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In reply to the discussion: Can the President still say that the mandate is not a "tax"?? [View all]markpkessinger
(8,517 posts)107. The Solicitor made two parallel arguments . . .
The Solicitor argued both that it was a tax AND that even if it were not a tax, it would nevertheless be authorized under Congress' taxing authority. And btw, what "allowed" Justice Roberts to find the law constitutional was the Supreme Court's power of judicial review. Supreme Court justices, when considering issues of Constitutionality, are not bound by the arguments made by the parties.
From the transcript of oral arguments (p.44 ff., emphasis added)
JUSTICE SOTOMAYOR: General, could you turn to the tax clause?
GENERAL VERRILLI: Yes.
JUSTICE SOTOMAYOR: I have to look for a case that involves the issue of whether something denominated by Congress as a penalty was nevertheless treated as a tax, except in those situations where the code itself or the statute itself said treat the penalty as a tax. Do you know of any case where we've done that?
GENERAL VERRILLI: Well, I think I would point the Court to the License Tax Case, where it was -was denominated a fee and nontax, and the Court upheld it as an exercise of the taxing power, in a situation in which the structure of the law was very much the structure of this law, in that there was a separate stand-alone provision that set the predicate and then a separate provision in closing -
JUSTICE SCALIA: But fees, you know, license fees, fees for a hunting license, everybody knows those are taxes. I mean, I don't think there is as much of a difference between a fee and a tax as there is between a penalty and a tax.
GENERAL VERRILLI: And that, and -- and I think in terms of the tax part, I think it's useful to separate this into two questions. One is a question of characterization. Can this be characterized as a tax; and second, is it a constitutional exercise of the power?
With respect to the question of characterization, the -- this is -- in the Internal Revenue Code, it is administered by the IRS, it is paid on your Form 1040 on April 15th, I think -
JUSTICE GINSBURG: But yesterday you told me -- you listed a number of penalties that are enforced through the tax code that are not taxes and they are not penalties related to taxes.
GENERAL VERRILLI: They may still be exercise of the tax -- exercises of the taxing power, Justice Ginsburg, as -- as this is, and I think there isn't a case in which the Court has, to my mind, suggested anything that bears this many indicia of a tax can't be considered as an exercise of the taxing power. In fact, it seems to me the License Tax Cases point you in the opposite direction. And beyond that your -the -- it seems to me the right way to think about this question is whether it is capable of being understood as an exercise of the tax.
JUSTICE SCALIA: The President said it wasn't a tax, didn't he?
GENERAL VERRILLI: Well, Justice Scalia, what the -- two things about that, first, as it seems to me, what matters is what power Congress was exercising. And they were -- and I think it's clear that -- that the -- the -- they were exercising the tax power as well as -
JUSTICE SCALIA: You're making two arguments. Number one, it's a tax; and number two, even if it isn't a tax, it's within the taxing power. I'm just addressing the first.
GENERAL VERRILLI: If the President said -
JUSTICE MSCALIA: Is it a tax or not a tax? The President didn't think it was.
GENERAL VERRILLI: The President said it wasn't a tax increase because it ought to be understood as an incentive to get people to have insurance. I don't think it's fair to infer from that anything about whether that is an exercise of the tax power or not.
JUSTICE GINSBURG: A tax is to raise revenue, tax is a revenue-raising device, and the purpose of this exaction is to get people into the health care risk -- risk pool before they need medical care, and so it will be successful. If it doesn't raise any revenue, if it gets people to buy the insurance, that's -- that's what this penalty is -- this penalty is designed to affect conduct.
The conduct is buy health protection, buy health insurance before you have a need for medical care. That's what the penalty is designed to do, not to raise revenue.
GENERAL VERRILLI: That -- that is true, Justice Ginsburg. This is also true of the marijuana tax that was withheld in Sanchez. That's commonly true of penalties under the Code. They do -- if they raise revenue, they are exercises of the taxing power, but their purpose is not to raise revenue. Their purpose is to discourage behavior. I mean, the -- the mortgage deduction works that way. When the mortgage deduction is -- it's clearly an exercise of the taxing power. When it's successful it raises less revenue for the Federal Government. It's still an exercise of the taxing power. So, I don't -
JUSTICE KAGAN: I suppose, though, General, one question is whether the determined efforts of Congress not to refer to this as a tax make a difference. I mean, you're suggesting we should just look to the practical operation. We shouldn't look at labels. And that seems right, except that here we have a case in which Congress determinedly said this is not a tax, and the question is why should that be irrelevant?
