February 24, 2016
Can Government Tax You For "Being?"
Early in his article, [January 25, 2016 The Weekly Standard, “Unchecked Power” Eric] Felton
examines the two big ObamaCare cases and what they mean for further concentration of power in the federal government. These cases illustrate how “the tax code can be used to sidestep the Constitution's restraints on Congress.” In NFIB v. Sebelius, the Court ratified an “unchecked power” to tax; Chief Justice Roberts “wasn’t worried, it seems, about opening a vast domain of congressional power by allowing Washington to tax the infinite number of things that people don’t do.”
And in King v. Burwell, Felton quotes Justice Kennedy during oral arguments: “It seems to me a drastic step for us to say that the department of Internal Revenue and its director can make this call one way or the other when there are -- what? -- billions of dollars of subsidies involved here.”
[. . .]
Hear, hear! But just as regulations can be dressed up as taxes, taxes can be disguised as something other than taxes. This may be a minority opinion, but one of the problems with Roberts’ NFIB decision is not that he created a tax where none had existed, but that he failed to recognize the tax that was already right there in the law: the mandate to buy health insurance. Yes, insurance premiums are paid to private companies, but in ObamaCare the payment of premiums is required by the government in furtherance of a government objective. That seems like a tax. So Roberts legislated from the bench, and rewrote the law.
On July 6, 2012, shortly after the decision in NFIB was handed down, The Wall Street Journal ran “A Short History of Congress's Power to Tax,” a short opinion piece by historian Paul Moreno. It doesn’t seem to be still available at the Journal, nonetheless I found it here. Concerning ObamaCare’s individual mandate, Moreno writes that to “any sentient adult, it looks like a ‘capitation’ or head tax,” and he laments that the Court’s dissenters didn’t explore that point. Moreno covers some of the same ground as Felton, including the same court cases. And concerning NFIB: “Justice Roberts has confirmed that there are no limits to regulatory taxation as long as the revenue is deposited in the U.S. Treasury.”
But what if Roberts had found that the mandate to buy health insurance was indeed a tax? That wouldn’t be any more incoherent than finding that the penalty is a tax. If government can define anything as a tax, then the mandated payment of insurance premiums can be a tax, too.
From the standpoint of law, language, and logic, the rulings in NFIB and King aren’t a total disaster, but they’ll suffice until the total disaster rolls in. The big reason to repeal Obamacare is not just that it is awful law and economics, but that the Court ratified it with very bad decisions, creating very sobering precedents.
[. . .]
And that is precisely why Americans needs to amend the Constitution to limit, i.e. to check, the government’s power to tax. [. . .]
Government may have taken a pass for now on taxing our being, but our tax system can make one wonder just how free we Americans really are.
February 23, 2016
The ‘Unchecked Power’ to Tax
By Jon N. Hall