This artist rendering shows Solicitor General Donald B. Verrilli, Jr. speaking in front of the Supreme Court Justice in Washington, Monday, March 26, 2012, as the court began three days of arguments on the health care law signed by President Barack Obama. Justices seated, from left are, Antonin Scalia, Chief Justice John Roberts, Anthony Kennedy Ruth Bader Ginsburg, Samuel Alito and Elena Kagan.

Dana Verkouteren, Associated Press

Is health care mandate a tax?

  • Article by: D.J. TICE
  • Star Tribune
  • March 31, 2012 - 5:26 PM

Justice Scalia: You're saying that all the discussion we had earlier about how this is one big uniform scheme, and the Commerce Clause -- blah, blah, blah -- it really doesn't matter. This is a tax and the federal government could simply have said ... everybody who doesn't buy health insurance at a certain age will be taxed so much money. Right?...

Solicitor General Verrilli: It is justifiable under its tax power.

Scalia: Okay. Extraordinary.

• • •

The hallowed U.S. Supreme Court chambers have echoed with timeless eloquence down through the centuries. But it's hard to beat "blah, blah, blah" as a verdict on the tangled web woven by the designers of Obamacare's so-called individual mandate.

In fact, during last week's oral arguments over the constitutionality of the health care law, the administration's lawyer couldn't bring himself to actually call the key point of contention "the mandate." It has become, for its defenders, the "minimum coverage provision."

Whatever you call it, the thing is a tax -- a tax you don't have to pay if you have health insurance. Considered as a tax with an exemption, it's hard to see why the mandate is any more constitutionally controversial than all the other "provisions" under which Americans get a tax break -- by purchasing a fuel-efficient car, or energy-conserving windows, or (at certain times) a house, or paying tuition, or giving money to charity, or many other favored expenditures.

The tax dodge, if you will, may prove to be a loophole big enough to save Obamacare. I don't how the court will rule (and despite all the predictions you've heard, neither does anybody else, except maybe the justices).

But don't be surprised if at least a few Supremes cut through the malarkey, proclaim the "provision" a tax in a dime-store disguise and conclude, as Justice Anthony Kennedy hinted they could, that "since ... Congress can do it anyway, we give a certain amount of latitude."

As it happens, Minnesotans should remember better than most the kind of embarrassing complexities politicians can create for themselves by refusing to call a tax a tax. Some may also recall how easily courts can extricate officials caught in a web of their own deceit.

Back in 2005, Gov. Tim Pawlenty resolved a budget crisis by proposing a 75-cent-per-pack "health impact fee" on cigarettes. Much fuss and ridicule followed his insistence that the charge was not a loathsome "tax" but a way to make tobacco firms reimburse the state for health care costs caused by smoking.

But Pawlenty's "fee" -- rather like Obama's "provision" -- soon ran into legal trouble. The tobacco companies noted a minor technicality. Hadn't they settled a massive lawsuit with the state a few years earlier, paying the state billions in exchange for a guarantee that the settlement would lay to rest, once and for all, claims for, well, reimbursement for health care costs caused by smoking?

The case went to the Minnesota Supreme Court. It is amusing to re-read the language of the 1998 settlement agreement the court was asked to interpret. In it, the state released the tobacco industry defendants from:

"... monetary Claims directly or indirectly based on, arising out of or in any way related to, in whole or in part, the use of or exposure to Tobacco Products." This included "any and all manner of civil claims, demands, actions, suits and causes of action, damages whenever incurred, liabilities of any nature whatsoever ... known or unknown, suspected or unsuspected, accrued or unaccrued ... that the State of Minnesota [and its related entities] whether directly, indirectly, representatively, derivatively or in any other capacity, ever had, now has or hereafter can, shall or may have..."

The court's response (if I may paraphrase): Blah, blah, blah. Waving aside the distinction between a fee and a tax, the court held that the agreement didn't use sufficiently "unmistakable language" to protect the companies from additional reimbursement demands.

No, really -- look it up.

And of course, in reality, the court was right. The state never had the slightest intention of giving up its basic governmental powers, which emphatically include the power to make people pay for stuff. That power isn't just fundamental to government, it is government.

While some of its key reforms are valuable, I have doubts about Obamacare, most of all about its ability to control costs. But if it is to be abandoned, it should be forthrightly repealed as an unwanted policy.

The effort to prove it somehow unconstitutional for the government to tax people who insure themselves a little less than it taxes people who don't seems a lot like the tobacco firms' gambit. It's an entertaining and richly deserved comeuppance for dissemblers in high office, but not really a serious question about government's ultimate powers.

In America today, there is almost no taxation without misrepresentation. But how much constitutional weight does political humbug really have?

In 2009, in a television interview, President Obama rejected the tax label for his mandate -- er, provision -- in tolerably unmistakable language. "It is absolutely not a tax increase," he declared, adding, "I absolutely reject that notion."

But now, the survival of the president's main achievement may hinge on the willingness of a few Supreme Court justices to give his "absolutism" no more respect than it deserves.

It's extraordinary, all right.


D.J. Tice is the Star Tribune's commentary editor.

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