RobertsCare – The Continuing Saga

(If you haven’t done so, please read last week’s blog – RobertsCare – which is Part I of this post.)

Rumors leaking out of the Supreme Court suggest Roberts was aligned with Kennedy and the conservative wing of the Court after hearing arguments and had decided the mandate was unconstitutional. Sometime toward late April, he went over to the Dark Side for reasons only he knows. Joining the liberal wing, he had an epiphany that the mandate could be constitutional under the taxing power of Congress. For a month his colleagues on the right tried to woo him back into the fold – to no avail.

The outnumbered conservatives plus Kennedy, whose traditional “swing vote” status had been usurped by Roberts, went ballistic in their dissent:

The government and those who support its position on this point make the remarkable argument that [the mandate] is not a tax for purposes of the Anti-Injunction Act, but is a tax for constitutional purposes. That carries verbal wizardry too far, deep into the forbidden land of the sophists.

If you’re scratching your head over the squirrely tax logic of RobertsCare, the decision of its provisional author concluded that the federal government can’t make people buy health insurance, but it can impose a tax on people without health insurance. And what a tax it is – the largest in history! It will cost Americans $800 billion annually, according to the Joint Committee on Taxation. Of the 21 new or enlarged taxes in the Act, seven fall on people making under $200,000. Notwithstanding Obama’s “promise” that he would not raise taxes on the middle class – “not one dime” was what he promised – ObamaCare is going to cost Americans $2.6 trillion over the next decade. That’ a lot of dimes.

But that’s not the most troubling aspect of the “mandate wolf” in “tax clothing.” Eighteen times in the ObamaCare Act it calls the consequence of failing to have health insurance a penalty, not a tax. Roberts held the position that, regardless of what Congress called it, it operates like a tax. The distinction is important because a tax is an “exaction” whose purpose is to raise revenue. The purpose of a penalty is to compel a desired response – the “or else” that accompanies policing power – and in the hands of the feds, such penalties are a violation of the 10th Amendment. Penalties are designed to make compliance more attractive to a person than non-compliance – i.e. “the penalty fits the crime.” But Roberts argued that the monetary consequence for not buying or having health insurance is so much less than the actual cost of the insurance that it can’t be a penalty; therefore, it must be a tax within the taxing power of Congress. At least that was Roberts’ understanding in his binary world and he was sticking to it.

One might ask what happens if non-compliance is so widespread – a real likelihood – that Congress raises the cost of non-compliance? At which point does the tax then become a punitive penalty violating the 10th Amendment? RobertsCare has laid the groundwork for Congress to use taxes to motivate citizen behavior, and yet if Congress crosses some unspecified dividing line from taxing to penalizing – a no-no for the feds – is Roberts going to review every mandate tax increase and every other behavior-modifying tax to determine if it’s really a penalty and thus illegal?

Here’s another question. Article I, Section 2, Clause 3 of the Constitution says:

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers …

Note the word “apportioned” because Article I, Section 9, Clause 4 further says:

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.

In other words, direct taxes are only legal if they are apportioned among the states according to population. A tax is “direct” if it is imposed on a person or his property, whereas an “indirect tax” is imposed on transactions, like a sale or transfer. The latter are often called excise taxes.

Direct taxes were abhorrent to 18th century Americans. They were arbitrary, discriminatory, “head taxes” that were unavoidable. The justification for their levy was simply that a person existed – an inescapable fact. Property could also be direct-taxed because it too existed and couldn’t escape its existence. If the tax was too onerous to pay, property would be expropriated. In contrast, an indirect tax could be avoided by avoiding the transaction on which it was based. Understanding the abuses of direct taxes, the authors of the Constitution severely limited Congress’ ability to impose them, specifying that direct taxes had to be apportioned by population. For those who live in Palm Beach County Florida, land of hanging chads, that means everyone pays the same tax.

