Is The Individual Mandate Unconstitutional?
The big news story today seems to be that more than a dozen state attorney generals are putting together a legal challenge to the individual mandate in the recently passed health care reform. Here's what Bill McCollum of Florida said:
"It forces people to do something -- in the sense of buying a health care policy or paying a penalty, a tax or a fine -- that simply the constitution does not allow Congress to do," McCollum said at a news conference in Tallahassee.
McCollum, who is seeking the Republican nomination to run for Florida governor, said the healthcare reforms would add $1.6 billion to Florida's spending on the Medicaid health program for poor people.
I'm no legal scholar, but I cannot see how handling the mandate through the 1040 tax form is any less constitutional than, say, tax deductibility of IRA contributions. Start from a baseline where everyone is presumed to have contributed to the maximum amount to an IRA. The IRA deduction operates as:
If no evidence of a retirement contribution is provided, add $x to taxable income. If evidence of a retirement contribution in the amount of $y is provided, add $x minus $y to taxable income.
So tell me what's different about treating the individual mandate as follows. Start from a baseline where everyone is presumed to have obtained private health insurance. The individual mandate can operate as:
If no evidence of health insurance is provided, add $x to taxable income. [$x might depend on state of residence, number of dependents, and the level of income.]
Everyone is then presumed to be enrolled in Medicaid unless they show evidence to the contrary. The tax code already conditions on choices people have made. Prefunding health expenditures seems little different from prefunding retirement income. If a court struck down the individual mandate, how could it not strike down all of the other aspects of the tax code that condition on individual choices?
Obviously it's arithmetically
Obviously it's arithmetically the same, but legally/formally it's different. (A 2.5% tax increase on everyone, then a corresponding credit for nearly everyone, would be different politically as well). Of course you could re-engineer the mandate in just this way, but by the time the Roberts court got around to overturning it, maybe the votes wouldn't be there to fix it.
But that's really not much better if you're a corporate made man like Chief Justice Roberts: you'd still be forcing the insurance companies to insure expensively-sick people, but not forcing healthy people to buy insurance. That's why the Roberts court won't overturn it, not because law or precedent would stop them.
Up is down.
Are you kidding? The difference is obvious. Unless, of course, the mandate *is* a tax on everyone and there is a deduction for those that have insurance.
Not sure a bill that increased taxes for 200M taxpayers with 180M getting the deduction, netting $xB would have passed. Or the transparency that this accounting would have provided for the increased scope of the Fed Gvt.
I'm not being pedantic about this. There is a material, non-semantic difference here.
Seriously?
The baseline for IRA contributions doesn't add money to your income.
The baseline for HC insurance would add money (increase your taxes absent proof of HC insurance) to your income.
I'm amazed that people are attempting to justify this nonsense.
They thought of that, and
They thought of that, and from what I can see that is the way it is structured. You pay a tax of $x, unless you have proof of health insurance then you deduct that amount. That's why it's contitutional and that's why the IRS is asking for more money so they can enforce it.
Its not a tax on income or
Its not a tax on income or measured by income. It is more of an excise tax. It could have been written the income tax by lowering income levels at which taxes kick in and then having this work like a deduction or credit if you purchase, but that is not how it was written. So I don't think any income tax analogy is relevant. Historically individual citizens have failed in challenges to such taxes. However, the Supreme Court has never ruled on a state's 10th amendment challenge to federal spending mandates, to my knowledge, so that may be an unprecedented question.
The isssue....
I'm no legal scholar, but I cannot see how handling the mandate through the 1040 tax form is any less constitutional than, say, tax deductibility of IRA contributions. Start from a baseline where everyone is presumed to have contributed to the maximum amount to an IRA...
That "baseline" is the fallacy.
Congress does not mandate that anyone make a contribution to an IRA -- much less that everyone make a maximum contribution. The IRA tax deduction is an incentive to encourage voluntary behavior. No punitive tax applies to those who don't invest in an IRA.
