, with doctors and nurses working for the government?

Jane said...

Two thoughts:

In general, I support the "it's a tax" reasoning -- but the one issue that makes me wary are the waivers. The situation is analgous to a new tax of X% applied to everyone, with a "tax credit" for buying insurance, and thus no more compulsory than a tax credit for a hybrid car is compulsory. But in such a case, no one gets the tax credit for having a "good reason" -- however defined -- for not engaging in the behavior the tax credit encourages. This is like a child tax credit which people can prove they're infertile can take because they would have had children if they were able to.

Be that as it may, here's the larger question:

Imagine that O'care is scrapped in favor of a system of vouchers. Everyone gets a voucher in the amount necessary to buy a basic, high-deductible, medically-necessary and proven care-only policy, based on age and sex. At the same time, a grand bargain is struck on tax and entitlement reform and overall budget-balancing, and the new tax structure pays for these vouchers, but not explicitly (no special FICA-like tax).

Is the voucher system (and the portion of the overall federal tax that fund it) constitutional? Are you being "forced" to buy healthcare because you're a fool not to make use of the voucher?

Scott said...

Ever since the FBI figured out that they could nail Al Capone on income tax evasion, the feral government has embraced taxation as a mechanism of social control.

I don't see how the health insurance tax cough cough individual mandate cough is novel in that regard.

That's why we will never see the end of income taxes. It provides a pretext for the government to insinuate itself into anyone's life for virtually any reason. Without that, people would be free, and the government finds that inconvenient.

bgates said...

everyone's onto this game

I dispute that. Republicans are, sure, and high-functioning Obama voters like yourself, at least for the time being - but Obama's people were already out over the weekend telling his supporters the lies they ache to hear.

a psychiatrist who learned from veterans said...

TNC links to an article on Roberts which reports on his view of the methods of a successful chief justice, in essence to be collegial. This is not to abandon our preferences but for so long the court has seemed the bastion of the persecuted, the woman seeking abortion, the minority seeking schooling, the homosexual. But should we cast ourselves as a persecuted minority or rather should we seek to live or fall in democracy, a land of the people.

traditionalguy said...

This was the Gettysburg of our times.

Had Roberts been General meada (no relation) he would have had a bright idea when Picketts charge began on day three and ordered Hancock's brigade to withdraw and Cemetary Hill and Little Round Top to be simultaneously abandoned to prove that he was a genius with a better plan than every other General and planned to withdraw to line closer to Washington.

Marshal said...

"Congress can't require you to get married, but single taxpayers get stuck with higher tax rates."

This is not true. Two singles with the same income pay less tax than they would as a married couple.

gerry said...

but Obama's people were already out over the weekend telling his supporters the lies they ache to hear

His supporters is the defining word. The base is overjoyed, but they cannot win an election alone.

Independents generally oppose the Obamatax; Republicans HATE it. Indies + 'pubs = Obama single term.

amba said...

This seems like a fairly unique case of a penalty being a tax, for the simple reason that people who do not have health insurance must be given care in the ER of a public hospital. Therefore, the public is paying for the healthcare of the uninsured. This is not the case with most other things people choose not to buy.

That said, to me the cleverness of Roberts' decision is handing the Republicans a nifty weapon (taxes are hated!) and the Democrats a millstone. He also avoided the accusation that, in a divided country, the Supreme Court is politicized one way or the other.

LilyBart said...

Also, the government has no recourse if you fail to pay the penalty

If this is true, and I'm not sure it is, how have they solved the problem of 'free ridership'?

The 'healthcare' law was actually about control, not heathcare. That's why reading the bill wasn't important to congress. They can change the particulars anything they want. What they voted for was control over the heathcare system.

They can make all the pretty promises they want - I predict you won't like the actual results of their control.

Marshal said...

"rehajm said...
Even with the escalation of the penalty, the penalty is still going to be far less than the cost of insurance...

Also, the government has no recourse if you fail to pay the penalty"

This will remain true for about 3 days. Now that it's been held constitutional the bureaucrats will immediately begin "interpreting" it into the program they wanted to pass.

Michael K said...

A voucher-like system, which will probably be part of Ryan's Medicare reform, assuming a GOP president and majority in both houses, would be limited to purchase of insurance. If anyone chose not to use it as intended, unlikely in the Medicare age group, it would remain in the Treasury. The Obamacare tax is fundamentally different because it would NOT go toward insurance. It has no useful purpose that I can see and is probably intended as cover for the real motives.