GENERAL VERRILLI: I don't think that that's a fair characterization of the actions of Congress here, Justice Kagan. On the -- December 23rd, a point of constitutional order was called to, in fact, with respect to this law. The floor sponsor, Senator Baucus, defended it as an exercise of the taxing power. In his response to the point of order, the Senate voted 60 to39 on that proposition.
The legislative history is replete with members of Congress explaining that this law is constitutional as an exercise of the taxing power. It was attacked as a tax by its opponents. So I don't think this is a situation where you can say that Congress was avoiding any mention of the tax power. It would be one thing if Congress explicitly disavowed an exercise of the tax power. But given that it hasn't done so, it seems to me that it's -- not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.
CHIEF JUSTICE ROBERTS: Why didn't Congress call it a tax, then?
GENERAL VERRILLI: Well -
CHIEF JUSTICE ROBERTS: You're telling me they thought of it as a tax, they defended it on the tax power. Why didn't they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objective. But it is -- in the Internal Revenue Code it is collected by the IRS on April 15th. I don't think this is a situation in which you can say -
CHIEF JUSTICE ROBERTS: Well, that's the reason. They thought it might be more effective if they called it a penalty.
GENERAL VERRILLI: Yes.
JUSTICE SOTOMAYOR: I have to look for a case that involves the issue of whether something denominated by Congress as a penalty was nevertheless treated as a tax, except in those situations where the code itself or the statute itself said treat the penalty as a tax. Do you know of any case where we've done that?
GENERAL VERRILLI: Well, I think I would point the Court to the License Tax Case, where it was -was denominated a fee and nontax, and the Court upheld it as an exercise of the taxing power, in a situation in which the structure of the law was very much the structure of this law, in that there was a separate stand-alone provision that set the predicate and then a separate provision in closing -
JUSTICE SCALIA: But fees, you know, license fees, fees for a hunting license, everybody knows those are taxes. I mean, I don't think there is as much of a difference between a fee and a tax as there is between a penalty and a tax.
GENERAL VERRILLI: And that, and -- and I think in terms of the tax part, I think it's useful to separate this into two questions. One is a question of characterization. Can this be characterized as a tax; and second, is it a constitutional exercise of the power?
With respect to the question of characterization, the -- this is -- in the Internal Revenue Code, it is administered by the IRS, it is paid on your Form 1040 on April 15th, I think -
JUSTICE GINSBURG: But yesterday you told me -- you listed a number of penalties that are enforced through the tax code that are not taxes and they are not penalties related to taxes.
GENERAL VERRILLI: They may still be exercise of the tax -- exercises of the taxing power, Justice Ginsburg, as -- as this is, and I think there isn't a case in which the Court has, to my mind, suggested anything that bears this many indicia of a tax can't be considered as an exercise of the taxing power. In fact, it seems to me the License Tax Cases point you in the opposite direction. And beyond that your -the -- it seems to me the right way to think about this question is whether it is capable of being understood as an exercise of the tax.
JUSTICE SCALIA: The President said it wasn't a tax, didn't he?
GENERAL VERRILLI: Well, Justice Scalia, what the -- two things about that, first, as it seems to me, what matters is what power Congress was exercising. And they were -- and I think it's clear that -- that the -- the -- they were exercising the tax power as well as -
JUSTICE SCALIA: You're making two arguments. Number one, it's a tax; and number two, even if it isn't a tax, it's within the taxing power. I'm just addressing the first.
GENERAL VERRILLI: If the President said -
JUSTICE MSCALIA: Is it a tax or not a tax? The President didn't think it was.
GENERAL VERRILLI: The President said it wasn't a tax increase because it ought to be understood as an incentive to get people to have insurance. I don't think it's fair to infer from that anything about whether that is an exercise of the tax power or not.
JUSTICE GINSBURG: A tax is to raise revenue, tax is a revenue-raising device, and the purpose of this exaction is to get people into the health care risk -- risk pool before they need medical care, and so it will be successful. If it doesn't raise any revenue, if it gets people to buy the insurance, that's -- that's what this penalty is -- this penalty is designed to affect conduct.
The conduct is buy health protection, buy health insurance before you have a need for medical care. That's what the penalty is designed to do, not to raise revenue.
