The Individual Mandate Upheld as a Tax

Posted by Trevor Burrus

Today, the Supreme Court upheld the Affordable Care Act in its entirety. The most controversial part of the act, the individual mandate, was upheld not as a naked command under the commerce power, but as a tax on those who choose not to purchase health insurance.
Upholding the individual mandate as a tax was the most politically safe path for the Supreme Court, and, unsurprisingly, it was Chief Justice Roberts who steered the Court toward that path. Nevertheless, just as a rose would still smell as sweet, a “tax” to coerce you into purchasing a product from a private business is still an unprecedented intrusion into the private lives of American citizens.

On the bright side, a majority of the Court agreed that upholding the individual mandate under the Commerce Clause would be an unprecedented stretching of the meaning of “commerce.” The Court broadly accepted the argument put forward in our brief (joined by Pacific Legal Foundation, the Competitive Enterprise Institute, 13 other organizations, and 333 state legislators) that neither the Commerce Clause or the Necessary and Proper Clause permits Congress to compel commerce into existence in order to regulate it. As Chief Justice Roberts wrote:

Just as the individual mandate cannot be sustained as a law regulating the substantial effects of the failure to purchase health insurance, neither can it be upheld as a “necessary and proper” component of the insurance reforms. The commerce power thus does not authorize the mandate.

The Commerce Clause returns to where it was in 2009, which is still wildly distorted from where it should be. The taxing power, already quite broad, gets even broader. Going forward, we’ll have to see how much Congress is willing to use this newfound taxing power. If there is one thing the federal government knows how to do well, it’s tax.