By RICHARD A. EPSTEIN
THE stunner yesterday was that Chief Justice John G. Roberts Jr., joined by the Supreme Court’s four most liberal justices, wrote the majority opinion that upheld the individual mandate in President Obama’s signature Affordable Care Act, which requires Americans to obtain health insurance
or pay a penalty. In an ironic twist, the chief justice simultaneously
accepted the conservative argument that Congress’s power to regulate
interstate commerce did not include the power to regulate economic
inactivity, like a decision not to purchase health care. The court ruled
5 to 4 on that point, with the chief justice joined by the court’s four
other conservative justices.
Connect With Us on Twitter
For Op-Ed, follow @nytopinion and to hear from the editorial page
editor, Andrew Rosenthal, follow @andyrNYT.
But what Chief Justice Roberts took from Congress with one hand, he gave
it with the other: a broad reading of the taxing power. In the majority
opinion, he wrote that since paying a penalty for not obtaining
insurance could be seen as a tax, and since “the Constitution permits
such a tax, it is not our role to forbid it, or to pass upon its wisdom
or fairness.” He will no doubt attract praise in some quarters for
splitting this baby.
But his decision is wrong. As a matter of constitutional text, legal
history and logic, the power to regulate commerce and the power to tax
should not be separated. It is not good for the court or the country
that the chief justice’s position in such an important case is confused
at its core.
Consider first the constitutional text. Chief Justice Roberts refers to
Congress’s power to “lay and collect Taxes.” But it’s worth recalling
the surrounding language, which notes that Congress has the power to
“lay and collect Taxes” only in order “to pay the Debts and provide for
the common Defence and general Welfare of the United States.”
Historically speaking, this clause corrected one of the great weaknesses
of the Articles of Confederation (the precursor to the Constitution),
which had forced Congress to essentially beg the states for the revenues
needed to run its business. By giving Congress independent powers over
taxation and other revenue sources, the Constitution ended that
dependency. But as a quid pro quo, the Constitution also restricted the
use of these revenues to classical public goods — benefits that must be
given to all citizens, if given to any — like paying off national debts
and paying for the nation’s defense. General welfare, mentioned in
parallel with these two phrases, is best read as covering only matters
that advance the welfare of the United States as a whole. The redistribution of income, or “transfer payments” among citizens, like those mandated under the Affordable Care Act, doesn’t qualify for taxation in this originalist reading of the Constitution.
Through the early 20th century, the Supreme Court was cognizant of this
tight relationship between the power to regulate an activity directly
and to the power to tax it. The basic idea relies on a simple economic
insight: taxation and regulation are close substitutes, so a limitation
on one power matters little if the other power is still available. There
is no practical difference between ordering an action, and taxing or
fining people who don’t do that same thing. If the Constitution limits
direct federal powers, it must also limit Congress’s indirect power of
taxation.
In his opinion, Chief Justice Roberts didn’t come to grips with the two
critical early Supreme Court cases that set out the relationship between
the powers of regulation and taxation — a relationship that survived
the New Deal revolution in understanding the Commerce Clause. In the
Child Labor Tax case of 1922, the Supreme Court refused to uphold a tax
equal to 10 percent of the net profits of any firm that shipped goods
into interstate commerce if the firm used child labor
anywhere in its plants. Chief Justice William Howard Taft noted that
the court’s earlier decision in Hammer v. Dagenhart (1918) forbade
Congress to use its commerce power to prohibit outright the shipment of
ordinary goods across state lines because they were made in factories
that used child labor. A heavy tax, the court argued, could not be used
to mount an end run around this constitutional obstacle to its own
power.
The same point was reinforced in 1936 in United States v. Butler, which
struck down a tax on agricultural commodities because it sought to
achieve the then unconstitutional regulatory aim of reducing the total
acreage in agricultural production. After the 1942 case Wickard v.
Filburn, when the Commerce Clause was held to permit such regulation,
the tax became just as permissible as direct regulation. Wickard
expanded the scope of federal power, but it did nothing to upset the
constitutional parity between the taxing and commerce powers.
Chief Justice Roberts has ignored this fundamental principle: If direct
regulation is beyond the scope of the Commerce Clause (as he held), then
taxation as an indirect route to the same regulation should be off
limits as well (as he failed to hold). This is a baby that should not be
split. His attempt to do so undermines his ruling, the court and the
Constitution.
No comments:
Post a Comment