GENERAL VERRILLI: That -- that is true, Justice Ginsburg. This is also true of the marijuana tax that was withheld in Sanchez. That's commonly true of penalties under the Code. They do -- if they raise revenue, they are exercises of the taxing power, but their purpose is not to raise revenue. Their purpose is to discourage behavior. I mean, the -- the mortgage deduction works that way. When the mortgage deduction is -- it's clearly an exercise of the taxing power. When it's successful it raises less revenue for the Federal Government. It's still an exercise of the taxing power. So, I don't -
JUSTICE KAGAN: I suppose, though, General, one question is whether the determined efforts of Congress not to refer to this as a tax make a difference. I mean, you're suggesting we should just look to the practical operation. We shouldn't look at labels. And that seems right, except that here we have a case in which Congress determinedly said this is not a tax, and the question is why should that be irrelevant?
GENERAL VERRILLI: I don't think that that's a fair characterization of the actions of Congress here, Justice Kagan. On the -- December 23rd, a point of constitutional order was called to, in fact, with respect to this law. The floor sponsor, Senator Baucus, defended it as an exercise of the taxing power. In his response to the point of order, the Senate voted 60 to39 on that proposition.
The legislative history is replete with members of Congress explaining that this law is constitutional as an exercise of the taxing power. It was attacked as a tax by its opponents. So I don't think this is a situation where you can say that Congress was avoiding any mention of the tax power. It would be one thing if Congress explicitly disavowed an exercise of the tax power. But given that it hasn't done so, it seems to me that it's -- not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.
CHIEF JUSTICE ROBERTS: Why didn't Congress call it a tax, then?
GENERAL VERRILLI: Well -
CHIEF JUSTICE ROBERTS: You're telling me they thought of it as a tax, they defended it on the tax power. Why didn't they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objective. But it is -- in the Internal Revenue Code it is collected by the IRS on April 15th. I don't think this is a situation in which you can say -
CHIEF JUSTICE ROBERTS: Well, that's the reason. They thought it might be more effective if they called it a penalty.
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I think that calling it a "Pyrrhic" victory means that it may have a negative effect
razorman
Jul 2012
#25
You have a point. Of course, both sides will try to "spin" to their best advantage.
razorman
Jul 2012
#134
"Its positive attributes can be touted." - in today's "liberally-biased media"???
zbdent
Jul 2012
#34
If I don't get health insurance and pay the tax what do I get? You just stated:
kelly1mm
Jul 2012
#39
No, I don't get a health insurance policy by paying the tax. By definition you only pay the tax if
kelly1mm
Jul 2012
#74
The President won the battle for legislation he tacked his presidency on, but Roberts gave...
Poll_Blind
Jul 2012
#5
Some legal scholars suggest Roberts produced an essentially conservative opinion with a...
Poll_Blind
Jul 2012
#17
It is a penalty affecting a small number of people who could afford to buy health insurance but
Skidmore
Jul 2012
#10
The Mandate isn't a tax. The Penalty is. If you follow the law, you incur no tax.
MjolnirTime
Jul 2012
#13
Again, while five Justices said it was constitutional, only one said it was a tax.
Nye Bevan
Jul 2012
#37
"A rose by any other name would smell as sweet." A tax by any other name would smell as...
Tierra_y_Libertad
Jul 2012
#31
I think Dems best response is - "Huge tax increase"? Fearmongering hyperbole. Check the facts...
pinto
Jul 2012
#35
You are a brave person; your op is spot on (if it looks like a tax, quacks like a tax, and walks
sad sally
Jul 2012
#70
It's regressive in that a .001% upper income will pay the same as a 10% upper income..
Fumesucker
Jul 2012
#77
A sovereign currency government does not need to increase taxes to spend.
girl gone mad
Jul 2012
#100
But then, it would have failed and you would have something else to complain about.
kentuck
Jul 2012
#81
he says that IF they view it as a tax, they have an obligation to leave the law alone
bigtree
Jul 2012
#88
There's a difference between a tax, and a penalty imposed under the authority to tax
markpkessinger
Jul 2012
#91
What is at issue now is not what the Solicitor argued, but what the Court actually held n/t
markpkessinger
Jul 2012
#97
In other words, would it have been better to have the entire bill declared unconstitutional?
kentuck
Jul 2012
#101
I don't understand by people want to echo the current RW talk radio rant about "new taxes"...
NYC_SKP
Jul 2012
#133
Hey, why don't you just take it up with Nancy Pelosi, who used the term last week?
NYC_SKP
Jul 2012
#132