With respect to upholding Obamacare, today’s Cuccinelli Compass from Attorney General Ken Cuccinelli recommends an analysis that dissects Justice Roberts reasoning point-by point.

Justice Roberts’ Tax Ruling: An Analysis

July 10, 2012

Dear Friends and Fellow Virginians,

I wanted to pass along an excellent analysis dissecting Justice Roberts’ tax ruling in the healthcare case (see below!).  While I don’t generally pass along analysis from others in The Compass, Quin Hillyer did an outstanding and thorough job on this – and I don’t think I could have improved on it.

I’ve been focusing on the tax issue because it’s the one that prevailed, but I will get to talking about the ruling as it relates to the Commerce Clause, Necessary & Proper Clause, and the Spending Power soon.  Especially the Spending Power, because that part of the ruling has left Virginia with a meaningful choice about whether or not to join the expansion of Medicaid under ObamaCare.

Talk to you soon!

Ken Cuccinelli, II
Attorney General of Virginia

John Roberts’ Travesty, Point by Point
By Quin Hillyer
Wednesday, July 4, 2012
Published through the Center for Individual Freedom

There is a good reason why not even most liberal commentators are applauding the actual legal reasoning Chief Justice John Roberts used to avoid striking down the ObamaCare law: The “reasoning” is thinner than unleavened bread, and crumbles to dust not just upon gentle handling, but merely under the weight of a piercing gaze.

Let us count the inanities, inconsistencies and constitutional/statutory infirmities of the key section of Roberts’ decision, which ruled that the ObamaCare mandate-and-penalty is a “tax,” and a constitutionally permissible tax at that.

First, much has been made of Roberts’ assertion that something that is not a tax for purposes of something called the Anti-Injunction Act (AIA) actually is a tax for constitutional purposes. In truth, this is the least indefensible of Roberts’ intellectual apostasies. It is possible, as he demonstrated from precedent, to have two different standards for when something qualifies as a “tax.” The problem is not with the theoretical (if exceedingly rare) concept of two different legal standards, but with Roberts’ tendentious application of it.

The very example he uses to prove his point that two standards can apply actually argues against calling it a “tax” in this particular case. Roberts cited the Drexel Furniture case from 1922 – but, to quote from that case, “[T]here comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment. Such is the case in the law before us…. Congress does achieve the [effect of a penalty rather than a tax] by adopting the criteria of wrongdoing and imposing its principal consequence on those who transgress its standard.”

Obviously, that is exactly what happens in ObamaCare as well.

Second, although Roberts went on to discuss other aspects of the Drexel Furniture case, one of which was something called a scienter requirement (meaning a conscious or knowing violation), he then blithely distinguished ObamaCare from it by saying the health-care law has no explicitly expressed scienter requirement. This is nonsense – because in short order, he explained another reason the mandate does not carry a “penalty” is specifically because it allows citizens a conscious choice to ignore the mandate (and pay the government fee instead). So which is it, a conscious violation or not? He can’t have it both ways. Scienter existing de facto is still scienter, whether or not it is explicitly named.

Third, Roberts says the penalty can be deemed a tax largely because the Internal Revenue Service – a tax-collecting agency – collects it. In Drexel, he explained, the fact that part of the enforcement came from the Department of Labor – a non-tax-collecting agency – made it therefore not a tax. Oh, really? In that case, why isn’t it significant, as the four conservative dissenters note, that “the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found—in Title IX, containing the Act’s ‘Revenue Provisions.’?”

If Roberts cares so much about where a function is located, then why doesn’t he care that the law itself locates the mandate in a Title not dedicated to revenues? After all, in another section, Roberts himself says that “the essential feature of any tax” is that it “produces at least some revenue for the government.” This mandate, however, is meant to discourage revenue, because it is designed to impel everybody to buy health insurance and thus avoid paying any penalty at all.

(For that matter, why isn’t it significant that ObamaCare’s mandate, like the Drexel penalty, is partially enforced by an agency other than the IRS? The Obama administration’s own high court brief notes that the IRS and the Department of Health and Human Services are “the two agencies to which Congress assigned authority to administer” the mandate.)

Fourth, Roberts makes the extraordinary claim that “Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS” – and that the IRS is forbidden from using criminal prosecution to penalize those who refuse the mandate. The problem here is that the IRS can withhold income tax refunds from those who refuse to pay the penalty, and it can choose to apply ordinary income taxes to the penalty first, before crediting the citizen with having paid his due income taxes – and then the IRS can impose a penalty for failing to pay those taxes, and then prosecute or garnish wages for failing to pay that penalty.

In effect, just as funds are “fungible,” so too are the enforcement mechanisms of the IRS fungible so that, in the long run, there are indeed some hugely “negative legal consequences to not buying health insurance.”

Fifth, Roberts posits a hypothetical situation involving the government requiring “that every taxpayer who owns a house without energy efficient windows must pay $50 to the IRS…. No one would doubt that this law imposed a tax, and was within Congress’s power to tax.” But that’s not true at all. I know lots of people who would say this is a penalty, not a tax, and that it was wholly outside of Congress’ powers. (More on Congress’ powers in a moment.) Think about it: Have you, dear reader, ever in your life been assessed a tax specifically because of something you did not do? Of course not.

Sixth, Roberts discusses the constitutionality of such a “tax” by rejecting the plaintiffs’ complaints that the penalty would amount to an unconstitutional “direct tax” (if it were a tax at all) – but Roberts himself never takes the next step of identifying which sort of tax it actually is, if not a “direct” one. Nor does he bother explaining how it can be constitutional if it is another form of taxation. This is all rather abstruse, but the Wall Street Journal absolutely blew away Roberts’ failure to identify what sort of tax it is, and his apparent belief that Congress’ taxing power is infinitely elastic.

