Category: Government

Given the recent Supreme Court decision expanding Congress’ powers to tax, would it be worthwhile to get behind an effort to amend the Constitution to clarify what a direct tax is? The mandate is hated enough that there might be enough states that would get on board. We need not reach issues like repealing the 16th Amendment, but just to clarify that any tax applied directly to individual citizens or property, and not relating to the sale or purchase of goods (excise taxes), importations or exportations (tariffs), and other than taxes explicitly authorized by the Constitution (taxes on incomes), are forbidden to Congress. Note that this would also eliminate the apportionment requirement, but has Congress ever even used that? What would be good proposed language? Here’s a quick off the cuff stab:

Section 1. The power of Congress to weigh and levy taxes shall under no circumstance be interpreted to allow persons or their property, to be directly taxed, regardless of whether such a tax is apportioned among the several States. Direct taxation shall include all taxes levied directly upon a person, regardless of purpose, and shall include, but is not limited to, capitations, taxes on real and personal property, and any tax levied against an individual directly, whether a capitation or not, which is intended to be punitive in nature, or not intended specifically for the purpose of raising revenue.

Section 2. The first section shall not be construed to interfere with Congress’ power to weigh and levy indirect taxes, such as excise taxes on the sale or manufacture of goods, tariffs on importation or exportation of goods, nor interfere with the power to tax incomes in the manner explicitly authorized by this Constitution.

Section 3. Nothing in the first section shall be construed to interfere with Congress’ power to set fines or other criminal penalties in the exercise of its enumerated powers under this Constitution.

Much like Progressives in the first part of the 20th century, I think in the 21st, those in the center-right coalition ought not fear amending the Constitution to deal with excesses of government. Feel free to debate this language, or add your own in the comments.

I actually think the Supreme Court decision is bad news for Obama’s re-election campaign, because it will get people angry at health care all over again. So the contempt vote against Holder will just be piling on. What do you think?

Deviating from our usual topic a bit, the mandate survives, apparently as a legitimate exercise of Congress’s power to weigh and levy taxes. The federal government’s power to terminate state medicaid funds is limited. I haven not yet read the opinion. But it looks like Chief Justice Roberts wasn’t convinced. From the opinion:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.

That’s good, at least. I’m really curious as to Justice Robert’s logic as to how the health care mandate is not a direct tax. Orin Kerr mentions “That’s kind of funny, given that it’s the one argument we didn’t focus on much.” Probably because it was the most patently ridiculous argument, since direct taxes are forbidden by the constitution, the health care mandate is decidedly, as a tax, direct. The only direct tax the constitution allows is income taxes, and this is not an income tax. So what’s the justification?

UPDATE: Here’s the section on the logic from direct taxes:

Even if the taxing power enables Congress to impose a tax on not obtaining health insurance, any tax must still comply with other requirements in the Constitution. Plaintiffs argue that the shared responsibility payment does not do so, citing Article I, §9, clause 4. That clause provides: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” This requirement means that any “direct Tax” must be apportioned so that each State pays in proportion to its population. According to the plaintiffs, if the individual mandate imposes a tax, it is a direct tax, and it is unconstitutional because Congress made no effort to apportion it among the States.

Even when the Direct Tax Clause was written it was unclear what else, other than a capitation (also known as a “head tax” or a “poll tax”), might be a direct tax. See Springer v. United States, 102 U. S. 586, 596–598 (1881). Soon after the framing, Congress passed a tax on owner- ship of carriages, over James Madison’s objection that it was an unapportioned direct tax. Id., at 597. This Court upheld the tax, in part reasoning that apportioning such a tax would make little sense, because it would have re- quired taxing carriage owners at dramatically different rates depending on how many carriages were in their home State. See Hylton v. United States, 3 Dall. 171, 174 (1796) (opinion of Chase, J.). The Court was unanimous, and those Justices who wrote opinions either directly asserted or strongly suggested that only two forms of taxation were direct: capitations and land taxes. See id., at 175; id., at 177 (opinion of Paterson, J.); id., at 183 (opinion of Iredell, J.).

That narrow view of what a direct tax might be per- sisted for a century. In 1880, for example, we explained that “direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate.” Springer, supra, at 602. In 1895, we expanded our interpretation to include taxes on personal property and income from personal property, in the course of striking down aspects of the federal income tax. Pollock v. Farmers’ Loan & Trust Co., 158 U. S. 601, 618 (1895). That result was overturned by the Sixteenth Amendment, although we continued to consider taxes on personal property to be direct taxes. See Eisner v. Macomber, 252 U. S. 189, 218–219 (1920).

A tax on going without health insurance does not fall within any recognized category of direct tax. It is not a capitation. Capitations are taxes paid by every person, “without regard to property, profession, or any other circumstance.” Hylton, supra, at 175 (opinion of Chase, J.) (emphasis altered). The whole point of the shared responsibility payment is that it is triggered by specific cir- cumstances—earning a certain amount of income but not obtaining health insurance. The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.

So Robert’s seems to be siding here with a view, that has some historical root, that the prohibition on direct taxes should be interpreted rather narrowly. You know, sometimes I wish I had a time machine, and could go back in time and shout “You guys need to be f**king specific when you write this stuff!”

Maybe we should have spent more time in the confirmation hearings probing the Chief Justice’s views on direct taxes.

UPDATE: More from David Bernstein on the perils of shortsightedness: “As I noted several times on this blog, the Bush Administration had one primary criterion for its judicial nominees: whether a nominee was likely to vote in favor of the government in War on Terror cases.”

UPDATE: I do have to say, of all the ways the mandate could have been upheld, this is probably the least damaging way. It would have been awful to have this be a Commerce Clause decision, or a Necessary and Proper decision. Robert’s opinion still seems to indicate there are limits to how far Congress can take this new taxing power he is giving them.