A Tax By Any Other Name

-Submitted by David Drumm (Nal), Guest Blogger

Jack M. Balkin

Jack M. Balkin, Knight Professor of Constitutional Law and the First Amendment at Yale Law School, has a different perspective on the constitutionality of the Affordable Care Act. Professor Balkin argues that the individual mandate is a tax and the Constitution gives Congress the power to tax and spend money to promote the general welfare.

This necessarily and properly avoids the Commerce Clause.

While Congress and President Obama may not want to use the word “tax” for political purposes, for constitutional purposes, the Supreme Court has held that if a law raises revenues, it’s a tax. Americans have a choice, buy health insurance or pay a tax. The IRS has been charged with collection of the tax.

Like any tax law, this one has loopholes exemptions. People are exempt from paying the tax if they have health insurance through their employers, are on Medicare, are poor, are dependents, are in the military, live overseas, or it they have religious objections. The tax promotes the general welfare by making health services available and affordable.

Nor is the individual mandate a “direct tax“, such as property tax, or a capitation (“head tax”). The individual mandate is not a tax on the general population but only on those who don’t buy insurance and are otherwise not exempt. The individual mandate is a tax on behavior.

An interactive assessment of Judge Vinson’s decision can be found here.

H/T: NY Times, Amicus Curiae (Virginia v. Sebelius) (pdf).

57 thoughts on “A Tax By Any Other Name

  1. “The people Tribe is referring to, as I understand it at least, are ones who don’t buy insurance and go to emergency rooms for their care.”

    What’s the difference? If you’re predicating this legislation on the cost on the public, then show me the freeloading.

    And how is the Fed burdened by this sufficiently to lay claim to this hitherto unknown power?

    I’m all in favor of health care reform; I simply can’t abide this ‘sweep it under the rug via re-defining commerce’ mindless approach.

  2. Fried is not a liberal. The CRS Report discusses the equal protection issues. The rest of the post is opinion, so the readers here can judge for themselves.

  3. Bob,
    the freeloading are the people who do go to emergency rooms for care because they can’t afford insurance or don’t want to pay for insurance. They don’t have to file for BK in order to be a burden on the system. I have seen numbers between 30-45 million people who don’t have insurance. I will look further for numbers that reflect their impact. I just can’t type as fast you can!

  4. Bob, Esq.:

    So now you’re just going to ignore the exercise of power to force people to buy insurance from insurance carriers in their state so as to subsidize privately owned risk pools?

    How is that an argument on the constitutionality of the ACA?

    People have a choice, buy insurance and use the loophole, or pay the tax.

    Subsidizing the risk pool is the raison d’etre whether it is ACA or single-payer.

  5. Bob,
    Here is one estimate of the burden on all of us through increased premiums for people who are insured. “Families USA, which supports expanded health care coverage, found that about 37% of health care costs for people without insurance — or a total of $42.7 billion — went unpaid last year. That cost eventually was shifted to the insured through higher premiums, according to the group.” http://www.usatoday.com/money/industries/insurance/2009-05-28-hiddentax_N.htm Common Dreams put the cost at $125 Billion back in 2004. The Wall Street Journal in a 2008 article pegged the cost to taxpayers at 42.9 Billion. “The new study estimates the government pays 75%, or $42.9 billion, of the amount uninsured patients can’t pay — through Medicaid, the federal-state health-insurance for the poor and Medicare, the federal program for the elderly and disabled, as well as state and local taxes.” http://online.wsj.com/article/SB121963245880668193.html Those are some pretty big numbers Bob, but they don’t take into account donated services by doctors and hospitals and charities.

  6. Me: “So now you’re just going to ignore the exercise of power to force people to buy insurance from insurance carriers in their state so as to subsidize privately owned risk pools?”

    Nal: “How is that an argument on the constitutionality of the ACA?”

    Goes to the issue of specifically enumerated powers. There is no specifically enumerated power in the constitution to coerce people to buy something.

    Nal: People have a choice, buy insurance and use the loophole, or pay the tax.”

    Begs the question that the Fed has the power to force them.

    Nal: “Subsidizing the risk pool is the raison d’etre whether it is ACA or single-payer.”

    But the risk pool is outside the Fed’s control; thus not part of the tax coffers.

  7. “That cost eventually was shifted to the insured through higher premiums, according to the group”

    Guess what; that’s not a burden on the Fed.

    “The new study estimates the government pays 75%, or $42.9 billion, of the amount uninsured patients can’t pay — through Medicaid, the federal-state health-insurance for the poor and Medicare, the federal program for the elderly and disabled, as well as state and local taxes.”

    And what does that show? That shows what I’ve been saying all along; that Medicare and Medicaid are under funded and in need of reform.

    Further, you must qualify for Medicaid & Medicare; and once you do, you are ENTITLED to that coverage.

    Once again, the Fed is not ‘picking up the tab’ for people who are uninsured. Hospitals lose money and people go bankrupt.

