Once More: Taxes, Obamacare, and the End of the Constitution

Earlier this week, Mike Rappaport  replied  to Mike Paulsen’s  defense  of Chief Justice Robert’s opinion upholding Obamacare’s individual mandate as an exercise of the taxing power. It’s taken me a bit to weigh in because NFIB v. Sebelius continues to grow on me: the more I think about it, the angrier I get. But on a Saturday after a round of golf, I can manage. I think.

Between right-wing originalists called Mike: I believe that the Chief got it almost right; that Mike P.’s defense gets it almost right; and that Mike R.’s objection misses the mark. But the “almosts” matter: they contain all the tragedy and horror of the decision.

To be clear: I have no design to join the conspiracy theorists and “Roberts is a traitor” contingents. Mike Paulsen’s piece contains an eloquent defense of the Chief’s personal and judicial integrity, to which I subscribe wholeheartedly and which will hopefully help to put distance between the grown-ups and the fever swamps. It so happens, though, that honorable people can make mistakes that have very fateful consequences—not on account of a lapse but for respectable and even, and precisely, for honorable reasons. Here goes.


The Power to Tax. For purposes of deciding whether the payment attached to the “individual responsibility mandate” is a legitimate exercise of Congress’s power to tax, does it matter that Congress call the payment a “penalty” rather than a “tax”? The answer, Mike Paulsen writes in defense of Chief Justice Roberts’ opinion, has to be “no”: the constitutional question isn’t whether Congress was invoking a particular power but whether it had the power.

Mike Rappaport tries to fight that proposition. Suppose, he says, Congress imposes a retroactive criminal penalty, which would be unconstitutional under the Ex Post Facto Clause: should the Court sustain the measure nonetheless because Congress had the power of imposing the same fine as a civil penalty and pursuant to its taxing power? Well, no. The designation (“criminal/civil”) makes a practical, operational difference:  depending on what the measure was enacted as, you either owe the money or you don’t. Not so with the mandate:  call it what you will, you owe it and it operates as a tax. Because nothing hangs on the label, the only question is the power. And on that score, even the plaintiffs conceded throughout that Congress could have imposed the mandate as a tax.

The argument is straightforward, and Mike Paulsen is right in noting that the dissenters had no persuasive response. Still, it leaves a very bad taste. The proponents of the law, plaintiffs stressed, swore up and down and sideways, in the halls of Congress and on national tv, that the penalty was not a tax. Moreover, the ACA has tons of explicit tax provisions; this thing, while related to revenue-raising, is called a penalty. In determining what Congress thought it was doing, that must count. No?

No. On solid originalist/formalist grounds, all the “it’s not a tax” talk is beside the point because it wasn’t subject to bicameral approval, presentment, and veto. Had Congress said, in the statute, that “this penalty shall not be construed as a tax”; or had it included “findings” to that effect or even a statement of intent, the case might well have gone the other way: deference to Congress, and all that.  But Congress didn’t do that, and so there.  As for the statutory tax-versus-penalty argument: that would count in statutory cases, where we divine the true intent of the Congress. It doesn’t count for constitutional purposes, where the question isn’t intent but power.

All that, too, seems right as a legal matter. Note, though, what it means in the context of this case: your President, your Senators, your Representatives can deliberately lie to you about the most fearsome power entrusted to them (the power to tax) and enact a gargantuan statute under pretext—provided they’re smart enough not to put it in the formal bill. They can then tell the justices the opposite, in the very last pages of their briefs but on the known grounds that the lies are beyond judicial purview, because they are beyond the legal text that you (citizen) haven’t read but to which the justices are bound and which they interpret under canons that you have never heard of, nor will ever understand. Betwixt our rational ignorance and the Court’s constitutionally grounded impotence, anything goes. The only limits are the bounds of our representatives’ cynicism and their lawyers’ cleverness, and good luck to us all.

This is the first constitutional teaching of NFIB v. Sebelius. The second is worse.


Apportionment. If the payment at issue is a tax, what kind of a tax is it? If it’s an indirect tax, it must be uniform. (As Tom Christina has noted  in these blog pages, the individual responsibility mandate probably isn’t uniform; but let’s not get too lawyerly about this stuff.) If it’s a direct tax, it must be apportioned, and the mandate payment (or whatever) isnt’.  Mike Paulsen follows the Chief in dismissing this concern: only a head tax can be “direct,” and in any event this thing isn’t close.

Respectfully, no. As Tom Christina’s posts show (albeit sub rosa), the mandate is very close to a head tax. And as for the contention that only head taxes can be direct, it’s charitably described as strained. The Constitutional Convention was notoriously confused on the point, and aside from loose dicta, the cases interpreting the clause say and hold nothing of the sort. (For discussion and references see The Upside Down Constitution , pp. 158-160.) On this question, the dissenters had it right: this is a drive-by constitutional ruling with virtually no briefing, no argument, no nothing—on an extremely close question.

Any fair reading of Chief Justice Roberts’ opinion will show that he knew this. What, though, was he supposed to do—order the case for re-briefing and re-argument? Engage the issue, with the help of his clerks? Not a chance. So the Chief did the prudent thing: blow right by the problem. Wing it, in the hope that everyone who is in on the joke will understand why he wung it.