I can't see the purpose of young people buying insurance under Obamacare. They do not anticipate need and have other uses for their money. It will erode what is left of public responsibility. One problem is that many incidents involving young people are accidents and they will be postop by the time they are conscious and able to think of insurance. Then it is too late unless the bureaucrats make insurance coverage retroactive.

Henry said...

I dunno, traditionalguy. I think it is more like the Battle of Glorietta Pass with the left playing the role of Sibley. The victorious general is forced to retreat due to the destruction of his supply chain.

Curious George said...

Althouse logic fails you:

"that tax law does that all the time. Congress can't compel you to go into debt to buy a house, but you'll pay less taxes if you have a mortgage interest deduction. Congress can't require you to get married, but single taxpayers get stuck with higher tax rates. Why is this new area of taxing so shocking?"

The logical equivalent is that Congress would tax you if you didn't buy a house, or didn't get married. You examples are both axing less do an action, not taxing more do to an inaction.

You teach? Sheesh.

BAS said...

I guess a Supreme court ruling is like a song, it means what you want it to mean. Once you publish it, you know longer own it, and people will assign the meaning they want.

Sloanasaurus said...

There is a medieval term called Corvee which was a demand by the Lord for the vassel to perform services in lieu of paying a tax. The Corvee was the "civilian" equivalent to the Scutage, which was the tax a knight could pay to avoid military service. The corvee has fallen out of use in modern times because it didn't work well.

However, it seems that under John Roberts new interpretation of the Constitution, the Corvee/Scutage could come back in a new form to force the welfare state upon citizens. When the government finds that doctors do not want to treat Medicaid patients (because they get paid so little), and when we start to run out of doctors, because smart people will chose different professions that pay more), the Corvee will come back with a vengeance. It seems to me that under Roberts new interpretation of the Constitution, the Feds could compel a doctor to provide free services to Medicaid patients in lieu of a tax (a new tax that would be levied on them if they did not provide the care).

Further as the government becomes more desperate for money as the welfare state bloats, the corvee/scutage could be used to provide all kinds of services (lawyers will be required to provide 25% of their time to the indigent); businessmen will be required to provide free products.

Of course all of these efforts will fail miserably as they run contrary to the human condition. But John Roberts has given a license to liberals to at least try such policies.

Now a good liberal would accept Corvee as a substitute for national service, This is the same patriotic theme used by the Reds in in the Soviet Union. After all why shouldn't we all do our part to help society! The government isn't forcing you to be a shoemaker... they are just giving you a nudge...an incentive.

But corvee won't work for the same reason Communism doesn't work. But, now with John Roberts, corvee/Communism could actually be instituted by a mere 51 votes in the Senate.

Oh how far we have come! Thanks Justice Roberts.

Chip S. said...

Congress can't compel you to go into debt to buy a house, but you'll pay less taxes if you have a mortgage interest deduction.

From the time the first federal excise tax was levied (on whisky, I believe) it has been the case that people who bought non-taxed stuff paid less in taxes than the people who bought taxed stuff. This is trivially true.

If it is so clear that the power to tax whisky implied the power to tax non-consumption of whisky, then the 16th amendment should not have been necessary. Because taxing income is just a way of taxing whisky-plus-not-whisky.

deborah said...

Then it is too late unless the bureaucrats make insurance coverage retroactive.

Wouldn't it be simpler to garnish their wages...on a sliding scale, maybe?

JackOfVA said...

I'm sure the IRS is working on rules that will collect the penalty/tax whatever.

For example, suppose you pay your income tax liability but refuse to pay the health insurance "penalty." How does the IRS apply the payments? Do they first apply it against the insurance penalty and then your income tax? If so, then you will be deemed to have underpaid your income tax which will subject you to all sorts of interest and penalties.

Even if the IRS only uses civil measures again non payment of the insurance penalty, it presumably will be able to levy on bank accounts, apply liens, etc. and in general make your life miserable until you pay all they believe you owe.

deborah said...

For the cost of the medical care, that is.

phx said...
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bagoh20 said...
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dreams said...

"Won't Congress have to up the "penality" until it really does cease to be a non-penalty to get the desired compulsion? When that happens, will the Court draw the line?"

I don't think they will do that and so it will force us into single payer which is really what the Democrats and liberals want.

Free health care is really going to be expensive.

This election is our last chance to repeal Obamacare.

bagoh20 said...

The effect is that the people see that they cannot trust.

The controlling principle is flexibility, and its use is primarily to ratchet power away from the people and toward the government. Flexibility is never utilized to withdraw power - it is always used in the long run to burn another bridge on the road to tyranny.

Roberts has rewarded a lie and the people know it, the ambitious will see an opportunity to lie more and the patriot will see the futility of expecting the system to stop it.

