Hi All,
As I'm sure anyone who reads this will know, the Supreme Court of the United States ruled that the individual mandate portion of the Affordable Care Act (aka ObamaCare) is Constitutional. To my surprise, the Supreme Court did not decide upon its Constitutionality with respect to the Commerce Clause. In my opinion, this brings both good and bad news to the table.
The good news is that the Court effectively said that, no, Congress cannot exercise unlimited power under the Commerce Clause loophole. Unfortunately, the Court has effectively granted Congress significantly more power under the tax code! The Court uncovered a way to uphold the legislation by saying that the penalty to be issued to those who do not buy insurance is a tax. The Supreme Court argues that the law is Constitutional as a tax because the tax code allows taxes that discourage certain behaviors. For instance, there are high taxes on cigarettes and alcohol which aid in discouraging people from purchasing these products. I highly disagree with this argument because those taxes do not really discourage people from buying those products. These "sin" taxes take advantage of goods with inelastic demand and use them to raise revenue for the federal government. If these taxes were to truly discourage people from purchasing these products, then the government would simply raise the tax to the point at which no one was willing to purchase them.
The scary part about this situation is that the Court has said that the government cannot force you to buy health insurance, but they can tax you if you don't. This is a distinction without a difference. If the government has the power to tax you to coerce your behavior, then they can simply raise the tax to a point that would force you to buy insurance (in this case). Essentially Congress is being allowed to do through the tax code what it is unable to settle with Constitutional legislation. If you apply this logic to a different scenario, the implications could be quite serious. For example, say that after failing to pass legislation that would ban all citizens from purchasing guns due to unconstitutionality, the federal government simply devises a new tax that is so high that it makes it impossible for anyone to purchase a gun. This could allow the federal government to deny you fundamental Constitutional rights.
The comical part about this case was that the Supreme Court acknowledged the possibility that the Congress could coerce behavior through taxes but still provided that it is Constitutional because the penalty for not purchasing insurance is too low and insignificant. Since it would be far cheaper to simply pay the penalty (tax), they are in effect saying that this legislation is Constitutional because it will be ineffective. The Supreme Court also justified the legislation because there is no way to enforce the penalty (tax) on the people. The Affordable Care Act clearly states that the IRS does not have jurisdiction over this tax, so there is no way to collect it from those not willing to pay it.
Due to this fact and the other provisions in the ACA legislation, it is very likely that many people will not buy insurance until they get sick since they will not be denied for pre-existing conditions. By having a only people that are sick paying insurance premiums, it will be an excellent way to fast track a total collapse of the healthcare system.
A major problem with this decision is that even as a tax, the bill should still be unconstitutional. The federal government does not have unlimited tax power. There are two types of taxes, indirect taxes and direct taxes. An indirect tax might come from something like alcohol or cigarettes where the tax is built into the price of a product. A direct tax is a tax where you essentially send money directly to the government. Here's the catch though, a direct tax must also be apportioned! The only direct tax that is not apportioned is the income tax and that was only deemed Constitutional after the passing of the 16th Amendment - which only applies to income. If the government is imposing a tax that applies to all Americans who do not wish to buy healthcare and you pay the penalty directly to them, then it's a direct tax! In order for it to be Constitutional, it must either be an apportioned tax or Congress must pass a Constitutional Amendment to allow for an unapportioned direct tax on those who are not willing to purchase healthcare.
I think it is quite clear that the Supreme Court was grasping at straws in order to get this legislation passed, which is an absolute disgrace to this country. This is unadulterated bench legislation because in order to argue Constitutionality, the Supreme Court must have applied their own definition to the term direct tax. This is also very unfortunate because this decision will further open the door for Congress to increase its power under the tax code.
Well said Bob!
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