ACA constitutionality doesn’t hinge on what you call it
TL;DR I got it right, you may now send me your offers for lucrative legal consulting work. Note: I am not a lawyer.
I’ve had a little series of posts, first and second, arguing that the tax code already punishes you for failure to purchase health insurance and health care. (Because any tax credit can be framed as an equivalent tax increase + tax penalty.) Thus, the individual mandate should be constitutional in the same way that existing credits are, because practically and economically speaking, it’s the same thing as many credits already in the tax code, including health insurance and health care credits.
I’ve only read the syllabus of the Supreme Court decision so far, but it looks like John Roberts bought the argument that something can’t be unconstitutional just because it’s named the wrong thing:
4. CHIEF JUSTICE ROBERTS delivered the opinion of the Court with
respect to Part III–C, concluding that the individual mandate may be
upheld as within Congress’s power under the Taxing Clause. Pp. 33–
(a) The Affordable Care Act describes the “[s]hared responsibility
payment” as a “penalty,” not a “tax.” That label is fatal to the appli-
cation of the Anti-Injunction Act. It does not, however, control
whether an exaction is within Congress’s power to tax. In answering
that constitutional question, this Court follows a functional approach,
“[d]isregarding the designation of the exaction, and viewing its sub-
stance and application.” United States v. Constantine, 296 U. S. 287,
294. Pp. 33–35.
(b) Such an analysis suggests that the shared responsibility
payment may for constitutional purposes be considered a tax. The
payment is not so high that there is really no choice but to buy health
insurance; the payment is not limited to willful violations, as penal-
ties for unlawful acts often are; and the payment is collected solely by
the IRS through the normal means of taxation. Cf. Bailey v. Drexel
Furniture Co., 259 U. S. 20, 36–37. None of this is to say that pay-
ment is not intended to induce the purchase of health insurance. But
the mandate need not be read to declare that failing to do so is un-
lawful. Neither the Affordable Care Act nor any other law attaches
negative legal consequences to not buying health insurance, beyond
requiring a payment to the IRS. And Congress’s choice of language—
stating that individuals “shall” obtain insurance or pay a “penalty”—
does not require reading §5000A as punishing unlawful conduct. It
may also be read as imposing a tax on those who go without insur-
ance. See New York v. United States, 505 U. S. 144, 169–174.
(c) Even if the mandate may reasonably be characterized as a
tax, it must still comply with the Direct Tax Clause, which provides:
“No Capitation, or other direct, Tax shall be laid, unless in Proportion
to the Census or Enumeration herein before directed to be taken.”
Art. I, §9, cl. 4. A tax on going without health insurance is not like a
capitation or other direct tax under this Court’s precedents. It there-
fore need not be apportioned so that each State pays in proportion to
its population. Pp. 40–41.
On a more serious note, this law will have huge positive consequences for my family, and I’m grateful that it held up in court.
I was going to be particularly upset to suffer giant practical problems in my own life just because someone failed to open their search-and-replace function in a word processor and change “penalty” to “tax.” I’m very happy we weren’t screwed on that technicality.
While I haven’t read the whole decision yet, it looks like those looking for limitations on federal power will be happy with the discussion of commerce powers and the precedents established in that area.