Calypso Facto said...

"Won't Congress have to up the "penality" until it really does cease to be a non-penalty to get the desired compulsion? When that happens, will the Court draw the line?"

And do we get to challenge the law each and every time the "tax" is increased, until the court deems it has crossed over into "penalty"?

paul a'barge said...

Roberts is Souter in loafers.

Boosh 41:Souter
Boosh 43:Roberts

No more Booshes.

Here is what is sad: we're going to have to live with Mutt Roberts for a very, very long time. This means that whenever anything important comes up to SCOTUS, this mutt is going to swing the vote.

We're F'ed.

tiger said...

I used to hold the USSC in a somewhat high regard; always figured that they kinda, sorta knew what they were doing - Roe v. Wade and 'I know pornography when I see' not withstanding - but the Obamacare decision has me concerned for the future of our nation. And no, I am not being overly dramatic.

Not only do I think the Roberts is wrong, he ruled on something not brought before the Court and now allows the government force us into making purchases of products they deem 'for our own good' or else be taxes for not doing so.

Roberts farked up, it's that simple and we, the general public, will be paying for his mistake.

deborah said...

But corvee won't work for the same reason Communism doesn't work. But, now with John Roberts, corvee/Communism could actually be instituted by a mere 51 votes in the Senate.

Oh how far we have come! Thanks Justice Roberts.


How possible is it that Roberts intended this as a wake-up call to citizens?

tiger said...

Sorry for the above typos, getting a new laptop on Thursday; this one is missing keys, has some that jam and can't keep up with my thoughts.

elkh1 said...

Genius or not, the Obama-koolaide-drinkers have stopped gloating long before the weekend was over.

Mick said...

Are you that dumb "law prof"? You compare Obamacare as a tax to home ownership, or marital reductions in taxes? Duh Those are tax deductions designed to influence behavior that is beneficial to the citizenry, not a tax placed on one just for living. Have you ever paid a monetary tax (not an opportunity cost)for not buying anything? This decision is Marxism through and through-- and it is apparent by the strained reasoning and mental gymnastics needed to make it, that Roberts was threatened or blackmailed.
No wonder you voted for the Usurper (born British of a British subject father--- 28 US 99, 126 (1830)). You exemplify the argument for those that believe college is a waste of time--- I can see that your students probably don't learn anything of use, and probably to their detriment. You sit in your tenured Ivory tower, completely disconnected from the real world. Kagen's sitting in on this decision was a violation of the utmost criminal degree, but of course you also fail to talk about that. You are a fraud.

carrie said...

If it is a tax, are the waivers legal? Can a federal tax be imposed on a state by state basis, etc.? I think it would be great if the waivers were invalid.

dreams said...

The reason why the Democrats can lie and get away with it is because they get elected by the undecided voters and the undecided voters are the most uninformed voters.

In a few years when they are suffering the consequences of their votes, they will be clueless that it was a result of their own ignorance, their own votes. And so in the next election they will once again fall for the Democrats' demagoguery and vote for the party that "cares" about the poor people.

Colonel Angus said...

He blocked use of the commerce clause, removed the opportunity of the lefties to run against the supremes, and re-hung the millstone of obamacare around the dems necks. Have you noticed that the main whitehouse talking point is "move on from healthcare"?

This. Obamacare is in large part why the Tea Party swept in a GOP majority in the House in 2010. Yes there are aspects of the law that are popular but overall its not. Not to mention the additional debt that we are going incur.

Harry Reid said its now time to move on to job creation. Well that time was three and a half years ago but instead they gave us this abomination.

Chuck66 said...

"The reason why the Democrats can lie and get away with it is because they get elected by the undecided voters and the undecided voters are the most uninformed voters."

Such as "(Republican candidate) wants to get rid of social security". or remember in 2008 when the Democrats were saying the McCain will implement a military draft.

edutcher said...

I agree with mun and others that Roberts, whatever his motives, did the Demos no favors, but there are plenty of people calling Roberts anything but a genius.

As for those who are "disappointed" in the Court, I can only ask where they might have learned history.

Pogo said...

When that happens, will the Court draw the line?

They will draw the line that pleases their masters


Por favor, who exactly are their masters?

elkh1 said...

Por favor, who exactly are their masters?

Those who scream the loudest: the leftists, the MSM.

Pogo said...

K street power brokers, the financial district, moneyed donors, public unions, Democrats and some Republicans, etc. They have all the power.

You and I have little or none. I end up having my vote cancelled by busloads of "local Minnesota residents" who cannot read English and are instructed how to vote.

I'm sore tired of it.

edutcher said...

