Taxing Power Gives Government Total Control

Taxing Power Gives Government Total Control
June 29, 2012

Maureen Martin

Maureen Martin passed away on February 5, 2013. The Heartland Institute's page in tribute to her... (read full bio)

The Supreme Court’s 5-4 decision holding the Obamacare individual mandate is constitutional was based on grounds not addressed by the parties to the suit. Thus debate was squelched on the most vitally important issue presented in this case: How much power does the federal government have to control the lives of Americans and dictate our individual behaviors in any and all ways it chooses?

The answer, according to the Court, is that the federal government has complete and total control over all of us--it has the power to regulate everything we do and everything we choose not to do--provided Congress taxes the income of anyone who fails to comply with the government’s dictates.

At issue in the case was the constitutionality of the Affordable Care and Patient Protection Act’s (“Obamacare”) requirement that all Americans purchase private health insurance as a condition of drawing breath in this country.

The Obama administration first sought to justify this requirement--called the individual mandate--as a lawful exercise of the federal government’s power to regulate commerce under the Commerce Clause of the U.S. Constitution. The Court majority rejected that argument, ruling the Commerce Clause allows the federal government to regulate existing commerce but precludes forcing Americans to engage in commerce in the future.

The Court next considered whether the Obamacare financial levy on people who fail to comply with the individual mandate is a penalty or a tax. Finding the financial sanction to be a tax, the majority concluded the entire individual mandate is constitutional.

End of discussion.

But this should have been just the beginning.

On the one hand, the Constitution provides for a federal government of limited, enumerated powers. The federal government cannot act outside of those powers. The majority opinion concedes this point, stating, “If no enumerated power authorizes Congress to pass a certain law, that law may not be enacted.”

On the other hand, article I, section 8, clause 1 of the Constitution provides, “The Congress shall have the power to lay and collect taxes … to provide for the … general welfare of the United States.”

Early in the nation’s history, the Supreme Court held government powers under this “general welfare” clause were limited to enumerated ones. As late as the 1937 case of United States v. Butler, the court wrote, “[James] Madison asserted it [the general welfare clause] amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress.”

This Court no longer respects that principled position. “This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate,” the current Court wrote, citing a hoary old precedent from 1867.

Even the dissenters (Scalia, Alito, Kennedy, and Thomas) conceded this point. I’m not sure why. Most of the tax cases cited in the Court’s opinion involved congressional bills in which the imposition of a tax was the bill’s central purpose--a $50 annual tax on gamblers, for instance. The central purpose of this part of Obamacare, on the other hand, is to require people to purchase health insurance, not to impose taxes.

The tension between the enumerated-powers limiting provision of the Constitution versus its arguably broader general-welfare clause was never briefed to the Court in connection with its decision on Obamacare. The only issue briefed was whether the financial levy was a penalty or a tax.

As the dissent noted:

“The Government’s opening brief did not even address the question--perhaps because, until today, no federal court has accepted the implausible argument that §5000A is an exercise of the tax power. And once respondents raised the issue, the Government devoted a mere 21 lines of its reply brief to the issue. Petitioners’ Minimum Coverage Reply Brief 25. At oral argument, the most prolonged statement about the issue was just over 50 words. Tr. of Oral Arg. 79 (Mar. 27, 2012).”

At oral argument, this issue was never addressed. Once it was held Obamacare involved a tax, that was the end of the discussion.

What the Court’s opinion means is that the federal government can order all of us to do anything it wants us to do, so long as Congress appends a Taxing Clause provision, even if this taxing provision is peripheral to the central purpose of the legislation.

This is not what our Founders intended. This is a very dark day for America.

Conservative political operatives are using the decision as an opportunity to urge that Obamacare be repealed. But more than that is needed. The Constitution ought to be amended to make it plain – once and for all – that the federal government may tax and spend only as authorized by an enumerated power. Only then will we be safe from tyrannical government.

Maureen Martin (mmartin@heartland.org) is senior fellow for legal affairs at The Heartland Institute.

Maureen Martin

Maureen Martin passed away on February 5, 2013. The Heartland Institute's page in tribute to her... (read full bio)