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My contribution to this Obamacare debate


I just got up to speed (OK, it's Friday afternoon and I skimmed) on the ping-pong between Nick Rizzuto and Meredith Jessup over the Obamacare decision (scroll down to get the rundown). As best I can tell, they're arguing about what exactly a tax is and if the decision really expanded Congress' tax power. I'll leave the nuance mostly to them, but I will make this contribution via Richard Epstein over at Hoover:

The Mandate: A Penalty or Tax?

The Chief Justice looks more like a batter seeking to execute a suicide squeeze than an umpire calling balls and strikes. At this point, labels no longer matter. What matters is whether Congress imposed a tax or imposed a penalty. In answering that question, the Chief Justice ignores the wide range of institutional safeguards that are required before taxes could be imposed.

The Obama administration went out of its way to say that it did not plan to impose any taxes, in part because of its no-new taxes pledge, and in part to get a favorable route for the Act through the Congress. That route did not lie through the House of Representatives, where all tax measures must originate. These procedural steps are part of the structural Constitution. Umpires usually try to use consistent definitions because otherwise they are well aware that there is a risk in equivocation: The political actor, meanwhile, can first pick this and then that definition to suit his convenience.

But it gets worse. The basic theory of taxation is that we are all in it together. The point here is that the taxes are generally imposed to create some form of public good, to which all citizens should be required to contribute. We have, unfortunately, relaxed that notion of taxation so that transfer payments from A to B fall within a tortured definition of what counts as the “general welfare of the United States,” where the last four words are constantly ignored today. But a second constraint still remains—namely, that the taxes come from all segments of the population.

The moment we allow a tax targeted just on those people who wish to opt out of the mandate on the ground that they get a raw deal from the government, the power of selective abuse is increased, thereby allowing a majority of the population to impose a so-called tax on whatever subgroup of the population it wishes to tax for the benefit of another. Put otherwise, it is not easy to think of any traditional tax or credit that hits only those who don’t buy healthcare insurance on their own accounts. The extra flexibility is one unfortunate way in which the Chief Justice as statesman clashes with the Chief Justice as umpire.

Okay, take a breath. If you didn't read that and instead skimmed it because it's Friday afternoon (I love you!), here's Epstein's conclusion (emphasis added):

The original intuition was that general welfare of the United States only covered standard public goods, leaving all welfare functions to the state. That position was obviously abandoned. But in its place, the rule was that the taxation power could never be used as an indirect form of regulation that Congress could not impose directly. That is exactly the argument that Chief Justice Roberts holds for the Commerce Clause, but at no point does he address the connection between the two clauses.

The entire edifice that underlies the ACA on this critical mandate thus rests on a constitutional house of cards. If the legislation fails under the Commerce Clause, there is no reason to resurrect it by engaging in extravagant machinations with the words “tax” and “penalty.” No umpire would accept such a shaky result. No statesman should either.

Yes, you've just been Epsteined -- via being Seidled.

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