Seventh – and this is a real howler – Roberts makes this absurd assertion: “First, and most importantly, it is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity.  A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution.” This misses the point entirely. A capitation tax is one of the “direct taxes” discussed above, and is assessed equally per person. It is the person, not the inactivity that is being taxed.

What is at issue with ObamaCare is not that individuals are trying to avoid taxation via inactivity, but that the government is “taxing” – actually, “penalizing” – only the inactivity. People avoiding the mandate aren’t avoiding a tax through inactivity, they are avoiding a purchase of a private service (insurance) they do not desire to have. Government has never “taxed” the decision to remain inactive in any sphere, at any time.

Eighth, as I have argued elsewhere, Roberts makes the dreadful mistake of wildly conflating tax breaks or incentives on ownership or activity with a new tax on inactivity (as if the two – a tax on the one hand, and a tax exemption on the other – are among the same species and breed of beast). He seems to think that just because Congress can offer a tax “incentive,” such as a new home-owner’s exemption from property taxes, this is in the same ballpark as taxing the refusal to buy a product. That’s crazy. The property tax is generally applicable, and already in existence before the tax break. But there’s no generally applicable “health insurance tax” from which purchasers of insurance are exempt.

(In that light, let’s go back to energy-efficient windows. In congressional testimony in March of this year, Carrie Severino, Chief Counsel and Policy Director of the Judicial Crisis Network, said this: “Historically Congress has induced purchases through tax incentives or by conditioning other government benefits on purchases. If the government’s position is correct in this case, these workarounds were clumsy and inefficient solutions to a problem Congress could have more easily solved by directly compelling purchases…. Instead of offering incentives like Cash for Clunkers or tax credits for energy-efficient home improvements, Congress could have required individuals owning non-energy-efficient vehicles or homes to exchange or upgrade them. If the government truly had this simple and direct way of achieving its goals, it would have exercised it long ago, and for emergencies far more pressing than health care reform.”)

Ninth, Roberts skates over what should be an absolute requirement to determine if the fee for non-purchase is intended to penalize a desired lack of behavior – which would make it invalid as a tax – by writing that “More often and more recently we have declined to closely examine the regulatory motive or effect of revenue-raising measures.” That doesn’t, of course, excuse him from examining the regulatory intent at all – and, as is almost incontrovertible, the mandate’s penalty was intended by Congress far from primarily as a revenue measure, but rather as a way to compel behavior. Such an intention makes the penalty anything but a tax, and anything but an allowable use of Congress’ enumerated powers.


All of which is to say that Roberts has conjured up an unskilled magician’s attempt at multiple sleights of hand. As has been well discussed elsewhere, Roberts himself has acknowledged that accepting the penalty as a tax is hardly the “most straightforward” or “most natural” reading of the law. Nonetheless, he explains (citing precedent), “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” But here, again, he stretches precedent completely out of all reasonable context.

The maxim to choose an interpretation of a law that would accept the law as constitutional, over an alternative interpretation that doesn’t, is meant to apply in cases where the two interpretations are equally or near-equally reasonable. Here, though, as we have seen, Roberts had to strain and stretch and twist and skate and float and use misdirection in order to somehow, some way, pretend to impose a plausible interpretation on an assertion that is not even in the same logical solar system as interpretations that are “straightforward” and “natural.”

If Congress wanted to create a taxing system to fund ObamaCare or to incentivize insurance purchases, it could have done so. This isn’t just a matter of changing labels; it would have required a significantly different scheme. As the conservative dissenters noted, “We have no doubt that Congress knew precisely what it was doing when it rejected an earlier version of this legislation that imposed a tax instead of a requirement-with-penalty…. Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry.”

John Roberts didn’t defer to Congress in the ObamaCare case; he just re-wrote the law (on the mandate and on Medicaid) by himself in order to save Congress’ handiwork from its own infirmities. This isn’t judicial minimalism; it’s judicial meddling. It is both unsightly and unseemly. And it probably did lasting damage to the Constitution, the court itself, and to the free society both Constitution and court are meant to safeguard.

By recommending this article, I think Cuccinelli is tacitly conceding that that court decision had very little in the way of a silver lining.


  1. genomega1 – The ABA is a branch of the Democratic Party. Lawsuits are okay with that bunch. If we were talking about a government with any respect the law, I would agree the administration would have a problem exempting the unions and other supporters. However, they have already done it, and I doubt they will stop.

    What Democrats are doing is substituting legalism for respect for the law. Instead of adhering to both the letter and the spirit of the Law, they honor only the letter of the Law. In time they warp the letter of the Law beyond recognition.

  2. Going to press this. Great post. Some argue that Roberts did this so as to creat a voter backlash in November… Hmm; poor excuse being better than none? Roberts did what was convenient, not what was right.

    1. The difference between a penalty and a tax is no small thing. Before government and penalize you, government has to prove you guilty of something. Before you can complain about a tax, you have to pay it.

      1. “you have to pay it” but once you pay it then you can sue and there will be many lawsuits. If it had been approved under the icc clause then it would have been set in stone. As a tax they have many problems number one being all of the waivers they have passed out to their supporters. You can’t exempt union members from paying a tax that every other worker has to pay.

  3. I’m glad Cuccinelli didn’t fall for the George Will/Charles Krauthammer “Roberts Is A Federalist Ninja Master” reasoning. It means at least some people in places of power understand the magnitude of the Chief Justice’s calamitous ruling.

    1. I think Cuccinelli earnestly tries to do the right thing which is about the best that can be said of anyone.

      The power to tax is the power to destroy. If there are no longer any limits on the Federal Government’s power to tax, that is extremely bad news.

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