It is with interest that I've been
noting liberal comment applauding Roberts's upholding of the ACA even while
conceding his legal reasoning on the tax/penalty issue leaves something to be desired,
isn't persuasive and suffers from some conceptual confusion. For that reason, I
got interested in the joint dissent's reasoning against Roberts's turning the ACA’s
stated penalty into a tax. Here's my paraphrase of it:
...In all SCOTUS cases a tax and a
penalty are mutually exclusive. A penalty can be formulated to be a tax and
vice versa. But neither at the same time can be the other. It is not "fairly
possible" to read the ACA mandate to be a tax for a variety of reasons.
Against the judicial need to "fairly read" the mandate as a tax, if
possible, to save its legality is the limit of not rewriting it. The court
can't pervert the meaning of the law in trying a "fairly possible"
reading of it.
A tax is an enforced contribution to provide for the support of government; a penalty is an exaction imposed by statute as punishment for an unlawful act. A "tax” can be so onerous as to be held to be a penalty. But a "penalty" has never been held to be so trivial as to be a tax. An exaction imposed for violation of the law has never been held to be an exercise of Congress’ taxing power—even when a statute calls it a tax, much less than when (as in the ACA) the statute repeatedly calls it a penalty. When an act imposes a monetary penalty as principal consequence for its violation, it always creates a regulatory penalty, not a tax.
Here the mandate can only be fairly read as a command. The minimum-coverage provision is entitled “Requirement to maintain minimum essential coverage.” It commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage.” And the immediately following provision states that, “[i]f . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.” Too, several of Congress’ legislative “findings” with regard to ACA confirm that it sets forth a legal requirement and constitutes the assertion of regulatory power, not mere taxing power. The “shall” of the mandate is contained in the main operative provision of the act and cannot be fairly read as a "may."
That Congress in its own words imposed in the ACA a penalty for failure to buy insurance renders that failure unlawful. A canon of interpretation is that a statute penalizing an act makes it unlawful. If a statute inflicts a penalty, the penalty implies a prohibition, and its breach is unlawful, even though there are no prohibitory words in the statute.
Courts never classify as a tax an exaction imposed for violation of the law. And they never classify as a tax an exaction described in the statute as a penalty. Courts have sometimes called an unlabeled exaction for something other than a violation a tax. But courts have never treated as a tax an exaction which meets the criteria for a penalty, especially when the subject law explicitly calls the exaction a penalty. Congress calls the ACA exaction a penalty eighteen times throughout the ACA.
Some by the ACA are exempt from the tax but still must comply with the mandate. This distinction only makes sense if the mandate actually is a mandate. Three classes of people are exempt from the minimum coverage requirement. Then further classes of people who are subject to this requirement are exempt from the "tax." If the penalty were truly a tax, the two classes of exemption would make no sense since under the tax theory there is no command, which means all the exemptions would attach to the penalty (renamed tax) alone.
Penalty collections via the IRS are not rare. And varying a penalty according to ability to pay is a familiar practice.
The presence of a mens rea requirement suggests a penalty; but the absence of this requirement does not necessarily suggest a tax. Penalties for absolute-liability offenses are commonplace. And where a statute is silent as to intent, courts traditionally presume mens rea for a severe penalty. Jurisprudence addresses when an intent requirement can be inferred from a penalty. So it makes no sense to say that a penalty is not a penalty for want of an express intent requirement.
Judicial tax rewriting is troubling. Taxes are unpopular. They must originate in Congress. Thereby legislators can weigh the need for tax increases against the consequent unpopularity. Therefore Congress knew it was doing when it formulated the penalty provision over a tax provision in the ACA, which an earlier version of the statute contained before rejection. Judicially imposing a tax inverts this constitutional scheme, placing the power to tax in the judiciary, the least accountable branch of government to the citizenry...
A tax is an enforced contribution to provide for the support of government; a penalty is an exaction imposed by statute as punishment for an unlawful act. A "tax” can be so onerous as to be held to be a penalty. But a "penalty" has never been held to be so trivial as to be a tax. An exaction imposed for violation of the law has never been held to be an exercise of Congress’ taxing power—even when a statute calls it a tax, much less than when (as in the ACA) the statute repeatedly calls it a penalty. When an act imposes a monetary penalty as principal consequence for its violation, it always creates a regulatory penalty, not a tax.
Here the mandate can only be fairly read as a command. The minimum-coverage provision is entitled “Requirement to maintain minimum essential coverage.” It commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage.” And the immediately following provision states that, “[i]f . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.” Too, several of Congress’ legislative “findings” with regard to ACA confirm that it sets forth a legal requirement and constitutes the assertion of regulatory power, not mere taxing power. The “shall” of the mandate is contained in the main operative provision of the act and cannot be fairly read as a "may."
That Congress in its own words imposed in the ACA a penalty for failure to buy insurance renders that failure unlawful. A canon of interpretation is that a statute penalizing an act makes it unlawful. If a statute inflicts a penalty, the penalty implies a prohibition, and its breach is unlawful, even though there are no prohibitory words in the statute.
Courts never classify as a tax an exaction imposed for violation of the law. And they never classify as a tax an exaction described in the statute as a penalty. Courts have sometimes called an unlabeled exaction for something other than a violation a tax. But courts have never treated as a tax an exaction which meets the criteria for a penalty, especially when the subject law explicitly calls the exaction a penalty. Congress calls the ACA exaction a penalty eighteen times throughout the ACA.
Some by the ACA are exempt from the tax but still must comply with the mandate. This distinction only makes sense if the mandate actually is a mandate. Three classes of people are exempt from the minimum coverage requirement. Then further classes of people who are subject to this requirement are exempt from the "tax." If the penalty were truly a tax, the two classes of exemption would make no sense since under the tax theory there is no command, which means all the exemptions would attach to the penalty (renamed tax) alone.
Penalty collections via the IRS are not rare. And varying a penalty according to ability to pay is a familiar practice.
The presence of a mens rea requirement suggests a penalty; but the absence of this requirement does not necessarily suggest a tax. Penalties for absolute-liability offenses are commonplace. And where a statute is silent as to intent, courts traditionally presume mens rea for a severe penalty. Jurisprudence addresses when an intent requirement can be inferred from a penalty. So it makes no sense to say that a penalty is not a penalty for want of an express intent requirement.
Judicial tax rewriting is troubling. Taxes are unpopular. They must originate in Congress. Thereby legislators can weigh the need for tax increases against the consequent unpopularity. Therefore Congress knew it was doing when it formulated the penalty provision over a tax provision in the ACA, which an earlier version of the statute contained before rejection. Judicially imposing a tax inverts this constitutional scheme, placing the power to tax in the judiciary, the least accountable branch of government to the citizenry...
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