You've been taking America's Politico seriously, haven't you?

Pogo said...

So what inroads have we made with Roberts as a "conservative" justice?

J.R. said...

The tax begins in 2014 at $95 or 1% of income (income is not defined, that could be AGI, taxable, etc.) and rises to $695 or 2 1/2 % of income in 2016. So at an income of $60,000 that would be $600 in 2014 and $1,500 in 2016. Those amounts are not enough to incentivize the purchase of health insurance. It seems the smart economic decision will almost certainly be to pay the penalty until you have a high cost illness, and then purchase insurance. It does not seem likely that health insurance as a private industry can survive.

edutcher said...

SCOTUS has always been a dud, going back to Dred Scott.

The power in this country is still with the people, but only so long as they're willing to think for themselves (too much work for some) and to get off their behinds and take a stand.

Chip Ahoy said...

The logical equivalent is that Congress would tax you if you didn't buy a house, or didn't get married. You examples are both axing less do an action, not taxing more do to an inaction.

Congress does tax in those two situations so it is the equivalent.

And you snark? Sheesh

Pogo said...

Despite all the shit and idiocy and corruption over the past 3 years, Obama right now has an even chance of being reelected.

And by the rules noted in the 13 Keys to The White House, Roberts just handed it to BHO. ("Policy change: The incumbent administration effects major changes in national policy.")

t-man said...

Bagoh - You perfectuly captured why I feel nothing but contempt for Roberts's opinion:

Roberts has rewarded a lie and the people know it, the ambitious will see an opportunity to lie more and the patriot will see the futility of expecting the system to stop it.

edutcher said...

Then why are all the Democrats trying to run from this as hard as they can?

Zero's in huge trouble - he should be 20 points ahead, instead of dead even in a lot of polls skewed toward the Democrats, he's having trouble raising money, and none of his ploys to gin up the base (which he shouldn't have to do) are working.

Colonel Angus said...

It does not seem likely that health insurance as a private industry can survive.

This is a feature and not a bug. Obama along with most liberals wanted a single payer system but as that wasn't politically feasible, they crafted the next best thing. My personal opinion is that private insurers won't necessarily be put out of business, but rather we will see a few large insurers survive and become quasi govermental agencies much along the lines of Freddie and Fannie.

Pogo said...

"Zero's in huge trouble.

I hope so, but I am far less certain now that Roberts handed Obama Key number 7.

"When five or fewer statements are false, the incumbent party wins. ".
Now he's got only five, thanks to Roberts. Obama wins.

JOhn said...

The WSJ article is a good one. If you thought the nanny state was bad now, it's going to get much worse. Never underestimate the ability of politiicans to abuse their power. That's why the federal government is supposed to have limited powers, but Roberts has tossed all that aside.

Saint Croix said...

the one issue that makes me wary are the waivers.

I think you can make strong arguments that the waivers are unconstitutional. It's setting up a privileged class that is above the law. As long as you have connections (or pay into our campaign funds) the law does not apply to you? What the fuck?

I think anyone denied a waiver can and should sue over it.

rehajm said...

Matthew Sablan wrote...

In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.

So, you are only waived if you pay, but are late. Then, you are only protected from criminal prosecution penalty. So, if you refuse to pay, you still can face criminal penalties, and you can still be hit with civil penalties.


Really? In your plain english explanation I think you're trying to make a distinction between 'failure to timely pay a penalty' and 'failure to pay a penalty', yes? But if that's the case, I don't see where the statute defines the definition of 'timely'- couldn't timely mean 'forever late'? What's to stop everyone in the 'failure to pay group' from just claiming they are in the 'failure to timely pay' group?

Bender said...

the reason the so-called "penalty" was deemed a tax was that it was so weak. . . . So that's the limit on the taxing power

Where in the Constitution is this relativistic sliding-scale conception of the Taxing Power? From this description of Roberts' opinion, it sounds like he has adopted O'Connor's "undue burden" approach from the abortion cases, which itself was created out of whole cloth.

Is that the test now? That a financial obligation for refusing to comply when government orders you to do or buy something is a tax unless and until it imposes an undue burden?

And what is the dividing line between a "weak penalty, therefore a tax" and a "too burdensome penalty, therefore a non-tax"? Where in the hell in the Constitution do we find this dividing line??? Where does Roberts?

And is that dividing line one that applies to everyone, or is there a different dividing line for different people depending upon their own personal financial situation? A few hundred dollars might be no burden at all for one person making $30,000 per year, and it might be a crushing, can't pay the rent, burden for another person making $30,000. Is it then a tax for one and not-a-tax for the other?

