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Friday, June 29, 2012

How do you turn a mandate into a tax-just say the magic words

If you are the Chief Justice of the Supreme Court you have the power of magic words.

The individual mandate of ACA was called a mandate because , well, it was considered by the legislators as a mandate. The supporters of ACA claimed it was perfectly constitutional under the commerce clause because it-and as best I can tell almost everything-has something to do with interstate commerce and congress has the authority to regulate interstate commerce.

The Court ruled that the mandate was not constitutional under the commerce clause but it was when considered to be covered by the taxing authority of congress.But what about the Anti-injunction Act that says you cannot appeal a tax before it is paid?Well, in that regard it is not a tax.

When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master— that's all."

George Will , in his commentary, argued that the limitation of the commerce clause that he believed occurred with the Court's ruling was actually a major victory for the forces that are striving to limit the power of the federal government since so much of the growth of federal power has been carried out under the cover of generous interpretations of the commence clause. Will is hopeful that that trend may now be thwarted by this ruling.

On the other hand it may be the case that now the court has offered a precedent that allows a mandate to stand because the penalty for failure to comply with the mandate is a tax and congress can tax pretty much anything it wants and thereby makes mandates willy-nilly if they can be construed to "really" be a tax. Law Professor Ilya Somin makes that argument here.

Quoting Professor Somin:

Pretty much any other mandate could be magically converted into a tax by the same sleight of hand - so long as the penalty for violating it is a fine similar to the one that enforces the individual mandate. The danger here is not just theoretical. Numerous interest groups could potentially lobby Congress to enact a law requiring people to buy their products, just as the health insurance industry did.

In rejecting the federal government’s argument that the mandate is authorized by the Commerce Clause, the chief justice emphasized that the Constitution denies Congress the power to “bring countless decisions an individual could potentially make within the scope of federal regulation and ... empower Congress to make those decisions for him.” Yet he has allowed the government to claim that same power under the Tax Clause

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