Why Did the Court Uphold the Affordable Care Act as a “Tax”

[I won’t likely have time to do any deeper analysis of the decision until the distant future, in news-cycle terms.  At any rate, the decision upholding the Affordable Care Act, aka Obamacare, is too important not to offer an initial reaction.]

Although there was consensus that Chief Justice John Roberts would author the opinion, it was also widely assumed that he would follow traditional swing-voter Justice Anthony Kennedy.  That is, if Kennedy voted with the liberals to uphold the law, Roberts would side with him so he could author a narrow opinion.  That didn’t happen, as it turns out.  Kennedy voted with the conservatives to overturn the entire law, and Roberts sided with the liberals on the Court to uphold it.

What was perhaps even more unexpected is that Roberts, who agreed with the conservatives that the individual mandate was not supported under either the Commerce Clause or the Necessary and Proper Clause, found the law was constitutionally supported as a tax.  This is surprising because even the Administration seemed to agree this was the lamest of its arguments. It was in fact only the second backup argument advanced by the Administration. And Roberts himself only devotes about a page to explaining why it’s not unconstitutional as a direct tax (i.e., because it is not equally apportioned, but only selectively assessed against certain individuals who fail to obtain government-approved health insurance).  It’s pretty obviously not an income or excise tax.

So, what kind of tax is it?

It’s also not a tax for purposes of the Tax Anti-Injunction Act, according to Roberts and the majority. Again, from reports I’ve read of the opinion (not the opinion itself, yet), the analysis on this is pretty thin.

Again, what kind of tax is it?

A magic tax, apparently. Kind of how the California Supreme Court treats pensions as a different kind of contract so as to evade the state constitution’s prohibitions on gifts, retroactive benefits, and taxes beyond the fiscal year, but never gives reasons therefor. It’s a magic contract.

This is why I’m led to the conclusion that this is a political decision: I was not convinced before today of complaints that the Court was improperly influenced by politics, but I am now so convinced after reading parts of Chief Justice Robert’s opinion and reports of same. Joining the other conservatives in striking down the law would have been much easier for him to square with Roberts’ constitutional philosophy. But I think Lawrence Tribe basically got him right yesterday: Roberts was worried about how a decision invalidating the law altogether would reflect on the Court in the eyes of the American people, regardless of the merits of the decision. In my view, unless there was a real existential threat to the Court, the decision is lamentable if this is the reason for upholding the ACA as a “tax.”

That said, I also wonder at the political effect of calling this a tax. NPR mentioned that the “tax” (about $200) is only about a tenth of the cost of a basic health plan for young people (about $2,000), the demographic the “tax” is aimed at. And yet Fox News mentioned that the “tax” is already the biggest tax hike in history. It will be interesting to see how this plays out if indeed the “tax” is insufficient to get young healthy people to buy insurance, which the ACA absolutely depends on to make its other provisions work.

I’m also relieved at the limitations on the Medicaid mandates on the states. It’s not as easy to get political support to push back on states rights issues, so it is important that the Court respected that limit on federal power.

I’m also relieved that the Commerce Clause has been limited, for now. I enjoyed Justice Thomas’s two-page dissent, which says, in essence:  When you have mushy Commerce Clause jurisprudence as we do, one ought not be surprised when lawmakers think they can do anything they want. The message to lawmakers has been made clear (for now, at least): They can’t. Not unless they come right out and call it a “tax.”

So in a roundabout way, the Court responded to complaints about being overly political by becoming more political: They punted the constitutional issue back to the people, and at the same time gave opponents of the ACA a powerful rhetorical device for the November election by calling the mandate a “tax” — a substantial and regressive one at that.

All in all, it’s not a principled opinion in either direction.  It’s not even a pragmatic decision.  It’s a tactical one.  For that reason, I’m disappointed for reasons that, quite frankly, I didn’t expect.

Tim Kowal

Tim Kowal is a husband, father, and attorney in Orange County, California, Vice President of the Orange County Federalist Society, commissioner on the OC Human Relations Commission, and Treasurer of Huntington Beach Tomorrow. The views expressed on this blog are his own. You can follow this blog via RSS, Facebook, or Twitter. Email is welcome at timkowal at gmail.com.

Comments are closed.