SCOTUS and Obamacare: Mandate Semantics
THE Supreme Court’s ruling that the health-insurance mandate is constitutional because it differs from a tax only in a pointless semantic sense is a bitter defeat for those of us who love pointless semantic distinctions. It has been a great disappointment to me to learn that you can’t (for example) get out of paying real-estate taxes on your house by claiming it’s really a very large, very heavy car, because the law isn’t actually a word game. I like word games! But John Roberts emphasises in his opinion that the court doesn’t treat the question of whether the mandate is a penalty or a tax as a word game:
In answering that constitutional question, this Court follows a functional approach, ”[d]isregarding the designation of the exaction, and viewing its substance and application.” United States v. Constantine, 296 U. S. 287, 294. Pp. 33-35. …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 penalties 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 payment 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 unlawful. 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 insurance. See New York v. United States, 505 U. S. 144, 169-174. Pp. 35-40.
Kidding aside, one of the most profound reasons for relief at yesterday’s ruling was the recognition that victory in a deep ideological and political struggle, of tremendous consequence for Americans in need of health care, would not be awarded on a technicality. It was widely recognised that had the ACA explicitly phrased the “shared responsibility payment” as a tax rather than a penalty, it would have been clearly constitutional for the same reasons established in the fight over the constitutionality of Social Security in 1937, grounded in the federal government’s authority to tax and to spend for the improvement of the general welfare. The Democratic authors of the ACA chose to phrase it as a penalty rather than a tax for political reasons. If the fact that the word “tax” is unpopular among voters while the word “penalty” is viewed as suspect by the Supreme Court had led to universal-health-insurance legislation being disqualified for purely linguistic reasons, given the partisan nature of the match, the partisan affiliations of the referees, and the extraordinary real-world stakes, there would’ve been political hell to pay.