So how does Congress get away with its discriminatory taxing of income (property)? It’s called the 16th Amendment to the Constitution, which established the income tax – an unapportioned tax which fell on about 2% of the population at the time. No other direct taxing is permitted by our current Constitution. Taxes on cigarettes, alcohol, and sales taxes are indirect excise taxes that can be avoided by not consuming these and other products.

But the “mandate tax” is not avoidable. You pay it or buy a product you don’t want. Either way, you’re out money and can’t escape payment in one form or another. If you haven’t purchased insurance, you notify the government on your income tax filing and the tax is withheld from any refund due from the IRS. If you have purchased insurance, you owe nothing. So suppose all of the citizens of Georgia have health insurance, but those of Ohio don’t. Ohio citizens pay the tax and Georgia citizens don’t. That looks like a direct tax to me. It is not apportioned by population so it’s an illegal direct tax.

There’s one other characteristic the strange tax invented by RobertsCare: it operates like no other tax I know. If you owe tax to a state or the federal government, they have the right to be paid. It’s a criminal act not to pay. Liens can be filed against property or property can be seized, fines and interest can be levied, jail terms can be meted out. Not so with the “mandate tax.” No liens, no levies, no wage garnishments are allowed in the ObamaCare Act. The only thing the government can do is withhold taxes you overpaid. So, don’t overpay your taxes. What’s the government going to do?

Therefore, is the Roberts “tax” really a tax? Taxes raise revenue. If everyone complied with the mandate, the revenue raised by the RobertsCare tax would be zero. Sounds like a federal penalty to me. Direct federal tax or federal penalty … whatever … I’m no lawyer but both are illegal under the Constitution as I read it.

Because the mandate survived the Court’s opinion, the severability issue never became germane. Severability is a complex constitutional issue going all the way back to Marbury in which the Chief Justice struck down part but not all of the Judiciary Act of 1789. News leaking out after the Court’s ObamaCare decision indicates there was considerable wrangling over striking down the entire law, which had no severability provision (probably by design.) This could have been a disaster because ObamaCare is so interconnected (District Judge Vinson likened it to a watch), and parts of it have already activated and are popular – guaranteed issue for example. Striking down the mandate and leaving the rest of ObamaCare intact would be tantamount to a line item veto by the Court. Some of the Court leaks say this is why Roberts initially supported striking down the mandate, but unable to reconcile the warring factions concerning severability, he joined the liberals in a convoluted search to find a way to save the mandate under the taxing provision of the enumerated powers.

With severability a non-issue, the last thing the Court had to decide was the coercive expansion of Medicaid under ObamaCare. Starting in 2014 states were required to expand Medicaid to all non-elderly individuals with family incomes below 138% of the federal poverty level, which is currently $23,050 for a family of four. ObamaCare picks up the cost of expanded benefits (but not administration cost) for the first three years. States bear all costs for administration, which will be significant since participation is expected to grow by 50%. Beginning in 2017 states must begin to assume a share of the expanded benefit costs. The state cost-sharing will max out at 10% in 2020.

States are also required to set up insurance exchanges that will allow people within 100% to 400% of the federal poverty line to buy subsidized insurance.

If the states don’t play, they pay – all Medicaid funding to the state will be terminated. Wow! That’s a big “or else.” And it’s also an illegal use of police power.

Seven of the justices concurred that the expansion of Medicaid was a new program – not an extension of current Medicaid programs. The same seven justices ruled against coercing adoption of the insurance exchanges. According to Roberts, the new program puts a “gun to the head” of the states unless participation is voluntary, not coerced by the threat of losing Medicaid funds. The ObamaCare threat to withdraw all Medicaid support would cause financial instability among the states, the Court ruled, and was an assault against state sovereignty, which the Court is now on record as supporting.

On balance, allowing the mandate to survive by calling it a tax is a lousy decision. Instead of using the Commerce Clause to modify behavior, the ever-growing imperialism of Congress can now accomplish the same thing with a tax. The feds want you to buy a certain type car, put solar panels on your roof, lose weight? Pass a non-compliance tax.

