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Here is the link This was always the easiest way for the Court to uphold it. It also explains why Scalia has gone off the reservation.

Not just the mandate. The entire ACA is upheld except some limits are placed on the federal government's power to terminate states' Medicaid funds.

Here is the essence of the tax holding, which is exactly what the Administration argued,

The Government’s tax power argument asks us to view the statute differently than we did in considering its com- merce power theory. In making its Commerce Clause argument, the Government defended the mandate as a regulation requiring individuals to purchase health insurance. The Government does not claim that the taxing power allows Congress to issue such a command. Instead, the Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product.

The text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads “no vehicles in the park” might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. Justice Story said that 180 years ago: “No court ought, unless the terms of an act rendered it una- voidable, to give a construction to it which should involve a violation, however unintentional, of the constitution.” Parsons v. Bedford, 3 Pet. 433, 448–449 (1830). Justice Holmes made the same point a century later: “[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.” Blodgett v. Holden, 275 U. S. 142, 148 (1927) (concurring opinion).

The most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals “shall” maintain health insurance. 26 U. S. C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on that basis. But, for the reasons explained above, the Com- merce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether the Government’s alternative reading of the statute—that it only imposes a tax on those without insurance—is a reasonable one.

Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. See §5000A(b). That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.

The question is not whether that is the most natural interpretation of the mandate, but only whether it is a “fairly possible” one. Crowell v. Benson, 285 U. S. 22, 62 (1932). As we have explained, “every reasonable construc- tion must be resorted to, in order to save a statute from unconstitutionality.” Hooper v. California, 155 U. S. 648, 657 (1895). The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the Act the full measure of deference owed to federal statutes, it can be so read, for the reasons set forth below.
Cite as: 567 U. S. __ (2012) 33

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many re- spects. The “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “tax- payer[s]” when they file their tax returns. 26 U. S. C. §5000A(b). It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. §5000A(e)(2). For taxpayers who do owe the pay- ment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. §§5000A(b)(3), (c)(2), (c)(4). The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which—as we previously explained—must assess and collect it “in the same manner as taxes.” Supra, at 13–14. This process yields the essential feature of any tax: it produces at least some revenue for the Government. United States v. Kahriger, 345 U. S. 22, 28, n. 4 (1953). Indeed, the payment is expected to raise about $4 billion per year by 2017. Congressional Budget Office, Payments of Penalties for Being Uninsured Under the Patient Pro- tection and Affordable Care Act (Apr. 30, 2010), in Selected CBO Publications Related to Health Care Legislation, 2009–2010, p. 71 (rev. 2010).

It is of course true that the Act describes the payment as a “penalty,” not a “tax.” But while that label is fatal to the application of the Anti-Injunction Act, supra, at 12–13, it does not determine whether the payment may be viewed as an exercise of Congress’s taxing power. It is up to Con- gress whether to apply the Anti-Injunction Act to any particular statute, so it makes sense to be guided by Con- gress’s choice of label on that question. That choice does not, however, control whether an exaction is within Congress’s constitutional power to tax.

Our precedent reflects this: In 1922, we decided two challenges to the “Child Labor Tax” on the same day. In the first, we held that a suit to enjoin collection of the so- called tax was barred by the Anti-Injunction Act. George, 259 U. S., at 20. Congress knew that suits to obstruct taxes had to await payment under the Anti-Injunction Act; Congress called the child labor tax a tax; Congress therefore intended the Anti-Injunction Act to apply. In the second case, however, we held that the same exaction, although labeled a tax, was not in fact authorized by Con- gress’s taxing power. Drexel Furniture, 259 U. S., at 38. That constitutional question was not controlled by Con- gress’s choice of label.

We have similarly held that exactions not labeled taxes nonetheless were authorized by Congress’s power to tax. In the License Tax Cases, for example, we held that federal licenses to sell liquor and lottery tickets—for which the licensee had to pay a fee—could be sustained as exercises of the taxing power. 5 Wall., at 471. And in New York v. United States we upheld as a tax a “surcharge” on out-of- state nuclear waste shipments, a portion of which was paid to the Federal Treasury. 505 U. S., at 171. We thus ask whether the shared responsibility payment falls within Congress’s taxing power, “[d]isregarding the designa- tion of the exaction, and viewing its substance and appli- cation.” United States v. Constantine, 296 U. S. 287, 294 (1935); cf. Quill Corp. v. North Dakota, 504 U. S. 298, 310 (1992) (“[M]agic words or labels” should not “disable an otherwise constitutional levy” (internal quotation marks omitted)); Nelson v. Sears, Roebuck & Co., 312 U. S. 359, 363 (1941) (“In passing on the constitutionality of a tax law, we are concerned only with its practical operation, not its definition or the precise form of descriptive words which may be applied to it” (internal quotation marks omitted)); United States v. Sotelo, 436 U. S. 268, 275 (1978) (“That the funds due are referred to as a ‘penalty’
Cite as: 567 U. S. __ (2012) 35 . . . does not alter their essential character as taxes”).7