Michelle Dulak Thomson said...

amba,

This seems like a fairly unique case of a penalty being a tax, for the simple reason that people who do not have health insurance must be given care in the ER of a public hospital.

Actually, that's not so. I'm really tired of the assumption that all uninsured people are necessarily freeloaders and deadbeats. I was uninsured for about a decade, and when I needed medical care, I paid for it myself. Including the time that I did end up in the ER, after a bicycle crash.

Matthew Sablan said...

"But if that's the case, I don't see where the statute defines the definition of 'timely'- couldn't timely mean 'forever late'? What's to stop everyone in the 'failure to pay group' from just claiming they are in the 'failure to timely pay' group?"

-- Those are questions of facts that would have to be solved in court if the government decided to bring you to trial.

Colonel Angus said...

Zero's in huge trouble - he should be 20 points ahead, instead of dead even

If memory serves, Carter was in a dead heat and in some polls up by 3 over Reagan but was destroyed at the voting booth. Some argue it was Reagan's last debate performance although logic would suggest that with the state of the economy at the time, anyone was preferable to Carter. Fast forward to present day where Obama's incompetence superseded Carter, no small achievement, and you would think Romney would be ahead by 6-7.

Despite the image Obama won a landslide, he didn't do nearly as well as the hype would indicate, particularly against a lackluster candidate like McCain. I suspect it will be very close.

Matthew Sablan said...

Also, I find it a weak defense that: "Well, you could just defraud the government!" should be grounds for us saying it is not a serious enough tax that we should concern ourselves with it. That's just disingenuous; we should not live with a law where defrauding the government is a valid, accepted strategy..

Michelle Dulak Thomson said...

Colonel Angus,


If memory serves, Carter was in a dead heat and in some polls up by 3 over Reagan but was destroyed at the voting booth. Some argue it was Reagan's last debate performance although logic would suggest that with the state of the economy at the time, anyone was preferable to Carter. Fast forward to present day where Obama's incompetence superseded Carter, no small achievement, and you would think Romney would be ahead by 6-7.


Well, in 1980 there was also the complicating factor of John Anderson. Not gonna be a tolerably serious third-party candidate this time.

Saint Croix said...

SCOTUS has always been a dud, going back to Dred Scott.

Not on free speech. They have been very, very good on free speech. It's the one area where they deserve applause.

rehajm said...

Matthew Sablan wrote...

"EXEMPTIONS.—No penalty shall be imposed under subsection (a) with respect to—‘‘(1) INDIVIDUALS WHO CANNOT AFFORD COVERAGE.—"

The following ("‘‘(A) WAIVER OF CRIMINAL PENALTIES.—In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.") actually appears on page 336. Roach's site misleads you into thinking the two quotes are related. They are not.

So help me understand- I'm now looking directly at the statute. The 'waiver of criminal penalty' verbage is in (2)(A) of subsection (g) of the statute of section 5000A, while the exemptions are part of subsection (e). It looks to me (g) applies to the whole section, not just subsection (e), no?

Marshal said...

"Saint Croix said...
the one issue that makes me wary are the waivers.

I think you can make strong arguments that the waivers are unconstitutional"

This should be true, but I suspect such a ruling will not be forthcoming. Governments grant favored tax status all the time, for example as an inducement to locate business in a particular location. Usually those are state governments, but given that our judiciary acts as if anything should be allowed if we can think of even a tangental precedent it doesn't seem like too much of a stretch.

Smilin' Jack said...

Won't Congress have to up the "penality" until it really does cease to be a non-penalty to get the desired compulsion? When that happens, will the Court draw the line?

Before screwing with health care, Congress should have settled these issues by enacting that widely discussed penalty for not buying broccoli. Besides, I happen to like broccoli, and I'm fine with taxing the shit out of people who don't.

Matthew Sablan said...
This comment has been removed by the author.
Matthew Sablan said...

Er, let me clarify.

There is a rule about not having the money to afford it.

There is also a special rule about no criminal penalties for late payment.

They are separate rules. Which gets confusing.

Bender said...

The tax begins in 2014 at $95 or 1% of income . . . and rises to $695 or 2 1/2 % of income in 2016

And then it goes up even more substantially after that.

But instead of this case being heard in 2012, let's say that it is 1912. Today, $95 might not be that burdensome for most people, but in 1912, the average yearly income was less than $1,000, with most people living paycheck-to-paycheck, so $95 was a month's pay, $95 was the difference between being current on your home and foreclosure.

So, then, although apparently $95 is low enough to be a "tax" today, would $95 be too high and, thus, not be a tax in 1912?

