It is NOT a tax! It IS a Tax! The Government is confused on the health care mandate.
There is a fascinating article in the NY Times on the Obama Adminstration's defense of the the insurance mandate that was part of the recent health care bill.
As you may recall, Congress passed a law requiring all citizens to have health care insurance coverage - or face a penalty - which will go into effect in 2014. This is a controversial clause and was immediately challenged in court by 20 states as a broad over-reach of federal power.
The plaintiffs claim that there is no precedent, nor no Constitutional authority, for the Federal Government to require individuals to purchase a good or service from a private entity.
Opponents contend that the “minimum coverage provision” is unconstitutional because it exceeds Congress’s power to regulate commerce.
“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.
In their lawsuit, Florida and other states say: “Congress is attempting to regulate and penalize Americans for choosing not to engage in economic activity. If Congress can do this much, there will be virtually no sphere of private decision-making beyond the reach of federal power.”
When Congress was debating this law the charge of over-reach was prominent and public. And Congress chose to defend itself by wrapping the law in the mantle of the Commerce Clause (and failing that, the General Welfare clause.)
Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nation’s economy.
Some opponents also charged that this was, in effect, a new tax that was being levied - a charge that the Administration vehemently denied.
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”
When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”
So, now that this case has gotten to court, what is the defense that the Justice Department is using to meet this challenge?
In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.
This is a startling position, and one that I think is flawed:
First, this directly contradicts the basis of the law as stated by the creators - Congress and President Obama. One thing the Supreme Court does regularly in researching a case is to review the minutes of the debates in Congress to try and identify "intent". Clearly the record will show that Congress intended this to be an extension of the Commerce Clause powers. By switching to a Tax clause defense, the Justice department is implicitly weakening the Commerce clause argument - which is the foundation of the law. I would expect the Court to see through this veil and get back to the central issue of does this law go beyond the powers implied in the Commerce clause.
Second, by claiming that this mandate is a tax the Government has opened itself up to a review of the definition of a Tax and an examination of whether the mandate fits that model. I would argue that it does not. My reasoning is that, by definition, a tax is something that is paid to the governmental agency that has levied the tax. In this case the tax, i.e. the mandate to buy insurance, is paid directly to private corporations. This has never been done before and clearly is a huge stretch in the definition of a tax.
I find this case very interesting from the aspect of Constitution constraints on Federal Government powers. I can not predict how this will go in court - other than to say that it will go all the way through to the Supreme Court - but I think it is a critical case in re-establishing limits on Federal authority.
What do you think?
