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PaPACA goes to the Supreme Court

Submitted by Simon on Mon, 11/14/2011 - 12:14pm

In a nutshell, here's what the Supreme Court ordered this morning in several Obamacare-related grants. The court is going to hear several hours of argument on the following questions: (1) Is the mandate severable? (2) "Whether Congress had the power under Article I … to enact the minimum coverage provision" of PaPACA.Pet. in 11-398. (3) "[w]hether the suit … challeng[ing] the minimum coverage provision of the Patient Protection and Affordabl...e Care Act is barred by the Anti-Injunction Act…."Nov. 13 2011 Order in 11-398. (4) "Does Congress exceed its enumerated powers and violate basic principles of federalism when it coerces States into accepting onerous conditions that it could not impose directly by threatening to withhold all federal funding under the single largest grant-in-aid program, or does the limitation on Congress‘s spending power that this Court recognized in South Dakota v. Dole no longer apply?"Pet. in 11-400. (citation deleted). Now you're up to speed.

As I've mentioned before that I find it hard to count five votes for striking PaPACA down, but I must add that if comes out 5-4, I expect to see a slew of people condemning the decision as not only a horrible mistake but in fact illegitimate. If it's struck down, the leftosphere will go berserk charging that Thomas should have recused himself, and if it's upheld, the rightosphere will go berserk charging that Kagan should have recused herself! These narratives are already in the can, folks.

There's also, more limitedly,

There's also, more limitedly, an issue about whether an fine enacted for someone not purchasing a good constitutes an Unconstitutional direct tax. This argument was part of the Florida suit, I don't know about the other suits.

I think its an important issue, because there's a question of whether the Congress is allowed to give tax credits for purchases, which is different from whether they're allowed to enact tax penalties.

Going by Tenth Amendment reasoning alone, they wouldn't be allowed to either give penalties or credits, and that would throw a lot of tax code out of the window, including tax deductions for donations to charities. After all, Article I does not specify the Congress has the power to reward people for giving to charities.

What about the Sixteenth Amendment?

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

Within that, there is no restriction on how it is collected. That means that Congress does have the power to decide how it collects income. Now this may not apply to the healthcare argument, but it really blows holes in the idea that Congress has no power to set deductions or credits on income tax. Where I think a possible line may be drawn is refundable tax credits. Beyond that, I don't think the Tenth Amendment has any impact on how the tax code for income is created.

Taxing someone because they

As for how the mandate is designed, taxing someone because they don't buy a product isn't a tax on income, unless you're stretching. Just because its included on an income tax form doesn't automatically make it a tax on income. If that were the case, they could tax anything on the income tax form, and it would make it legitimate. Put a property tax on the income tax form, and its a tax on income.

I think the federal government does has some power to offset the costs of services with fees, or reimburse people if they buy those services, which is the intent of the mandate, but not the way its done in the health care bill.

I think credits generally pass Constitutional muster, like you're saying. But the court will have to distinguish tax penalties from tax credits at some point, so I think they have to narrow the ruling on this point.

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