Posted by Curt on 6 July, 2012 at 10:16 am. 1 comment.


There’s been a big dust-up in the media this week as to whether or not Republicans agree with Supreme Court Chief Justice John Roberts that Obamacare’s individual mandate is a tax. What the media didn’t tell you is that John Roberts didn’t invent this argument. Indeed, he learned it from…President Obama, whose lawyers have argued all along, in court, that the individual mandate is a tax. It’s particularly notable, given the fact that candidate Obama, in 2008, swore up and down that he wouldn’t raise taxes on middle-class Americans.

There are dozens of examples, all on-line and on the record. Because I like to think I have a life, I’ll only pull up a representative sample of them. The argument that the Obama administration made repeatedly in court was that the individual mandate was a tax, and that the Anti-Injunction Act of 1867 forbids lawsuits against taxes that have not yet gone into effect. Indeed, the administration won on these grounds in the Fourth Circuit Court of Appeals, where a three-judge panel vacated and remanded two Obamacare challenges:Virginia v. Sebelius and Liberty v. Geithner.

Obama in the Fourth Circuit

Here’s how Acting Solicitor General Neal Katyal put it in his February 2011 brief to the Fourth Circuit inVirginia v. Sebelius (p. 36): “The minimum coverage provision,” that is, the individual mandate, is “independently authorized by Congress’s taxing power…The minimum coverage provision appears in the Internal Revenue Code and operates as a tax. It is projected to raise billions of dollars in revenue each year.”

He reiterates this point later in the brief (p. 72): “The practical operation of the provision is a tax. Individuals who are not required to file income tax returns for a given year are not required to pay the penalty…The amount of any penalty is calculated in part by reference to household income for federal income tax purposes; it is reported on the individual’s federal income tax return for the taxable year and is assessed and collected in the same manner as certain other federal tax penalties…In short, the minimum coverage provision is a tax in both administration and effect.”

Katyal makes the point repeatedly in his reply brief in the same case. “The minimum coverage provisionoperates as a tax and will produce billions of dollars in annual revenue,” he declares on page 46. “There is no doubt that the ‘practical operation’ of the minimum coverage provision is as a tax.” Katyal notes (p. 52) that “the taxing power was expressly invoked in the Senate to defeat constitutional points of order against the minimum coverage provision…And during the legislative debates, congressional leaders defended the provision as an exercise of the taxing power.”

Obama in the Eleventh Circuit

So that’s Virginia v. Sebelius. How about Florida v. HHS, the case that made it to the Supreme Court? Katyal said pretty much the same things in his briefin that case (p. 21): “The minimum coverage provision is also independently authorized under Congress’s taxing power…The provision thus operates as a tax, and it is projected to raise billions of dollars in revenue each year.”

Again echoing his arguments in Virginia v. Sebelius, he writes (p. 50): “The ‘practical operation’ of the minimum coverage provision is as a tax…Congress plainly did not conceal the fact that the provision operates as a tax…Congress placed the provision in the Internal Revenue Code and required that payment be included on individual income tax returns, an entirely transparent approach. Moreover…congressional leaders defended it as an exercise of the taxing power…In short, the minimum coverage provision is a tax in both administration and effect.” Katyal reiterated these points in oral argument.

Obama at the Supreme Court

For the Supreme Court proceedings, Solicitor General Donald Verrilli’s briefon the legality of the individual mandate makes the point again and again. “Congress assigned adverse tax consequences to the alternative of self-insuring,” writes Verrilli (p. 11). “Congress’ taxing power provides an independent ground to uphold the minimum coverage provision…The only consequences of a failure to maintain minimum coverage are tax consequences” (p. 20). “The minimum coverage provision operates as a tax law” (p. 52). “It is fully integrated into the tax system, will raise substantial revenue, and triggers only tax consequences for non-compliance.”

P. 53: “The Act imposes reporting requirements on health insurance providers that will assist the IRS in identifying non-compliant taxpayers…the IRS may employe offsets against federal tax refunds…In short, the minimum coverage provision will plainly be ‘productive of some revenue’ and thussatisfies a key attribute of taxation…The minimum coverage provision is valid not only as a tax in its own right, but also as an adjunct to the income tax.”

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