Our cases confirm this functional approach. For example, in Drexel Furniture, we focused on three practical characteristics of the so-called tax on employing child laborers that convinced us the “tax” was actually a pen- alty. First, the tax imposed an exceedingly heavy bur- den—10 percent of a company’s net income—on those who employed children, no matter how small their infraction. Second, it imposed that exaction only on those who know- ingly employed underage laborers. Such scienter require- ments are typical of punitive statutes, because Congress often wishes to punish only those who intentionally break the law. Third, this “tax” was enforced in part by the Department of Labor, an agency responsible for pun- ishing violations of labor laws, not collecting revenue. 259 U. S., at 36–37; see also, e.g., Kurth Ranch, 511 U. S., at 780–782 (considering, inter alia, the amount of the exac- tion, and the fact that it was imposed for violation of a separate criminal law); Constantine, supra, at 295 (same). The same analysis here suggests that the shared re- sponsibility payment may for constitutional purposes be considered a tax, not a penalty: First, for most Americans the amount due will be far less than the price of insur- ance, and, by statute, it can never be more.8 It may often

be a reasonable financial decision to make the payment rather than purchase insurance, unlike the “prohibitory” financial punishment in Drexel Furniture. 259 U. S., at 37. Second, the individual mandate contains no scienter requirement. Third, the payment is collected solely by the IRS through the normal means of taxation—except that the Service is not allowed to use those means most sugges- tive of a punitive sanction, such as criminal prosecution. See §5000A(g)(2). The reasons the Court in Drexel Furniture held that what was called a “tax” there was a penalty support the conclusion that what is called a “penalty” here may be viewed as a tax.9

None of this is to say that the payment is not intended to affect individual conduct. Although the payment will raise considerable revenue, it is plainly designed to ex- pand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of do- mestic industry. See W. Brownlee, Federal Taxation in America 22 (2d ed. 2004); cf. 2 J. Story, Commentaries on the Constitution of the United States §962, p. 434 (1833) (“the taxing power is often, very often, applied for other purposes, than revenue”). Today, federal and state taxes can compose more than half the retail price of cigarettes,


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Comment Preferences

  •  Tip Jar (0+ / 0-)

    Further, affiant sayeth not.

    by Gary Norton on Thu Jun 28, 2012 at 07:11:09 AM PDT

  •  So bizarre (1+ / 0-)
    Recommended by:

    Fox and CNN reporting unconstitutional. SCOTUSBlog saying opposite.

    Unapologetic Obama supporter.

    by Red Sox on Thu Jun 28, 2012 at 07:11:41 AM PDT

    •  Fox backtracked. Too interested in being.... (2+ / 0-)
      Recommended by:
      Red Sox, BachFan

      "FIRST" instead of getting it right.

    •  CNN (0+ / 0-)

      too stupid to understand what is going on.

      If I understand this right, I think this may be a good decision, sets good precedent going forward so that the commerce clause cant be used to push all types of products on us going forward, but still allows in this case to simply call the mandate a tax.

      I could be wrong I am far from a legal scholar, but at this moment it seems as if they might have gotten this right?  how can that be...

      Bad is never good until worse happens

      by dark daze on Thu Jun 28, 2012 at 07:15:13 AM PDT

      [ Parent ]

      •  I had flipped to CNN. (0+ / 0-)

        Talking head outside:  wait, our producer inside just called; not constitutional under commerce clause.  

        switch to wolf, meaningless words spew forth to fill air time.

        turned it off.

        figured i'd read about in half an hour, cause this was no better than someone looking out their window at the neigbors across the street:  what's going on over there?  there's one police car, no, now two.  wait!  someone's coming out of the house....

        Republicans: if they only had a heart.

        by leu2500 on Thu Jun 28, 2012 at 07:22:24 AM PDT

        [ Parent ]

    •  ACA valid under taxing powers, but not (0+ / 0-)

      under Commerce Clause or under the Necessary and Proper Clause.

      That may have caused the confusion.

      "Specialization is for insects." -- Heinlein

      by BachFan on Thu Jun 28, 2012 at 08:11:26 AM PDT

      [ Parent ]

  •  here come the special interests... (2+ / 0-)
    Recommended by:
    leu2500, native

    ... ready to deluge Congress to get their own "compulsory consumption clauses" for everything from mandatory 401Ks to the privatization of Medicare and Social Security.

    Meanwhile we get to work on SINGLE PAYER starting after the election.  

    "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

    by G2geek on Thu Jun 28, 2012 at 07:14:38 AM PDT

  •  That's what I've always said.Never should have (1+ / 0-)
    Recommended by:
    Gary Norton

    been challenged.

    It is not a mandate to buy a product.

    It's a tax. If you buy the product you don't pay the tax.

    It's exactly like every other deduction.

    Is there a mandate to buy a house rather than rent?

    Of course not.  But if you buy a house, you get a deduction for interest.

    This case was never close under the law.  It was ONLY a political case.

  •  So it's a tax? (1+ / 0-)
    Recommended by:
    Gary Norton

    Even though the Administrations says it isn't a tax? Weird.

  •  I am happy with the decision as I understand it so (1+ / 0-)
    Recommended by:
    Gary Norton

    far. I never thought the mandate was legal or Constitutional under the Commerce clause but I was always okay with it being a tax, which the Democrats and the Obama administration did everything in their power to deny that it was, and yet was the ONLY way ACA was legal or made any sense.  

    In a sense, the Dems and Obama got a victory in spite of themselves.

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Thu Jun 28, 2012 at 07:48:59 AM PDT

    •  Actually this is theAdministration's argument. (0+ / 0-)

      They said it was not a tax for purposes of the anti-injunction act, which the court agreed with, but is was a tax for purposes of Congressional power, which the court also agreed with.

      Further, affiant sayeth not.

      by Gary Norton on Thu Jun 28, 2012 at 08:12:56 AM PDT

      [ Parent ]

      •  At the time the bill was passed, the Dems bent (1+ / 0-)
        Recommended by:
        Gary Norton

        themselves into pretzels explaining why it was not a tax.
        This is easily Googled. They had to reverse themselves once it was challenged.

        I really don't care. Like I said, I'm glad it was rejected under the Commerce clause but ok'd under taxing authority.

        “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

        by Phoebe Loosinhouse on Thu Jun 28, 2012 at 09:02:26 AM PDT

        [ Parent ]

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