Congress’s taxation power: The new Interstate Commerce Clause

Although Thursday’s Supreme Court’s ruling on the Affordable Care Act restricted the degree Congress can use the Interstate Commerce Clause, the decision’s expansion of Congress’s taxing power sets a bad precedent.

Some conservatives hunting for a silver lining have argued that at least the ruling limited the reach of the Commerce Clause.

But what have we gained?  What good is restriction of the Commerce Clause if, due to the expansion of other powers, it can’t protect us from abominations like Obamacare?

Thanks to Chief Justice Roberts, we now know that the federal government can levy taxes for any reason it wants, whether it needs the money for any enumerated power or not — and remember that the individual mandate, if it operated properly, would result in $0 revenue.

The ruling expanded Congress’s taxation power in at least three ways.  First, we now know that non-activity can be taxed.  When has the federal government ever taxed non-activity?  Penalized, yes—but taxed our not doing something?

Second, we know that even something that was explicitly disavowed as a tax by its creators and defenders can be considered a tax, if five Supreme Court justices feel like rewriting the law and considering it one.

The Supreme Court rejected the Obama administration’s justification for the Affordable Care Act’s individual mandate as being covered by the Interstate Commerce Clause, since the law as written would not regulate commerce but compel it.

The court found that it was constitutional for Congress to tax people who refuse to buy health insurance from private companies through the mandate.

The administration asked the court to consider the mandate a tax for the purpose of preventing the plaintiffs from suing, since the Tax Anti-Injunction Act only allows taxes to be challenged in court after they have been paid.

Roberts and the majority agreed that the penalty could not be considered a tax for the question of whether the plaintiffs could bring suit now.

The chief justice admitted, “Congress’s decision to label this exaction a ‘penalty’ rather than a ‘tax’ is significant because the Affordable Care Act describes many other exactions it creates as ‘taxes.’”

Yet in the majority opinion he wrote, “The federal government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.”

And therein lies the rub: Not purchasing health insurance is not an “activity.”  It is a non-activity.  (The hint is the word “not.”)

According to Roberts’ (correct) reasoning, “not buying health care” is not a commercial activity the government can regulate through the Interstate Commerce Clause.  Yet somehow “not buying health care” is a commercial activity the government can tax.  How can “not buying health insurance” be non-activity and activity at the same time?

“[T]he power to tax… was designed to enable Congress to obtain the funds needed to carry out its other enumerated powers or ends.  It was not, as Madison made clear in Federalist 41, and often on the floor of Congress, an independent power to tax for any purpose at all,” Roger Pilon writes in a column on Real Clear Politics. “Search as you will through those 18 enumerated powers and you will find no power to enact Obamacare or anything like it.”

So now we can rest assured that Congress will never mandate that we buy broccoli, drink skim milk, or do calisthenics. It’s just going to tax us to death if we don’t, and with the imprimatur of a “conservative,” Republican-appointed Supreme Court chief justice.

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