Is that the Constitution we have, a Constitution that changes, an inherently ambiguous document with ever-changing goal-posts, where something is a tax and then not a tax and then a tax again based merely on the passage of time?

Roberts' opinion is so disgustingly outrageous and offensive to reason and liberty that it amazes that one man could do so much constitutional damage.

Steve Koch said...

Even if the gov takes over medicine, we won't run out of docs. The smartest people will tend to avoid medicine but they will be replaced by a new generation of docs who will be significantly stupider than the previous generations of docs.

Technology is showing enormous promise to improve medicine significantly but ObamaCare will reduce this improvement by:
* lowering the quality of docs
* rationing health care
* destroying innovation
* reducing efficiency
* politicizing medicine

People deserve the gov they vote for.

Bender said...

Not on free speech. They have been very, very good on free speech. It's the one area where they deserve applause

Unless you wish to engage in prolife speech outside an abortion clinic, in which case the First Amendment does not apply and laws prohibiting speech are permissible.

And, of course, you cannot engage in free speech on the steps of the United States Supreme Court building. It is against the law to do so.

Bender said...

where something is a tax and then not a tax and then a tax again based merely on the passage of time?

Of course, in Roberts' own fevered imagination, the mandate penalty is "not a tax" and also "is a tax" within the passage of a few paragraphs of his own opinion.

But, please, everyone -- do not try to understand or rationalize this decision. You cannot understand or rationalize or attempt to find the reason in something that is inherently irrational and lacking in reason. Roberts' decree here is nothing less than an arbitrary and capricious fiat that is justified, not by any logic or legal reasoning, but by raw judicial power. It is so because he says it is so, period.

bagoh20 said...
This comment has been removed by the author.
bagoh20 said...

You can see the genesis of the problem when it became necessary to have highly trained lawyers interpret some of the simplest and clearest English ever put in a controlling government document.

It takes a powerful and creative mind to screw that up.

Saint Croix said...

Governments grant favored tax status all the time, for example as an inducement to locate business in a particular location.

Nobody would have standing to sue in that case. But if you're denied a waiver, you would definitely have standing to sue.

Also "an inducement to locate business in a particular location" has an obvious benefit to the community (jobs).

What is the benefit to the community that you don't have to pay your taxes? And why do you get that benefit and I don't? Or if you construe it as a penalty, why am I getting penalized and you're not?

At a minimum a lawsuit would force the administration to go public as to its criteria for who gets a waiver and who does not get one.

Pastafarian said...

Getting a tax break for getting married isn't the same as having to pay a new tax for not getting married.

A single person's taxes aren't increased because they choose to remain single -- they're the same today, after deciding not to get married, as they were yesterday.

Unlike this situation, where your taxes actually go up if you choose not to do something. It's without precedent.

So at what point will Roberts decide that a tax becomes a penalty? 5% of income? 10%? From what part of the constitution or the Federalist Papers is he coming up with this number?

Umpire my ass.

Taxes and penalties are the same fucking thing. A conservative (that is, cautious) reading of the law would tell you that if a penalty isn't allowed for a given behavior, then neither is a tax.

So now your defense of Roberts is: Sure he's stated that the tax power is unlimited; but

a) It's been that way for a while

and

b) They wouldn't dare use this unlimited power in a politically unpopular way.

The fact that a state of affairs has existed for a while doesn't make it right. Where in the constitution did the authors, who had just fought a bloody war with the superpower of the time over TAXATION, state that the power of taxation is limitless?

And as for b), it used to be that we had this document that told us what the government could do to us, and it could do no more, regardless of popular sentiment at any one time. But then constitutional law experts (including professors) ran out of TP and decided to use that document to wipe their asses.

mikesixes said...
This comment has been removed by the author.
Marshal said...

"Saint Croix said...

Nobody would have standing to sue in that case. But if you're denied a waiver, you would definitely have standing to sue."

People who own businesses in the same jurisdiction could apply for the same deal and sue when denied. The local economy benefits from their jobs just as much as it benefits from jobs created by a new business.

Darcy said...

I'm really tired of the assumption that all uninsured people are necessarily freeloaders and deadbeats.

I'm really tired of it too! Especially since we're also told so people are struggling with the cost of care that they go bankrupt or lose everything. So which is it? ?Also the "bankrupt" charge indicates to me that they have at least attempted to pay for their care, or if they haven't at least tried then tell me why should I feel sorry for them that they went bankrupt??

The truth is that MANY pay their bills without the help of insurance and actually find that it's cheaper than paying for insurance overall. Because unless you have a catastrophic illness - it is. Or was.

Bender said...

