A Few Words About Judge Sutton's Tax Analysis

I'm going to extend my (ahem) mandate by talking a little bit about the health care litigation.

I largely admire Judge Sutton's concurring opinion in the Sixth Circuit's Affordable Care Act decision.  He clearly has reservations about the law, but wrestles with them in what looks to be an intellectually honest way.  I thought he was wrong, though, to conclude that the statute couldn't be justified under the taxing power.  As he notes, "Few doubt that Congress could pass an equally coercive law under its taxing power by imposing a healthcare tax on everyone and freeing them from the tax if they purchased health insurance."  (slip op. at 51)  But he rejects the taxing-power theory because, he claims, Congress didn't call the enactment a tax.  (Id. at 28).

Unusually for courts that have considered this point, Judge Sutton gives evidence of having actually read the statute.  He notes that the word "tax" appears a number of other times in the section imposing additional costs on those who fail to buy insurance.  (slip op. at 30).  From this he infers that Congress must have meant to distinguish between taxes and what it called a "penalty."  But most of these other appearances of "tax," as well as other usages such as "taxpayer" and "taxable year," are clearly intended to refer to the penalty.  For example, the amount of the "penalty" is determined by taking a percentage of the "taxpayer's household income for the taxable year."  Who is the taxpayer here, except the person who must pay the price for failing to buy insurance?       

In any event, given the perfect economic equivalence between the ACA and the provision Sutton says would easily be constitutional, one is left to wonder why formalism must prevail.  I've argued not only that it shouldn't, but that the Supreme Court has actually held it doesn't.  (Edit):  Even better, read Akhil Amar on this point.