You can follow every step in this progression—until you reach the result: the Affordable Care Act, which (five justices determined) is unconstitutional under Congress’s virtually unlimited (non-tax) enumerated powers, is still constitutional in its entirety—not, mind you, under the taxing power simpliciter, the exercise of which Congress had solemnly disavowed in every form and forum but one (the enacted text); but under a “theory” of the taxing power invented for just this case, on the basis of next to nothing. The message—not the intended message, but the message that ordinary citizens take away—is that the politicians can do and say whatever they want (see supra): the Court will find some reason to let them get away with it.

Granted: the Chief’s opinion made pretty tough noises and even purported to lay down limiting rules on the powers of Congress under the Commerce Clause and the Necessary and Proper Clause. However, the eventual reliance on a doubtful tax rationale renders that well-intentioned exercise in constitutionalism—jarringly discordant with the bend-over-backwards holding—worse than worthless: we’ll bark, sayeth the Court, provided we know in advance that we won’t have to bite. “We won everything but the case,” some libertarians have exalted. On the judicial tiger’s paper, maybe. In real life they lost the case, and then some. To borrow a phrase from another sickening (famous AdLaw) case, the ACA is the consensus on which the contending forces of society have come to rest.


Democracy and All That. I take, and I warmly endorse, Mike Paulsen’s point that conservatives and libertarians should stop looking to the Supreme Court as a deus ex machina, and I readily grant that the advocacy in the Obamacare cases was affected by that virus. However, the let’s fix-this-at-the-ballot-box appeal  is light years away from the message—to repeat, not the intended message, but the unmistakably conveyed and publicly received message—of NFIB v. Sebelius: there are no limits. The justices will find a way to declare everything in good legal order. Dear citizens, you’re on your own.

If the Supremes’ tanking approval ratings are any indication, “you’re on your own” is the last thing that a weary, demoralized country wanted to hear. And it’s not the voice of a Constitution that says that there are limits; that we are not on our own in resisting depredation. I will have to teach NFIB later this Term (from Mike Paulsen’s splendid textbook, no less). Consistent with my contractual obligations, I’ll try to persuade my students that the Constitution still means something. Whereupon I will suspend office hours and head home for a hot shower, to cleanse me of my lies and iniquities.

Michael S. Greve

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. His most recent book is The Upside-Down Constitution (Harvard University Press, 2012).

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  1. libertarian jerry says

    Michael… The Constitution is what the Power Elite wants it to be. Especially when it comes to taxes,money,banking,regulations and control of economic issues. The twisting of the 16th Amendment with the Brushaber decision to enable the government to go into anyone’s property and fruits of their labor and take what they want when they want. The Helvering Decision that allowed Social Security to be enacted. Wickard vs. Filburn which somehow let the Federal Government regulate anything at any time. The Federal Reserve Act which gave away the U.S.Treasury’s Constitutional responsibility of issuing America’s money added to the Legal Tender Laws which does not allow competition in money therefore closing the door on Constitutional Gold and Silver money. The list is endless. People that believe in Liberty must realize that we don’t live in a nation of Laws but a nation of powerful men. The Constitution is what the Power Elite wants it to be. The politicians,the heads of major government agencies,especially the FBI,the CIA,Treasury and other key departments plus the judiciary have all been bought and paid for in one way or another. Except for Cong.Ron Paul and a handful of other brave legislators no one questions what has happened to our Nation over the last several years. The bold,blatant illegalities that the people in responsible positions have gotten away over the last several years is hardly questioned by the Main Stream Media which is owned by 5 or 6 of these same Power Elitists. America has become not the land of the free but the home of the tax/debt serf. And no matter what happens,the Supreme Court won’t make a dent in restoring Constitutional law and order. Unfortunately America as a lawful nation ceased to exist many years ago.

    • says

      libertarian jerry,

      You’re not distinguishing between the two broad categories of income taxes, those derived from property sources vs. those not. The 16th Amendment only authorized taxes on income derived from property sources, and the Brushaber decision was addressing that category.

      However, the currency-regulating income tax–i.e., the one launched in Helvering v. Davis, and later supported by Wickard v. Filburn–dealt with taxes on income not derived from property, which category of income tax requires no legal support from the 16th Amendment because it’s always been Constitutional.

      Also, it’s incorrect to say that the Federal Reserve Act “gave away the U.S. Treasury’s Constitutional responsibility of issuing America’s money.”

      The Federal Reserve Act only shared SHARED the power to issue monetary substitutes with Congress, while Congress retained both the exclusive power over coinage and the power to also issue competing monetary (non-coin) substitutes.

  2. says

    Maybe it’s both a penalty and a tax, i.e., a penalty within a regulatory tax scheme that began taxing the use of (non-U.S. coin) money substitutes in Helvering v. Davis (1937).

  3. libertarian jerry says

    Rick….. What you say in your comments is right on point. What I was trying to explain, to the general reader of this Blog, is that when people have challenged the Income Tax on various Constitutional grounds, the courts,especially the lower courts have ruled against many such challenges dismissing them on technicalities and labeling them “Tax Protester” arguments,without addressing the issues brought forward. For some reason,the government doesn’t want to lose the power to take peoples property directly,under the guise of taxation and the color of the law.This is why,to a large extent,that the state makes the Income Tax voluntary. Making it mandatory would violate many parts of the Constitution. If past courts had ruled against the state,the Income Tax,as it is now collected,would be history.

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