In contrast, here Congress is mandating that everyone buy a commercial product (regardless of need for it -- some people can certainly afford to self-insure in full, many others can afford to self-insure with only the supplemental protection of catastrophic coverage).
The tax is punitive and applied only to those who don't buy the commercial product.
Can you think of any precedent for this -- Congress mandating that citizens buy a commercial product as a condition of citizenship?*
That's the constitutional question.
Note that while the "tax" is described as "income tax" as part of the scheme to protect its legality, it lands even on people who have zero income tax liability and have no obligation to file an income tax return.
That's rather different than IRA rules, and pretty odd for an income tax.
(*Don't anyone say "auto insurance" -- that is contingent on the voluntary decision to buy a car, not a cost of existing as a citizen.
The analogy for autos would be a new Detroit stimulus in which Congress mandates that everybody buy a new "made in the USA" car, enforced by imposing a $30,000 head tax on every citizen, with a tax refund given in the amount of the purchase price of any car one buys.)
There's a legal debate about all this over at Volokh. (More than one, actually.)
Due Process/Takings
It may be a due process/takings problem. You are requiring someone by law to purchase a product that does not return equal value. Unlike a tax, in which the government takes money for use of the common good, in this case the government is requiring you to transfer money to a private entity for their profit. You are not being allowed a hearing before a unbiased tribunal to establish the value of the exchange.
What about Social Security?
Social Security seems like the obvious example. Everyone is mandated to pay into a national retirement insurance scheme. You're only allowed out if you're part of another grandfathered retirement insurance system (anyone besides some school teachers?). What's the interstate commerce argument for social security?
Is the Supreme Court really ready to go after health care, and Social Security in the process?
If Social Security is OK because it involves payments to the government and not companies, what about privatization schemes from a few years ago? Would it be any better for the Supreme Court to decree that a public plan would be OK, but not a public/private system?
The Social Security difference
Social Security seems like the obvious example. Everyone is mandated to pay into a national retirement insurance scheme...
Social Security is pure tax-and-spend. The Supreme Court decisions upholding it did so holding it is *not* any kind of "insurance" program.
Helvering v Davis on the SS payroll taxes: "The proceeds of both taxes are to be paid into the Treasury like internal revenue taxes generally, and are not earmarked in any way".
There's an interesting story here. FDR and the creators of SS were worried that it would be struck down as unconstitutional. One of the Supreme Court Justices (IIRC Cardozo) sent a back-channel message to the White House, "use the power to tax". The Social Security Act was then carefully constructed so the tax and benefit provisions were segregated (in Titles II and VIII) and did not interact. The government then argued in court that the payroll tax was simply a tax, and the benefits were a legally separate spending program for the general welfare.
This created the interesting situation where ...
* On the stump, across the country, FDR and SS supporters explicity sold SS to the public by describing it as an "insurance program", "contributory insurance", "an annuity program based on insurance principles", etc.
... while simultaneously ...
* In the courts the govt was explicitly arguing that Social Security was *not* insurance of any kind, all the claims to the contrary by FDR and the govt had no more legal force than political claims by any other politicians, and that Social Security was a pure tax-and-spend program with the govt completely free to spend the payroll tax revenues in any way it liked.
Politicians do things like this!
The courts accepted the latter argument, as per the quote above. And, of course, they were right. Social Security is a pure tax-and-spend program, and no matter how much in taxes you may have paid into it, the govt can take away your benefits at any time just as it can cut any other spending program. (Flemming v Nestor.)
Nor, very obviously, are benefits caclulated on any kind of actuarially sound insurance basis, but purely on the basis of politics, as evidenced by the fact that the program is $16 trillion underfunded, and participants going forward from today are going to get back from it less than they put in. But I digress.
All that is very different from an "insurance" program.
Legal bottom line: The precedent of Social Security provides no legal support whatsoever for the argument that the government can compel individuals to buy a commercial product as a requirement of citizenship. It is a pure tax-and-spend program.
