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Friday, December 30, 2011

Looking for Clarity in the Taxing Power

Since my New Year's resolution will be no more (or, more realistically, not much more) ACA litigation blogging, let me wind up this series with a thought about what courts have been doing when they ask whether Congress intended for the minimum essential coverage provision (the latest, if not the most euphonious, term for sec. 5000A(a)) to be a "tax."  I've suggested that in effect the courts are holding that Congress can bar other branches from invoking some constitutional power in support of a law. 

Why do I say that?  Well, because there is an excluded middle in the courts' reasoning.  They say 1. Congress didn't want this to be a tax and so 2. it's not a tax.  But what if the President or the Supreme Court thinks it is a valid exercise of the taxing power?  What relevance, then, does Congress' view have? 

On the other hand, some people have said to me, maybe the courts are just trying to figure out whether this thing is a "tax" -- are indeed exercising their own judgment, in other words.  That doesn't square with my reading of what courts actually are saying.  For example, the 11th Cir.  put alot of weight on the fact that Congress specifically invoked its Commerce power.  That sounds like "what did Congress want?" and not "what is this thing?"

After the jump, I'm a dewey-eyed innocent.

The other problem for the "independent judgment" theory is that it doesn't fit with precedent.  The Supreme Court says flatly that something is within the taxing power if it raises revenue.  Doesn't have to be called a tax.  Revenue.  So where is the room for these long, tortured readings of legislative history, if not in search of Congress' effort to relinquish its obvious taxing authority? 

Maybe that's too generous of a reading.  Another way to take what the 11th Cir. did was that it tried to massage Supreme Court precedent to invent a new category of thing, which it calls "penalty."  This new thing raises revenue but isn't within the taxing power.  Ah -- so now there would be some difficult line-drawing to figure out which is which.  But that's alchemy.  The only place this "tax/penalty" distinction is used (after 1937, when the Court thought it killed it) is for assessing due process rights of people Congress is trying to punish.  Nothing whatsoever to do with the taxing power.  Totally inconsistent with many, many repetitions by the Court that Congress' intent w/r/t a revenue-raiser has nothing to do with whether it's within the taxing power.  Why insist on the reading of these cases that creates, rather than avoids, a major conflict among precedents? 

And who would want it the other way?  Do we want the government budget (including the projected day the debt ceiling limit is reached and government crashes to a halt, for example) to depend on whether a Court will discover punitive intent in some tax expenditure?  If we're following the due-process cases, then not even magic words are enough; punitive intent is all that matters.

So I think I'm being pretty generous, actually.  Either Congress is disclaiming its own taxing power -- a startling new outcome for which we should expect much clearer evidence than we have.  Or the 11th Circuit and its defenders are cherry-picking phrases from irrelevant lines of decisions to try to muddy up what is a deliberately bright-line, unequivocal standard.  I say it's the first.  But maybe I'm just a bright-eyed naif.   

Posted by BDG on December 30, 2011 at 01:54 PM in Constitutional thoughts | Permalink


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Just to make clear that, if one of the "people" you are referring to is yours truly, I have said absolutely zip about the courts' reasoning and whether they are exercising independent judgment. I have been talking about the arguments being made to the courts (and to the public more generally).

Posted by: TJ | Dec 30, 2011 3:48:03 PM

I'm with you but even the (imho) sane dissent in the 11th Cir. signed on to the opinion on that point as have some others who are sane on the CC point. I find it all rather unfortunate since it looks like a duck to me and I can't take it seriously when people tell me the problem is that politicians are selling it as not a tax. We have to take pols at face value now? Seriously? Happy new year and I appreciate your writings on the subject.

Posted by: Joe | Dec 30, 2011 2:53:09 PM

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