I have done some more research on the matter of the Supreme Court decision in National Federation of Independent Business v. Sebelius that ruled the individual mandate is a tax (I actually do not agree that is a tax as explained here). I wanted to look into that more closely because Article 1, Section 9 of the Constitution puts a limit on the Congressional power to tax:
No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
The 16th Amendment modified this limit:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
What these two together mean is that the only direct tax Congress may impose without apportionment is an income tax. It’s quite convenient that the Court has ruled that the income tax isn’t a direct tax anyway, so the extra words in the 16th Amendment are superfluous. Isn’t it nice of the Court to make it clean and say that the only direct taxes that exist are on real property, heads, or personal property? And then when confronted with a capitation, a head tax, the Court completely misses the boat.
In National Federation of Independent Business v. Sebelius, the Supreme Court held that a penalty directly imposed upon individuals for failure to possess health insurance, though a tax for constitutional purposes is not a direct tax. The Court reasoned that the tax is not a capitation because not everyone will be required to pay it, nor is it a tax on property. Rather “it is triggered by specific circumstances.”
I hate to stick it to Justice John Roberts here (what the heck; he painted the bull’s-eye on himself), but being able to avoid a tax is not an appropriate test for being direct or indirect. Real estate taxes can be avoided by not owning real estate. Personal property taxes can be avoided by not owning the items being taxed. Both of these are considered direct taxes and they are entirely avoidable. But a capitation is not avoidable, and neither is being expropriated by ObamaCare.
The tax penalty that is imposed is a capitation because one is expropriated as a consequence of the law in one of two ways. Pay money to buy insurance or pay a penalty. Pay a health insurance company or pay the government. Either of these situations are taxes because it is compulsory; there is no way to avoid paying and it does not matter to whom we make out the check. Therefore, it is a capitation because you have to pay something to someone just as a consequence of being alive. It is not “triggered” by anything other than being born. The only real difference is that the amount and payee is different depending on the set of circumstances.
Now to appropriately implement ObamaCare as an exercise of the power to tax, everyone must pay the same price based on apportionment. If everyone must buy or pay a penalty, the price of the insurance and the amount of the penalty must be the same according to population. It cannot be regressive, progressive or subsidized based on income. Aww too bad – Mr. Obama has to hand out not so free health care to everyone, even rich guys for the same price or he can’t do it all.
And of course, that is only assuming that we intend to respect the ruling of the Court that ObamaCare is a tax. I will write more about this later. But for now, I think it’s important to think about what might be the course of action when Obama does implement this thing full-throttle in States that have refused to cooperate.
PS: We are living in interesting times