Chief Justice Roberts on Congress's awesome power to tax inactivity:
“First, and most importantly, it is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity,” Roberts wrote for the 5-4 majority.Quin Hillyer:
Roberts said that while the Constitution protects Americans from regulation if they choose not to engage in a regulated activity, it does not protect them from taxation if they choose not to engage in a taxed activity.
“The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes.”
Roberts said that his decision upholding the mandate as a tax, rather than as a use of the Commerce Clause, does not create any new federal powers. Instead he said it merely confirms that Congress used an existing power appropriately.
“Sustaining the mandate as a tax depends only on whether Congress has properly exercised its taxing power to encourage purchas¬ing health insurance, not whether it can. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.”
He has ruled that Congress can't mandate that an individual must choose economic activity over inactivity -- but then that Congress CAN tax the inactivity itself and give IRS powers (other than criminal prosecution, but presumably including wage garnishment, etcetera) to penalize the refusal to pay "taxes" on that inactivity. (Side note: Roberts said that this is okay because Congress has previously taxed people who were inactive. This is bunkum. Here, Congress is taxing the inactivity itself. This is unprecedented, and illogical. It means that any time Congress wants to force you to, yes, buy broccoli, it can impose a tax on your refusal to do so, and thus escape the limits on Commerce-Clause powers.) Even Roberts described this as "a tax on going without health insurance." I challenge anybody to give a single other example of there being "a tax on going without...anything." This blows aparts every notion of what a tax is. Governments tax things or actions; they do not tax that which is nonexistent.Husband on Twitter:
Think of all the things you didn't buy today and everything you didn't do. And you didn't pay taxes on any of them, you irresponsible fiend.Yes indeed. I'd ask for your suggestions but do we really want to help Congress bleed us dry?
Congress must be giddy tonight. Taxing things that never even happened: what kind of sweet revenue stream is that? Possibilities are endless
Two more, on taxes:
Q: When is a tax not a tax? A: Never! B: When it's convenient C: When we say so. D: All of the above. And vice versa.By the way, I brought up the "silver lining" that the Court has acknowledged limits on the Commerce Clause and husband laughed out loud.
“An unlimited power to tax involves, necessarily, a power to destroy.” Daniel Webster
Conservatives touting "limits" on Commerce Clause in Roberts opinion: call back when they actually limit something.Yeah.
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A must-read from Byron York: Roberts' dodge at heart of Obamacare decision
After Long made his case, it fell to the administration's lawyer, Solicitor General Donald Verrilli, to argue that no, the mandate was not a tax, and therefore the case was not subject to the Anti-Injunction Act.Read the rest.
At the same time, everyone knew that the next day, when Verrilli planned to argue that the mandate was justified under the Constitution's Commerce Clause, he had as a backup the argument that it was also justified by Congress' power to levy taxes -- in other words, that it was a tax.
Justice Samuel Alito saw the conflict right away.
"General Verrilli, today you are arguing that the penalty is not a tax," Alito said. "Tomorrow you are going to be back, and you will be arguing that the penalty is a tax. Has the court ever held that something that is a tax for the purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?"
"No," answered Verrilli.
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It strikes me that this would preclude a First Amendment challenge to the abortion mandate. If this convoluted reasoning is indicative then there should be no restriction on taxing any individual or organization which freely chooses to not engage in an activity.
ReplyDeleteI disagree here. What Roberts may be saying is true. We are taxed on your "potential" activity right now. How? Do you pay for Social Security? Do you use it currently? Medicare? Do you use it currently? No. The government assumes you will, but you are not actively engaged in it currently. You are, by definition, inactive.
ReplyDeleteFurther, lets use highway funds. Should you be taxed for only the roads you drive on? How about the ones built you don't use, say in New Mexico? You are inactive on those roads, but you pay for that road through highway taxes, in case you do use that road someday.
How about any number of other fees or taxes you pay. I homeschooled my kids, but paid property taxes of which a good deal went to public school funds. Why? I was inactive. That particular case went to court and was rejected by government. How about waste disposal fees? If you don't have your garbage picked up are you exempt? Nope.
Stupid maybe, but settled law. Roberts can't go backwards, only make the best of what was in front of him. Watch what happens over the next few months. as I said in my blog. Roberts just gave Obama a Chinese curse- "May you live in interesting times."
Here are two links. The second one is an idea the Republicans in the House should bring to the floor to highlight the two tiered system. They need to demand ALL federal employees, including Congress be subject to the end result of Obamatax.
http://truthandcommonsense.com/2012/06/29/judge-roberts-gives-obama-a-chinese-curse-may-you-live-in-interesting-times-what-conservatives-missed-in-the-ruling/
http://truthandcommonsense.com/2012/06/30/the-house-has-a-chance-to-make-a-big-statement-when-revisiting-obama-tax-stop-their-own-exemptions/
I agree with archer52. If, for example, an individual receiving SSDI (Social Security Disability) engages in SGA (substantial gainful activity), even if it's regular recurring unpaid volunteer work, it can reduce a person's check or kick one off SSDI.