They have been very, very good on free speech. It's the one area where they deserve applause

Note also that the ObamaCare Tax violates free speech, as well as medical privacy.

Under this "tax" scheme, you are now required to speak when you otherwise might wish to remain silent, you are required to tell the government what is your own private business -- you are required to report to the IRS whether you have the mandated level of insurance coverage or not.

Bender said...

A lot of us, when we received the nosy census forms asking a lot of imposing questions, sent it back with only the number people residing there, anything beyond that being none of the government's business.

How are people going to like having their tax returns asking personal questions about their level of insurance coverage. Do you think that the IRS will accept "none of your damn business" as an answer?

Or how do you think they will like, in order to get a waiver and thus be able to exercise their freedom to be left alone, they will be required to provide a bunch of personal information to the government so that some bureaucrat can arbitrarily decide if they get a waiver or not?

Dust Bunny Queen said...

Another thing that no one is addressing and overlooking is how the IRS is going to know if you have insurance or not.

The reporting mechanism. Will it be a mandatory reporting from the insurance companies? Will you be forced to submit a proof of insurance with your income taxes? Will your doctor be transmitting not only your personal medical information to Big Brother but also whether you pay cash for your treatments or use insurance.

The invasion of privacy is concerning. Plus the cost of all of this additional "reporting" is only going to compound the cost of insurance and healthcare.

More unintended consequences!!

cubanbob said...

As a practical matter, should the republicans win the trifecta the first thing they should do is eliminate all waivers, eliminate the exempt classes and shift the most onerous aspects of bill to January 2013. Then they should NOT adjust the the AMT. Let it hit immediately and the hardest hit will be the blue states.

Democrat voters need to feel a sharp acute and immediate pain to finally get in to their heads what comes arounds goes around. When the pain is really felt, the conversation of clipping the wings of government will become truly bipartisan.

Methadras said...

Are people high? Urkelcare was dead, but no one knows why Roberts changed his vote. It was dead 5-4 and he breathed bizarre life to it by siding with it 5-4. He had the kill in his sights right in front of him. Instead he decided to be nuanced, and try to walk around to its backside and kill it there giving it an opportunity to be missed. Guess what? When you have a killshot, TAKE IT!!!

Methadras said...

Michelle Dulak Thomson said...

amba,

This seems like a fairly unique case of a penalty being a tax, for the simple reason that people who do not have health insurance must be given care in the ER of a public hospital.

Actually, that's not so. I'm really tired of the assumption that all uninsured people are necessarily freeloaders and deadbeats. I was uninsured for about a decade, and when I needed medical care, I paid for it myself. Including the time that I did end up in the ER, after a bicycle crash.


I am tired of the notion that 30 million uninsured people is a reason to hobble and shackle the remaining 280 million people to make sure they are insured. Does that even remotely sound sane to you? Nevermind the fact that this abdominal lie of a law is allowed to exist, but that idea that you can pass a nearly blank piece of paper and call it law and they will write it up later as they go along is astounding that it ever occurred.

Ask yourself even this one question, why is a 3.8% imposed transaction tax on all profits from home sales starting in 2013 - 2014 in this bill? Why is a tax like this even in a healthcare bill? Oh wait...

http://www.realtor.org/small_business_health_coverage.nsf/docfiles/government_affairs_invest_inc_tax_broch.pdf/$FILE/government_affairs_invest_inc_tax_broch.pdf

Steve Koch said...

bagoh20 said...
"You can see the genesis of the problem when it became necessary to have highly trained lawyers interpret some of the simplest and clearest English ever put in a controlling government document."

Exactly so. Lawyers, including Althouse, pretend that case "law" is law, but it isn't. Laws are created by legislatures elected by the people. Federal case law is by unelected judges and the precedents it sets are not legally binding to judges in the future.

A legal system is an amazing concept but the lawyers have screwed it up. Those who are blessed with scientific, engineering, and mathematical ability (or at least common sense and logic) need to step in and figure out how we can fix the mess.

The idea that we have given absolute power (with no effective check) to human judges is a huge mistake that needs to be corrected.

"It takes a powerful and creative mind to screw that up."

Maybe not. People are naturally corrupt and it is extremely difficult to construct systems that overcome that natural tendency to corruption.

edutcher said...

Saint Croix said...

SCOTUS has always been a dud, going back to Dred Scott.

Not on free speech. They have been very, very good on free speech. It's the one area where they deserve applause.


Disagree - strongly.

Flag burning is free speech (if you applied to assemble peaceably (sp?), it would fail, so they plugged it in elsewhere to make it fit)?

Stolen Valor is free speech?

