Opinion: Tax issue could sink Obamacare

May 5, 2014


— If the president wants to witness a refutation of his assertion that the survival of the Affordable Care Act is assured, come Thursday he should stroll the 13 blocks from his office to the nation’s second-most important court, the D.C. Circuit Court of Appeals. There he can hear an argument involving yet another constitutional provision that evidently has escaped his notice. It is the Origination Clause, which says: “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills.”

The ACA passed the Senate on a party-line vote, and without a Democratic vote to spare, after a series of unsavory transactions that purchased the assent of several shrewdly extortionate Democrats. What will be argued on Thursday is that what was voted on — the ACA — was indisputably a revenue measure and unquestionably did not originate in the House, which later passed the ACA on another party-line vote.

This case comes from Matt Sissel, an Iowa artist and small-business owner who is represented by the Pacific Legal Foundation, which litigates for limited government. Sissel neither has nor wants health insurance, preferring to invest his limited resources in his business. Hence he objects to the ACA’s mandate that requires him to purchase it or pay the penalty that the ACA daintily calls the “shared responsibility payment.”

In June 2012, a Supreme Court majority accepted a, shall we say, creative reading of the ACA by Chief Justice John Roberts. The court held that the penalty, which the ACA repeatedly calls a penalty, is really just a tax on the activity — actually, the nonactivity — of not purchasing insurance. The individual mandate is not, the court held, a command but merely the definition of a condition that can be taxed. The tax is mild enough to be semi-voluntary; individuals are free to choose whether or not to commit the inactivity that triggers the tax.

The “exaction” — Roberts’ word — “looks,” he laconically said, “like a tax in many respects.” It is collected by the IRS, and the proceeds go to the Treasury for the general operations of the federal government, not to fund a particular program. This surely makes the ACA a revenue measure.

Did it, however, originate in the House? Of course not. 

In October 2009, the House passed a bill that would have modified a tax credit for members of the armed forces and some other federal employees who were first-time home buyers — a bill that had nothing to do with health care. Two months later the Senate “amended” this bill by obliterating it. The Senate renamed it and completely erased its contents, replacing them with the ACA’s contents.

Case law establishes that for a Senate action to qualify as a genuine “amendment” to a House-passed revenue bill, it must be “germane to the subject matter of the (House) bill.” The Senate’s shell game — gutting and replacing the House bill — created the ACA from scratch. The ACA obviously flunks the germane-ness test, without which the House’s constitutional power of originating revenue bills would be nullified.  

Case law establishes that the Origination Clause does not apply to two kinds of bills. One creates “a particular governmental program and ... raises revenue to support only that program.” The second creates taxes that are “analogous to fines” in that they are designed to enforce compliance with a statute passed under one of the Constitution’s enumerated powers of Congress other than the taxing power. The ACA’s tax, which the Supreme Court repeatedly said is not an enforcement penalty, and hence is not analogous to a fine, fits neither exception to the Origination Clause.

The ACA’s defenders say its tax is somehow not quite a tax because it is not primarily for raising revenue but for encouraging certain behavior (buying insurance). But the Origination Clause, a judicially enforceable limit on the taxing power, would be effectively erased from the Constitution if any tax with any regulatory — behavior-changing — purpose or effect were exempt from the clause.

The Court of Appeals sits six blocks from the Senate, which committed the legislative legerdemain of pretending to merely amend a House bill while actually originating a new one. Across the street from the Senate sits the Supreme Court, where this case may be headed.

Two years ago, the Supreme Court saved the ACA by declaring its penalty to be a tax. It thereby doomed the ACA as an unconstitutional violation of the Origination Clause.   

— George Will is a columnist for Washington Post Writers Group.


Larry Sturm 3 years, 8 months ago

If they sink the ACA what are they going to do with the millions that are already paying insurance?

Greg Cooper 3 years, 8 months ago

Hey, George, Obama is not running, nor eligible, for re-election, and, thus, can not be "sunk".

If you have something to say that does not imply that, then say it. Your "republican " party needs to run on positive issues rather than keep trying to reiterate tired, clichéd talking points. Perhaps you could do a column on that.

Scott Burkhart 3 years, 8 months ago

Sink "Obamacare" not Obama. Do you misread everything? It explains the obtuse replies and formulation of your opinions.

Greg Cooper 3 years, 8 months ago

OK, then, let's get technical. There is no Obamacare. Try the Affordable Care Act.

But you don't make any distinction between the two, do you, Scott. Anything linked to Obama is bad, and should be eliminated along with Obama. I know what the headline said, and I know how your sect of politically recalcitrant people think.

You can find fault with my language (and you will and do) but you can not explain away your hatred of Obama and his policies and programs.

I don't know that you know this, but I am as patriotic and flag-waving as you and want the best for the entire country rather than the few who can afford it. My opinions may seem obtuse to you, but they are mine and have been formed by listening to both sides of any argument or discussion. But, then, you never liked flag-waving people, now, did you?

Julius Nolan 3 years, 8 months ago

Saw George Will name attached, nothing else needed to know.

Scott Burkhart 3 years, 8 months ago

Saw Julius Nolan replied, nothing else needed to know. See, I can do it too.

Steve King 3 years, 8 months ago

Sheesh. So my insurance gets cancelled?

3 years, 8 months ago

To bad getting sick costs an arm an a leg... Why is that anyway?...lol...

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