DeleteProperty taxes, interest or dividend taxes, estate taxes... And, all kinds of financial and business endeavors charge inactivity fees which are essentially (or sometimes called) maintenance fees, i.e. we maintain your account even if you are not "using it". What is charged is maintaining the potential use. In the case of health insurance, it's the maintenance of the ability to buy into an insurance pool, or to buy insurance and not have pre-existing conditions considered, etc. Why should you not have to pay for this, yet still get the benefits if you later decide to buy? (Or, not help fund this for others who would otherwise end up on public assistance which would in fact be covered by yes, the general fund, which yes, comes from taxes)
I disagree with the general train of thought here... the tax for SSDI or SS or Real Estate or anything else may be predicated upon your potential use, but it is NOT based upon that. It is based upon an economic activity. In the case of SS/SSDI/Medicare it is based upon your participation in the work force and getting a paycheck. Now you might argue whether it is legitimate to tax your salary to pay for Medicare or SS... but the tax is based upon an economic activity. Robert's decision, is that you can be taxed based upon economic inactivity. Tax to the average man's way of thinking is a percentage or part of a total, whether it is your mil rate for real estate or your 4.2% SS contribution. So Roberts is essentially saying that some percentage TIMES ZERO (economic inactivity) is now a positive number. Sounds like new math as well as new law to me.....
ReplyDeleteFor you know the gracious act of our Lord Jesus Christ,
ReplyDeletethat though he was rich, for your sake he became poor,
so that by his poverty you might become rich.
Not that others should have relief while you are burdened, but that as a matter of equality your abundance at the present time should supply their needs, so that their abundance may also supply your needs, that there may be equality.
As it is written:
Whoever had much did not have more, and whoever had little did not have less.
- 2 Cor 8: 9,12-15
Since the SCOTUS has declared the penalty for not buying health insurance to be a tax, who is exempted from paying it? Members of groups exempted from buying health insurance, such as the Amish or Muslims? What about Churches or other religious groups or their employees? What about employees of Companies which opted out of Obamacare, such as McDonald's?
ReplyDeleteAnonymous I think is confused between the activity and the "method of obtaining payment" for that activity.
ReplyDeleteCongress could have made SSI and Medicare a tax taken from people via property or income tax or even a demand for payment after tax at the end of the year, BUT in an effort to "hide the impact" they take it out of your gross paycheck and people don't see it or get used to it not being there.
Follow me here. In a sense, by trying to "hide" the cost of Obamatax, the Democrats used the mandate concept and kicked the taxing process over to HHS and away from them. Remember, we get pissed at them, we vote them out. We get pissed when they take our money (And here comes the hanging curve Roberts threw) BUT they figured to sell the deal they would sometime have the cover of saying "Hey we didn't take your money it was that unknown bureaucrat, who can't be fired, in at agency we can't control or end.
HOWEVER, Roberts used this opportunity to force them into the light. Republicans are now harping that it is a TAX it is under the control and responsibility of Congress and they will have more than one attempt to repeal it or force the Dems to create a vehicle in which to pay for it (for example, deducting it from your paycheck and then at the end of the year, IF you have insurance you get refunded)
Further, they are going to have to deal with steps, like all income tax issues. What is "insurance"? What is an acceptable level for the government? 80/20? three thousand deductible? Ten thousand catastrophic?
Think for a second. They gave that total power of decision making to ONE person in HHS. She set the standards and the penalties. Now how is a bureaucrat- a socialist if we are kind- going to square what she thinks is a good idea with the Congress assigning a cost to that standard?
Unworkable IF they follow the law.
Here is a NYT (Yes, UCK!)article from a liberal who has taken the time to study "the level of screwed" Roberts gave them.
ReplyDeleteRemember, as some critics say, what Roberts did can be undone so he should have been more hardlined. Problem is, if he was, THAT could still be undone by a future court.
Here is the link
http://www.nytimes.com/2012/07/01/opinion/sunday/no-respite-for-liberals.html?_r=1&src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fopinion%2Findex.jsonp
From the article:
The Roberts court has intensified the effort to reduce federal power. That the individual mandate was upheld should not overshadow the court’s ruling on Medicaid expansion — the part of the ruling that is most likely to affect other legislation in the near future.
For the first time since the New Deal, the court struck down an exercise of Congress’s spending power. It held that Congress lacked the power to deny Medicaid funds to states that refuse to expand their coverage. Chief Justice Roberts — joined by the liberal justices Stephen G. Breyer and Elena Kagan — held that while the government can deny additional Medicaid funds to states that refuse to expand their coverage, it cannot penalize them by rescinding current Medicaid payments.
This is a loaded gun indeed.
MANY state and local governments, universities and nonprofit agencies build their operations around federal financing. If the federal government can deny them additional money only when it adds conditions the recipients must meet, it will be hamstrung in ensuring compliance with critical federal objectives. For example, the government gives grants on the condition that recipients will not discriminate on the basis of race, sex and disability. If Congress adds sexual orientation to the list — which seems likely at some not-too-distant point — must it maintain existing financing for groups that defiantly persist in discriminating against lesbians and gay men?
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Ahhh, you findth yourself hoisted upon your own petard me lady?
To freaking bad. Sooner or later, we're going broke. Sooner or later, the checks won't clear or the dollar will be worthless paper.
It is better to start backing down the extreme level of entitlements and educate our citizens is what it takes to be of free will, learn to support themselves and their own futures, and how the government is not our Best Friend Forever.
As I mentioned to Don Surber on his Facebook page, I don't see this as a vast new federal power. Congress has always had the power to levy taxes, but passing tax legislation has always been unpopular, and this decision won't make it any more popular. If anything, passing legislation to increase taxes in this way just got almost impossibly hard, since now that voters are aware of it, they can look for it, and object strongly if anything that remotely resembles this is tried again. Ever.
ReplyDeleteThe Roberts' decision is worse than we are giving it credit for. It is now possible for you t be taxed on the income you should have earned rather than what you earned. For example, if you should be making $100K as an engineer, but decide to drop out and earn $25K as a part time gardener, it is now possible for you to be taxed on the full $100K you should have earned.
ReplyDeleteI don't think Roberts thought through his decision enough.