  8. Paying FICA is paying a tax, collected by the fed and administered by the Fed.

    Telling citizens to enrich private corporations by purchasing their insurance is an exercise of power beyond right which no one has a right to.

  9. Bob,
    where does the increased funding for Medicare and Medicaid come from? The Feds. By the way, many of those hospitals are supported by state or local taxes and their taxes will increase when the hospital has to provide “free” service to the uninsured.

  10. Bob Esq:

    what if you had to buy it from the Federal government? Not a tax but an actual premium payment that you made every month to Federal Cross/Federal Shield for health care.

    Or would it actually be a tax even if you called it a premium?

  11. I don’t like Gore Vidal.

    But I think he gets it right about some of our presidents. Teddy Roosevelt was a thug and a brute, Bill Clinton was dangerous because of the surveillance police-state he established, and Alexander Hamilton was a traitor.

    Hamilton was indeed a traitor. No wonder FDR and the Democrats love him! Birds of a feather…

    Madison would come to recognize the Hamiltonian threat as being the very threat the founders threw off: abusive and arbitrary power. It would turn him away from the Federalists.

    Let’s look at the record.

    James Madison wrote to Andrew Sullivan in 1830. In his letter he is telling Sullivan that the general welfare clause triggered no great alarm or controversy during the conventions.

    “…these terms copied from the Articles of Confederation, were regarded in the new as in the old Instrument merely as general terms, explained & limited by the subjoined specifications; and therefore requiring no critical attention or studied precaution…”

    In other words Hamilton was making up crap.

    The term general welfare and defense as it appeared in the Articles of Confederation meant the same thing as it did in the new Constitution and in both cases the clauses were tied to the enumerated and implied powers.

    Hamilton was fantasizing about what the clause meant.

    Madison again:

    “That the terms in question [general welfare and defense] were not suspected, in the Convention which formed the Constitution of any such meaning as has been constructively applied to them, may be pronounced with entire confidence.”

    Madison tells Sullivan with complete “confidence” that the words in the GW cause harbored no suspected danger because the framers and ratifiers already knew the clause posed no danger in the Articles of Confederation. And the reason the clause and words posed no threat in that document was precisely because the GW clause and words were connected to specific powers.

    Madison continues:

    “For it exceeds the possibility of belief, that the known advocates in the Convention for a jealous grant & cautious definition of federal powers, should have silently permitted the introduction of words or phrases in a sense rendering fruitless the restrictions & definitions elaborated by them.”

    Here Madison says it is impossible to believe that the same people who were forming the constitution and FEARING an abuse of powers throughout the whole process of creating a new government would silently create a power which would allow the abuse they were attempting to forbid.

    In other words, the GW clause was and is to be harmless and does not grant powers in a way beyond how the power was exercised in the Articles of Confederation.

    Madison adds another proof:

    “that these terms were not understood in any sense that could invest Congress with powers not otherwise bestowed by the Constitutional Charter may be found in what passed in the first Session of the first Congress, when the subject of Amendments was taken up, with the conciliatory view of freeing the Constitution from objections which had been made to the extent of its powers, or to the unguarded terms employed in describing them. Not only were the terms “common defence and general welfare”, unnoticed in the long list of amendments brought forward in the outset; but the Journals of Congs. shew that in the progress of the discussions, not a single proposition was made in either branch of the Legislature which referred to the phrase as admitting a constructive enlargement of the granted powers…”

    Madison here is talking about the first congress after ratification. They were going to make any corrections to the Constitution which they had not noticed. The first Congress began to sift through the whole document specifically looking for words that might be misconstrued or lead to danger and abuse. And not one mention was made of the General Welfare and Defense clause. Madison’s point was that this was because it was viewed to be a power exercised like the power in the Articles of Confederation and could not be construed as an ENLARGEMENT OF GRANTED POWERS.

    Madison here admits congress has granted powers, but he admits that the GW clause does NOT enlarge them.

    Hamilton, FDR, and criminal types disagree.

    Obamacare enlarges them. Social Security enlarges them. Medicare and Medicaid enlarges them. Not only do these programs enlarge some powers, they enlarge some mythical powers which are not appointed to the federal government nor are listed in the Constitution.

    None of these programs have any connection to any of the subjoined (enumerated)powers. SS and Obamacare do not enlarge the power to coin money, or raise armies, or create a post office, and such. They are entirely new powers. And new powers cannot be added to the Constitution except by the amendment process.

    To do other wise is lawlessness and usurpation.

    Signed,

    Tootie, aka Group Tootie Inc., aka Tootie the Unfit.

  12. Chan L.: “what if you had to buy it from the Federal government? Not a tax but an actual premium payment that you made every month to Federal Cross/Federal Shield for health care. Or would it actually be a tax even if you called it a premium?”

    In that case it would be even for citizens for all 50 states and would resemble FICA. But again, it would have to be on the basis of income per the 16th

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