Sunday, July 01, 2012
Taxes, Crimes, and Varieties of Outlawry
I have a somewhat narrow question for the informed readership about one of the arguments in CJ Roberts's opinion in NFIB about the nature of the "exaction" at issue. The Chief says this at p. 43: "[W]e need not here decide the precise point at which an exaction becomes so punitive that the taxing power does not authorize it." CJ Roberts's opinion, at 43. A bit before that discussion, the Chief attempts to express a limiting principle to distinguish punitive measures from taxes based on a principle which looked familiar to me:
In distinguishing penalties from taxes, this Court has explained that "if the concept of penalty means anything, it means punishment for an unlawful act or omission." . . . . While the individual mandate clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.
Opinion of CJ Roberts, at 37 (emphasis added). My question is what sort of limit or distinction this argument is meaning to describe.
Obviously failing to pay the exaction is "unlawful" in the sense of being contrary to a positive law, so that can't be it. Instead, the Chief seems to be relying on some other sense of lawlessness. This section caught my eye because it sounds a little bit like the sort of thing that teachers of criminal law talk about at the very beginning of the class -- what makes something a crime as opposed to a different sort of unlawful act. Some people claim that one kind of difference relates to the additional sorts of negative consequences that committing a criminal act brings about which violating a non-criminal law does not. Sometimes this is described in terms of stigma or some sort of consequence -- including a legal consequence -- additional to the bare fact of illegality.
Just afterward, the Chief says this: "[I]t is estimated that four million people each year will choose to pay the IRS rather than buy insurance . . . . We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws." Id. at 37-38 (emphasis added). Again, I am confused by this language. What work is the word "outlaws" doing here? Surely Congress did intend to make failure to buy insurance or in the alternative pay the exaction illegal -- or "unlawful." So what other sense of outlawry is involved in the Chief's description here? Is it something closer to the sense of illegality involved in some criminal laws? Something like the malum prohibitum and malum in se distinction? "Creat[ing]" an "outlaw" has a different sort of connotation than creating a law which makes conduct illegal -- and I take it that the Chief is relying on this distinction, but I'm not sure I understand what he means precisely. The Chief goes on to rely on New York v. United States, which involved an environmental statute for the disposal of radioactive waste, backed up by a penalty for failure to comply which was described by the Court as a tax, not a penalty. There are certainly crimes for mishandling environmental dangers like toxic waste -- are they malum prohibitum or malum in se?
ADDENDUM: I see that Rick Hills got to something like the stigmatic point I am making (though expressing perhaps greater skepticism about it than I do) here. Yet something like the distinction that I think the Chief is driving at does explain at least some of what distinguishes criminal law from other sorts of law. Still, mea culpa for not reading that post carefully enough before writing.
SECOND ADDENDUM: Neil Siegel has something on this as well (referring in his post to a forthcoming Va. L. Rev. article that I'll look at). He writes that "[o]ne who must pay a pure penalty is condemned for wrongdoing," while a "pure tax" conveys "permi[ssion]" to engage in the conduct (and so is productive of greater revenue). Professor Siegel then refers to "mixed exactions," of which he says the mandate is one, but the way that he (and co-author Prof. Robert Cooter) go about deciding whether a "mixed" exaction is punitive or revenue-raising looks functionalist -- focusing on the "effects" of the exaction. This does not seem to me to be quite the same sort of functionalism that appears in the Chief's opinion, and it is also different than the Chief's variations on outlawry. Ok...no more addenda.
Posted by Marc DeGirolami on July 1, 2012 at 12:26 PM | Permalink
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Radioactive-waste mishandling crimes are mala prohibita, unless they obviously endanger people more than obvious alternatives. Likewise, failing to install energy-efficient windows is a malum, and so is free-riding on the emergency-health-care system. But they're not mala prohibita -- they're mala discourageda.
Excellent, thought-provoking post. Despite the evidence Roberts adduces, I think Congress DID intend it to be illegal -- violation of a regulatory regime -- to fail to comply with the mandate. Luckily he was able to pretend otherwise.
Surely there is scholarship on the very interesting question you raise? Failure to fully comply with a regulatory regime, facing administrative penalties entrusted to administrative rather than prosecutorial discretion, occupies a middle ground practically between criminal action and costs of doing business. I'll be following this thread because you're focusing the distinction that (Roberts claims) saved Obamacare, but it's a very very fine one.
Posted by: Jim von der Heydt | Jul 1, 2012 12:44:29 PM
All due respect to Neil, but neither the opinion nor his distinctions really make much sense. Roberts just makes a ridiculous muddle of what was (to my mind, anyway) pretty straightforward. The law was this: "taxes" for purposes of art. I sec. 8 taxing power were anything that raised revenue. Then there were some separate cases, not about art. I at all, that tried to smoke out efforts to avoid criminal defendants' due process or other crimpro type rights (double jeopardy, e.g.). So conceptually, it was clear that an "exaction" could be both a tax, b/c it raised revenue, and a penalty, b/c it sought to punish and triggered procedural safeguards for defendants. Roberts tries to mush these two lines of cases together.-
Posted by: BDG | Jul 1, 2012 7:26:45 PM
Maybe I'm misreading either you or the Chief, but it seems like you're talking past his opinion. He seems to be saying that Congress did not intend "(A) not buying health insurance and (B) paying the tax" to be 'illegal', while you keep saying that Congress *did* intend "(A) not buying health insurance and (~B) not paying the tax" to be 'illegal'.
Am I missing something?
Posted by: Andrew MacKie-Mason | Jul 10, 2012 8:47:10 PM
Right, but of course it is "unlawful" to refuse to pay the tax, as the Chief says at footnote 11. It's true that the use of unlawful, illegal, and outlaw are not perfectly clear (at least to me) in the Chief's opinion. But it seemed to me that the Chief intended slightly different meanings by using these terms. So I was trying to understand the nature of the different meanings of illegality that the Chief seems to have in mind by relying on the similar sort of discussion that can happen in criminal law.
Posted by: Marc DeGirolami | Jul 11, 2012 8:06:14 AM
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