But, Roberts argues, you can throw the bums out for raising your taxes. Well, we can also throw out the bums for abusing the Commerce Clause, but we haven’t. Lincoln said people get the kind of government they deserve. And an indifferent electorate has sown the wind and reaped the congressional whirlwind most of my life. It gets worse each year. Currently only half of the income-earners pay taxes. The other half, who happen to vote, aren’t going to get their panties in a wad over Congress’ taxing power. When a majority of taxes are paid by an ever-shrinking minority, when do taxes cease to be a revenue-raising device and become instead a success penalty – an instrument of class envy, which this president has used as no other predecessor has?

Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.

"It is not our job," Roberts wrote, "to protect the people from the consequences of their political choices"? True enough. But it is the Court's job to defend the liberty of the country’s citizens when the political leaders exceed the limitations imposed by the Constitution. It’s not the Court’s job to strain at a gnat so, as Roberts asserted, “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” The liberal activist judges in the federal court system don’t hold that view. Contrary to the Roberts sophistry, it’s not the Court’s job to ignore “the most natural interpretation of the mandate,” which the conservative dissenters chose, in search of a “fairly possible” interpretation, which the activists joined by Roberts chose. ObamaCare repeatedly called the consequence of not buying insurance a penalty. By what rationale can the Court ignore what its authors claimed they were doing and call it something else?

As I have repeatedly said in previous blogs, political society in America is made up of makers and takers. Mitt Romney may not be the breathless dream candidate the makers had hoped for. But in 2012, Romney is not the central issue of the election. The 2012 election is a referendum on a man with no record in 2008 who has a record in 2012. It’s a referendum to give him four more years of implementing his remaking of America, as he has done, or to take a new direction. So, in just four months the electorate will cast its vote for Obama or against Obama – more so than it will choose one candidate over the other.

Obama’s political forbearers gave us Social Security, Medicare, and Medicaid, each of which has blown through the projected financial burden they laid on backs of productive society and they now threaten to overtake society’s ability to create wealth. According to the CBO, the burden of ObamaCare will dwarf these prior programs.

The 2,700 pages of the ObamaCare bill have now morphed into 13,000 pages of regulations (at last count), 180 new bureaucratic agencies staffed by people with IQs hovering around room temperature, 16,500 new IRS agents to harass private citizens and meddle in their affairs, and a massive transfer of power from an elected Congress to an unelected Secretary of Health and Human Services and her flying monkeys who will control one-seventh of our economy. Moreover, it establishes the Independent Payment Advisory Board, which will make decisions to ration care that are not reviewable by courts and are beyond the control of our elected Congress. There will be Medicare cuts, mandates for affirmative action in medical and dental schools, interference in the way doctors practice medicine, and restrictions on religious freedom, which the Catholic Church has already experienced.

And you thought you and your grandchildren were free citizens living under a democratically-elected government? "The nearest thing to eternal life we will ever see on this earth is a government program," said Ronald Reagan. And the last thing a government program is designed to be is accountable to the people who run this country, the Framers said, through elected representatives.

If Obama is ousted this fall, the new president can refuse to enforce the ObamaCare mandate tax by executive order. If a Republican majority is elected in both houses of Congress, they can repeal all or parts of ObamaCare in budget reconciliation with a simple majority – which defeats Senate Democrats’ ability to filibuster.

Two weeks ago we celebrated the 236th anniversary of our forefathers’ throwing off the yoke of an oppressive king and his administration whose agents in this country were a constant reminder that our forefathers were not truly free. They were as free as their overlords would tolerate. I have lived through the administrations of 13 presidents. None has frightened my sense of personal freedom and well-being as the incumbent president. So I’ll close with this warning from Ronald Reagan:

Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free.

Exercise your freedom. Vote on November 6.