Randy Barnett has been saying for some time that the Obamacare health insurance mandate, which institutes a penalty for inactivity, would be an unprecedented use of Congress’s interstate commerce power. At first his contention was mocked by Democratic legislators and law professors alike, but Barnett now seems to have won the argument without it ever seeing the inside of a courtroom.
When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.” . . .
Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.
As the NYT notes, this is a significant shift from politicians who swore that the individual mandate was absolutely not a tax. Here’s President Obama (literally) mocking George Stephanopoulos for calling the individual mandate a tax (cue to 3:00):
Whether these statements will hurt the administration’s argument in court, I don’t know, but I’m sure they’ll be mentioned.
However, even if the court eventually finds that the mandate is a tax, not a penalty, Obamacare isn’t out of the woods yet. A new paper argues that the individual mandate is also unconstitutional as a tax. Their argument is as follows:
- The Constitution, as amended, provides for three sorts of taxes: (1) direct taxes, which must be apportioned by population, (2) excise taxes (also called indirect taxes in the legal literature, although the term does not appear in the Constitution), which must be uniform, and (3) income taxes, which must be on “derived income” (a term of art in the legal literature).
- The mandate is not an excise tax, as it taxes no particular activity and also is not indirect (i.e., it is not passed on to another party).
- If (counterfactually) it is an excise tax, it is unconstitutional because it is not uniform.
- It is not an income tax because it does not tax derived income.
- If it is a direct tax, it is unconstitutional because it is not apportioned by population.