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HISTORICAL QUOTE OF THE WEEK - "Always bear in mind that your own resolution to succeed is more important than any other." ABRAHAM LINCOLN

Thursday, June 28, 2012

OBAMACARE MANDATE A TAX - DID SCOTUS PUNT?

The Supreme Court decision on the fate of Obamacare was delivered today and most are saying it is a victory for Barack Obama but in reading the Courts decision it may not be as cut and dried as it seems. The High Court did determine that the mandate is unconstitutional as part of the Commerce Clause which gives Congress the authority to regulate interstate commerce or goods.

In the courts opinion as written by Chief Justice Roberts in a 5-4 decision with Roberts joining the left side of the court, it was determined that it could exist as a tax.  While on the surface this seems as if the mandate remains when reading the opinion it is extremely hazy as to whether the court is issuing the mandate as a tax or just punting it back to Congress for legislators to rewrite it. According to the courts opinion for the mandate to exist as a tax it must meet all requirements as a tax. In Section 4 paragraph C of the decision it states the following, "Even if the mandate may reasonably be characterized as a tax, it must still comply with the Direct Tax Clause, which provides: No Capitation, or other direct, Tax shall be laid, unless in Proportion  to the Census or Enumeration herein before directed to be taken.”


If I understand this as it is described from a Constitutional stand point, first, Congress alone has the authority to levy any tax therefore Congress must apportion this as a tax in order to collect it as a tax. As such it must meet all the requirements of a tax and Congress must in turn write the bill as a tax in order for it to BE a tax. The court cannot levy it specifically as a tax and it must now as I see it be returned to Congress for the express purpose of it being posed as a tax.

So the court punted and it now falls to Congress to levy it as a tax and the current make of of the House will not permit that so as I see it this is not the, "victory," for Obama that everyone is claiming but rather a move by the court to send it back to Congress and call it what it is, a tax which will rally the American people against it and the Congress not to apply it.

The decision goes on to say that as a tax it cannot be considered a penalty if insurance is not purchased by any individual. Section 4 paragraph B states, " And Congress’s choice of language—
stating that individuals “shall” obtain insurance or pay a “penalty”—
does not require reading §5000A as punishing unlawful conduct. "   Or in other words if insurance is not purchased since the mandate would be a tax no one can be penalized or punished for failure to purchase insurance.


This is far from over and I am sure further analysis will be coming forth as the days and weeks pass. But at least for now as I see it this law MUST go back to Congress to be levied as a tax and the House now has the Constitutional ability to prevent the levy of the Obamacare tax.

Ken Taylor

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