Saturday, June 30, 2012

A radical departure? Congress can tax inactivity

There is a mystery to John Roberts' opinion upholding the mandate under Congress's taxing power while ruling it an unconstitutional exercise of Congress's Commerce Clause power.  With regard to the Commerce Clause, Roberts adopted wholesale the plaintiffs' argument that it's a radical and dangerous departure for Congress to "create" commerce or "compel" inactivity.  Yet Roberts finds that Congress does have the power to tax inactivity, notwithstanding that none the precedents he cites as support for upholding the penalty for not buying insurance do tax inactivity. He is up-front about this apparent paradox:
There may, however, be a more fundamental objection to a tax on those who lack health insurance. Even if only a tax, the payment under §5000A(b) remains a burden that the Federal Government imposes for an omission, not an act. If it is troubling to interpret the Commerce Clause as authorizing Congress to regulate those who abstain from commerce, perhaps it should be similarly troubling to permit Congress to impose a tax for not doing something (p. 41).
Yet some sleight of hand remains in the way he deals with claimed precedents under the Commerce Clause or under the taxing power. With regard to the Commerce Clause, the lack of precedent for a universal purchase mandate is dispositive for Roberts. Yet he brushes past the lack of that kind of precedent in Congress's exercise of the taxing power:
Congress’s use of the Taxing Clause to encourage buying something is, by contrast, not new. Tax incentives already promote,for example, purchasing homes and professional educations. See 26 U. S. C. §§163(h), 25A. Sustaining the mandate as a tax depends only on whether Congress has properly exercised its taxing power to encourage purchasing health insurance, not whether it can. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one (p. 42).
Encouraging to buy is not the same as penalizing not buying. So the precedents wouldn't hold if you regard the government using coercive means to discourage a form of inactivity as an absolute departure, and an impermissible one.

But Roberts doesn't. For him, the crucial difference is between a command and an incentive.  He does not want to open the door to criminal sanctions being imposed for failing to engage in certain activity; he does not object to financial disincentives for such failure:
although the breadth of Congress’s power to taxis greater than its power to regulate commerce, the  taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individuals to do as it directs. An individual who disobeys may be subjected to criminal sanctions. Those sanctions can include not only fines and imprisonment, but all the attendant consequences of being branded a criminal: deprivation of otherwise protected civil rights, such as the right to bear arms or vote in elections; loss of employment opportunities; social stigma; and severe disabilities in other controversies, such as custody or immigration disputes.

By contrast, Congress’s authority under the taxing power is limited to requiring an individual to pay money into the Federal Treasury, no more. If a tax is properly paid, the Government has no power to compel or punish individuals subject to it. We do not make light of the severe burden that taxation—especially taxation motivated by a regulatory purpose—can impose. But of a tax nonetheless leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice (p. 43).
Roberts made a choice. The departure involved in a federal "command" to purchase:  no good. The departure involved in taxing inactivty: good. The degree of coercion imposed by a tax doesn't scare him.

The notion that Congress would go crazy with purchase mandates once they are authorized is a shibboleth. Roberts accepted it as a real danger, and imposed his own limiting principle: the only legitimate way Congress can discourage inactivity is to charge for it.

UPDATE 7/1: I think it's clear that the answer to the question in this post's title is no: to rule that Congress can "mandate' a purchase through the tax power alone is not a radical departure. In a must-read, Jack Balkin (who lit the path that Roberts took, legitimating the mandate under the taxing power) places Roberts' decision in the broad context of the Supreme Court's historical role: to legitimate, moderate, and sometimes, for  a season, resist changes to the social contract wrought by Congress and/or the Executive.  Balkin puts Roberts'  mandate ruling squarely in the "moderate" (v.) camp:
Roberts' reasoning captures the dual nature of judicial legitimation. He has said to Congress: "You may compel people to enter into commercial transactions like the insurance mandate, but you may not do so as a direct order under the commerce power. Instead, you must do it through the taxing power, always giving people the choice to pay a tax instead. And as long as you structure the mandate as a tax, the people's rights are protected because they always have the right to throw their elected representatives out of office if they don't like the tax." Roberts' opinion thus harks back to a basic source of legitimacy enshrined in the American Revolution: "No taxation without representation." The converse of this proposition, Roberts tells us, is that if you have been represented, and if you can punish your representatives for passing new taxes, your rights have been respected. This logic accepts the new social contract but redefines it in a way more palatable to conservatives.
Balkin's take on the Medicaid ruling is similar in kind. He fits it too under the rubric of his own dictum:  "Legitimation is Janus-faced: it establishes what government can do by establishing what the government cannot do."

1 comment:

  1. Good analysis...I had similar difficulty understanding Roberts' justification for taxing inactivity when reading the official document. But I'm still unclear about the precedent (or lack thereof) for taxing inactivity. He mentions the capitation....but I'm not sure I quite followed him. He said the at one point, Congress contemplated a tax just for existing? So because they "contemplated" such a tax, taxing inactivity is therefore within the sphere of constitutionality? And are there any other precedents for taxing inactivity? Thank you so much!!