Sorry, free speech has become like the Equal Protection clause, a catchall for anything anybody with an agenda and enough votes wants to squeeze in it.

PatCA said...

Is this a debate we really need to have -- another one in an endless series -- or just another symptom of our descent into maddening legalism? Our legal system rivals that of Dickens' Bleak House for its dense and elusive meanings. Or a more topical comparison would be Greece, where I read everyone spends their time plotting either to escape government or to cash in.

Is that a derecho coming towards me or another dark SCOTUS penumbra?

Chip S. said...

It seems to me that the example of the home-mortgage-interest deduction actually works against the argument that the government has commonly taxed "doing nothing." To see why, it is necessary to consider how we got to where we are now.

The Congress never simply decided one day to exempt interest payments on home mortgages from taxable income. Instead, up until the 1986 tax reform, interest payments on all types of consumer debt were tax-deductible. Now, for most consumer items, eliminating interest deductibility on debt incurred to buy those items does not affect their prices. But this is assuredly not true in the case of owner-occupied housing.

Because of the inelasticity of the supply of land, repealing the tax deduction for home mortgage interest would cause a significant decline in house prices. So in all likelihood, the main reason the Congress left this deduction in place when it removed all other interest deductions is that it did not want changes in tax policy to reduce the wealth of people who did nothing to change their consumption patterns.

What's different about the ObamaRoberts Tax is that its intent is clear--and clearly not driven by considerations of either revenue or a refined definition of "true" income. Its intent is the masssive extension of the federal regulatory power.

Which, of course, makes it a regulation.

Joe said...

Based on all that's come out, it appears that Roberts believed the individual mandate to be unconstitutional, but knew that without a severability clause, the entire law would then fall. He couldn't handle that and so simply invented a new law and new constitutional authority for congress.

The irony being that he did exactly what the liberal critics have long accused him of being; an activist judge.

Contrary to liberal accusations, an activist judge is not one who goes against precedent, but one who invents new rights and rewrites the law and constitution to get the intended results. An activist judge is one who pretends words clearly saying one thing mean something entirely different. Roberts did this about as egregiously as any other supreme court justice. He isn't a genius; he's an unprincipled lout who puts his own ego above principle (he was tested and found wanting. Turns out, John Roberts has no integrity.)

Sloanasaurus said...

Before Justice Roberts wrote his insidious Obamacare decision, I was still a free citizen in this country - at least the Constitution protected my rights.

Now the federal government has the power to do anything. They can force me to change jobs. Force me to enter a different profession. Force me to raise my kids a certain way. Force anything. All they have to do is structure a tax that I would have to pay if I did not comply with what ever the government wanted me to do, thus making not doing the action uneconomical.

Harve3 said...

"The power to tax is the power to destroy" -Dan'l Webster/John Marshal, 1819. As true today as yesterday.

Calypso Facto said...

Trying to establish an apolitical reputation for the court by issuing an obviously politically contrived opinion somehow equates to genius?

Hagar said...

The AHCA may not survive even to New Years as individual senators see the writing on the wall and abandon ship to swim for shore.

a psychiatrist who learned from veterans said...

@bagoh20

A brilliance of the Constitution is its relative simplicity. Perhaps it's not the SC so much as it is, to paraphrase Pelosi, about what we might call the Christmas present, the ACA. What were having is the excitement and disappointment of unwrapping it and finding out what the 'present' is.

Al&Bea said...

As I understand, the wording of the mandate tax provides no enforcement. If so, why are they hiring 17,000 new IRS agents??

a psychiatrist who learned from veterans said...

AI&amp - for tax compliance.

BarryD said...

"Moreover, there is a limit on the taxing power as articulated by the Chief Justice: At some point, what purports to be a tax — or what, in litigation, the government attempts to portray as a tax — crosses the line from incentive to compulsion."

...thus providing millions of dollars in future revenue for attorneys, and many more amusing cases for the Supreme Court.

Barton's hypothesis seems good enough to be theory, at least. Maybe it could be a theorem.

"many
legal outcomes can be explained, and future cases predicted, by asking a very simple
question, is there a plausible legal result in this case that will significantly affect the
interests of the legal profession (positively or negatively)? If so, the case will be decided
in the way that offers the best result for the legal profession."

http://trace.tennessee.edu/cgi/viewcontent.cgi?article=1007&context=utk_lawpubl

Ralph L said...

Democrat voters need to feel a sharp acute and immediate pain to finally get in to their heads what comes arounds goes around
More importantly, independents need to learn not to trust Democrats with power. That's the main reason I preferred repeal to the Court striking it down.