Taxation
I agree with your sumation that SS is a tax and spend govt. program. The govt. can only grow by how much money and power it can grab using the strong arm of the law and the basic fear factor of imprisonment for non compliers. What ever happened to freedom of choice...seems to get eroded every time the govt. needs more money.
What is needed here is for working people saying a big fat resounding,"No"!! "No, I will not buy health insurance". The govt. is counting on us all falling into line like sheep; instead of standing up for our freedom like warriors. Organization will be needed to stop this affront on our hard earned money. There will always be a govt. fighting for the impoverished, not to benefit the impoverished but to take money from the working people and not give it to the poor.
Church's used to be the vehicle of savior for the poor; but since the Progressives have been slowly destroying the power for good of religion, the poor have to depend more and more on the govt. which is not a human organization, but a monstrous machine steam rolling all into zombies.
Amazed
I don't understand how people think. This law states that the Federal government requires that you buy a product from a private company. That is a fundamental deviation from people having inalienable rights to freedom. An inalienable right to freedom means you can't be coerced to do ANYTHING you don't want to do; unless you commit a crime; which is always interfering with other's rights, so you deserve rights when you act in this manner. This right has been violated many times before; the draft, required auto insurance, requirement that you buy into social security, etc. And none of those were Constitutionally approved. But because we have had the nanny state for so long, most citizens assume it is perfectly okay for the government to deprive you of more and more of your rights.
It won't be long now before this country will be manifesting almost all the aspects of Animal Farm and 1984. And by the time that scenario of undeniable, most will have no idea how they got there. It is just like a person who invents the fantasy that "little" "white" lies are okay. Who before long is telling huge whoppers on a regular basis. I didn't understand how the people of Rome watched the decline of the empire and did nothing to stop it; having had their brains numb through progressive self-induced degeneration. I certainly now do understand.
Every single right deprivation is always cloaked as necessary for all of society.
Boy I love when people bring
Boy I love when people bring up Rome. Well for one thing, the people of Rome by and large had no vote or voice in anything done by the government. The Emperor, as long as he had the support of the military, was in power and could do whatever he wanted to do. During the Republic era a small percentage of the population had some participation but that was it.
Also, as the years went on the people of Rome actually got more and more personal freedom, while they pretty much kept the same amount of political freedom (none basically)
Slavery was made illegal, religious freedom was embraced later in the empire etc.
The fall of Rome was multi-faceted obviously - but the fact that the empire made almost all it's money conquering other lands and eventually ran out of "rich" places to conquer is a big reason. Then it had to maintain a military that doubled in size between Augustus and Trajian just to keep those provences - a military that manufactured nothing but demanded higher and higher payments. Just like the danger to the U.S. it was in some way a economic crisis that brought down Rome, no money coming in and tons of money going out. I imagine if the people had a vote they would have voted to end the empire, protect the boarders of whatever they considered the core of Rome itself, and spend that money on the general populace and stop exempting aristocratic families (see corporate welfare) with close ties to the Emperor from taxation.
I totally agree. The fall of
I totally agree. The fall of Rome was due to the lack of possible expansion.
I also think that the US political system has survived for more than 200 years because of the expansion possibilities. Any system works while expansion and prosperity is possible. In contrast, in Europe, expansion was not so easy during these 200 years and the political systems have been less stable.
Now, we are in a moment in history where expansion is becoming harder. More expansion will only be possible with technological advances or. Of course, you can also have an artificial financial expansion but we know how that ends.
I think this is the most
I think this is the most important point that the average, often enraged, citizen fails to realize. Even more frightening is a populace wanting accountability when they don't know what the root cause of their problems are. Here we see a whole lot of ignorant fury knee jerk politics.
Lars
The Benefits Group
Love Freedom?
Then learn to love the 10th Amendment.
Wish those Texas textbook critics worried more about the 10th Amendment than they do about Darwin.