Thursday, June 28, 2012

“The constitution stops where the Internal Revenue Code begins.”

That's a phrase Glenn Reynolds recalls says given today's decision by the Supremes.
So it was upheld on a basis — the taxing power — that the Administration didn’t advance. In fact, Obama denied that it was a tax. This just supports what Mike Graetz told me in Tax class years ago: “The constitution stops where the Internal Revenue Code begins.”

Well, won't that set an unlovely precedent. And Glenn Reynolds notes suddenly, now the Court and 5-4 decisions are legitimate.

And what’s next? Republicans will have to push for repeal, or look like losers. Now Romney needs to make an issue of repealing the “Obama Healthcare Tax,” I guess.

And here's how Obama's Healtcare Tax was justified:
“Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it,” said the opinion.


On the upside, there's finally a limit to the Commerce Clause, on the downside, there's no limit to taxation.

And Steven Green notes that the genie is out of the bottle:
If this thing is a tax, then what can’t be construed as a tax? What worries me is, the precedent has been set. So even if this abomination is repealed next year, it seems Congress can do pretty much whatever it likes — so long as Chief Justice Roberts can get the idea into his head that it’s really just a tax.
...
The mandate though is not a tax, because it falls on you only if you refuse to do as ordered — as mandated. I can’t wrap my head around how Roberts wrapped his head around this."

And again, this was sold as not being a tax. Again, and again.

Deny it's a tax to get it passed in Congress. Claim it's a tax to get it upheld in Court. Nothing wrong with a little sugar to make the medicine go down, eh?

So hey, mandates are bad, and you can't push anything by the Commerce Clause but...
First, as far as I can tell, while this said Congress was limited under the Commerce Act, you can get the same effect through power of taxation. In other words, they can’t make you buy broccoli, but they can tax you for not buying broccoli.

Or: "So the government can tax a negative now. This is pretty big. For instance, if you DON’T buy an electric car, you can be hit with a special tax. "

Now, it doesn't have to be a tax on a negative. Here's Ed Morrissey with a different interpretation:

The opinion actually ruled that the mandate violates the Commerce Clause, but as a tax that no longer matters. It’s an interesting argument, but one that should have Americans worried. Basically, this is a tax that you have to pay to private companies.
....
My argument is this: the tax isn’t just on non-compliance, which is what Roberts and the court ruled constitutional. The law forces people to give money to private industry, in the form of buying health insurance. That’s a tax too, imposed by force on Americans, in this case the force of the penalties and the legal consequences of not paying them.

That's true, what kind of tax has it where you can either pay a private company or the State to avoid the ire of the IRS?

I do love the irony of Single Payer go-gos screaming for a law that results in such a corporatist feeding trough.

The Supreme Court has signed off on what is, in very practical terms, a tax levied by the insurance industry on Americans simply for existing. It’s an amazing, and fearsome, decision that really should have both Right and Left horrified.

Nevertheless, this is the law of the land. We can now look forward to taxes levied by the auto industry for not having bought a new car in the last seven years, the liquor industry for buying too few bottles of wine to maintain your health, and by the agricultural industry for not buying that damned broccoli after all."


I'll couple two points Steven Green and Ed Morrissey made.

1) The genie is out of the bottle. Even if *if* Obamacare gets repealed, the State can still use this argument for anything else they want.

2) You're not taxed only for non compliance. Complying is a tax too. In either case you have to fork over money under force of law.

Think Soylandra was bad? Imagine it without the middlemen. Buy a Volt or else.

Again it's funny how the Single Payer, nationalization, anti-corporate do gooders are so gleeful about a precedent that means anyone with enough juice can now setup their own personal tax by renting the IRS.

They freak out about Citizens United, but cheer this decision.

A decision where corporations can lobby to force people to buy their products, and the state can levy new taxes that you can opt out of by paying said corporations.

Or more darkly they can mandate lifestyle rules and choices on the citizens and as long as you cut the right check to the IRS, you get your indulgence and can do what you want.

Oh and remember under the IRS the burden of proof is on you. You are presumed guilty of tax arrears until you can prove your case.

Egalitarianism! Social Justice!

Ace sums it up: "The government may now, per Justice Roberts, assign special taxes on people if they do not live their lives the way the government prefers."

There's some small upside, in that at least the majority on the court didn't go with the Commerce Clause reasoning. At least pushing a new tax through is less palatable among voters (those that pay taxes at least) and tax measures are easier to repeal.

But with this ruling the Court has enshrined the idea of punitive, indulgence based, taxation.

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