Balkinization  

Monday, July 02, 2012

Clear Statement Rules and Taxes

Gerard N. Magliocca


Ever since Thursday, I've had an uneasy feeling about Chief Justice Roberts' opinion.  Now I think I know why.

The most interesting part of his ruling, I think, is the explanation of why letting Congress tax commercial inaction is not problematic given that Congress cannot command us to act in commerce. The Chief  gives three reasons for this distinction.

1.  Nothing in the Constitution says that inaction may not be taxed
2.  The courts would invalidate a tax that was high enough to amount to a penalty.
3.  Taxes are less coercive than commands.

What is missing from this list?  Do you see it?

The answer is that taxes are also subject to a robust political check.  In other words, because taxes are usually unpopular, Congress will be more hesitant to use that means than others to achieve its ends.  Why is this missing from the Roberts opinion? 

I think this "political accountability" limit was omitted because it is in tension with the Chief Justice's view that it doesn't matter (for purposes of the taxing power) whether Congress calls something a "tax."  The political check on the taxing power. though, is weakened substantially if Congress can hide new taxes by calling them penalties.

In this respect, the Chief Justice is wrong when he says that it is formalistic to say that a self-described penalty should not be recharacterized as a tax for constitutional purposes.  A better approach, really, would be to have a clear statement rule that says Congress may act under its taxing power only if it says "tax."  In a clear statement situation, form is an important way of protecting certain constitutional values.  No court would take a functional approach towards, say, jurisdiction stripping.

The flaw is the Chief's functional analysis with respect to taxation is proved by the reaction from elected officials since Thursday.  Nobody wants to admit that the individual mandate is a tax.  Not the President, not Nancy Pelosi, not even Mitt Romney (who imposed a similar "penalty" in Massachusetts).  It's not just a label. 


UPDATE:  Here is a paper by Akhil Amar (written well before the opinion came down), that rejects the position that I take in this post.  You can take a look at that portion and decide who's right!      

Comments:

The Chief explained how the thing worked. People aren't criminals if they have to pay. The thing uses the tax code and authority to define how it operates and how it is collected.

People knew this. Yes, Congress doesn't like to call things taxes. But, not calling something a tax making it not one hasn't been the rule. Better approach or not, that would have been a new rule.

The best approach would have been understanding that what actually is happening here is what mattered. Don't call it a "tax," if you want, but it still isn't functionally really a "mandate" like militia service or jury duty, even if you want (for some reason) to make them different.

It is a more minor burden that can unlike those things be avoided via a likely underenforced fiscal penalty that is as Brian Galle et. al. noted surely looks like a tax and uses "tax" a lot when saying how to collect it.

Is this "not just a label" approach to be applied in other contexts? Laws have lots of somewhat hidden aspects done on the downlow (like loopholes), in fact a lot more hidden than this well discussed fiscal penalty.

I never really bought this argument. The people knew what this law did here. It wasn't secret. Why should I care if the $695 is called something else? Call it a fee, a license, a penalty, it still is $695.

But, anyway, functionally it was not "improper." Say it wasn't improper in advancement of the CC if you like. Bottom line holds.

Since "taxes" - popular passage of fiscal requirements -- is not the same as taking power from a co-equal branch j. stripping is an imperfect comparison.
 

Thus, we read:

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. [listing reasons]

It looks like a tax. This is a check. Saying something isn't a duck as it quacks is of limited value.

"Nobody wants to admit that the individual mandate is a tax."

Politicians don't like to admit they did things all the time. At the time, some DID call it a tax. The government cited this in their briefs. Seems better to look at what they actually did, not rely on what, public statements, not even legislative history?

Of course, if the Dems want to defend it in another way, including agreeing with Ginsburg in full, they have that right.
 

It seems a bit radical to impose a clear statement rule here, no?

It's worth pointing out that a clear statement rule ("CSR") is simply the following presumption: not-X unless Congress clearly expressed X.

You mention jurisdiction-stripping as an example of where CSRs are applied, but I think that really cuts against your argument. In those cases, the Court applied a CSR in order to AVOID getting to the constitutional question. While the Court is wary of Congressional attempts to limit its appellate jurisdiction, it is likewise wary of rampant assertions of judicial review. So the Court uses the CSR in order to give Congress the benefit of the doubt.

The application of the CSR in other areas, such as abrogation of state sovereign immunity, preemption, and preclusion of state court jurisdiction over federal claims, might be more relevant to your argument. But in each of those cases, the constitutional value that is protected by CSRs is federalism itself.

It seems to me that a major reason for the application of CSRs here is that the Court is simply out of ideas when it comes to protecting the states from encroaching federal power. The Healthcare Cases demonstrate that -- the activity/inactivity distinction is pure artifice, without any basis in history or law. The Court is simply incapable as an institution of delineating the substantive boundaries between federal and state power. So instead, the CSR allows the Court to interpret statutes in ways that protect states.

There are several problems with applying a CSR here. First, what's the constitutional value that is being protected here, political accountability? That seems to be a rather vague basis for the application of a CSR. Second, the application of the CSR here flips the logic of the application of CSRs in the other contexts. In those cases, CSRs were applied to either PROTECT a law from being unconstitutional (by interpreting it in a way that might not be the most natural reading) or PROTECT states from federal encroachment. Here, the CSR would be applied to determine whether a law was within Congress' enumerated powers. That is, Congress would assume law X does not impose a tax unless Congress expressly states that law X is a tax.

Can you name another Congressional power on which the Court has placed such formal requirements? If anything, the Court has the opposite instinct (as Roberts expressly indicates in his opinion). The first thing that comes to my mind is Congressional authorization for the use of military force -- the Court has historically bent over backwards in order to find such authorization. Just compare: when was the last time there was a declaration of war? And when was the last time there was an actual war? It seems to me that the greater should include the lesser, here.

And as a matter of policy: (1) nothing the Court said will prevent Republicans from calling the mandate a tax, (2) the Democrats and the President have paid a severe political price for this legislation, and (3) do we really want to make it harder for laws to get passed?
 

This comment has been removed by the author.
 

I also wanted to note that, as a doctrinal matter, I think there are serious issues with the application of clear statement rules. As I adverted to in my previous comment, clear statement rules are used in situations where the Court wants to protect a constitutional value, but is unable to do so, at least in a judicially manageable way. So the Court "cheats" in a way, by reinterpreting statutes in order to protect that constitutional value.

But if the Court cannot define a doctrinal test with any degree of particularly, designed to protect the value, I wonder whether the value is something that the Court really should be protecting in the first place. In the context of federalism, the Constitution already contains a set of specific provisions that strike a balance between federal and state relations. By reading into the Constitution the (vague) value of federalism, the Court redraws this balance without even getting to the constitutional question! This is likewise true with the application of a CSR to the Taxing Power, if we assume "political accountability" as the relevant constitutional value.

And as an aside, I wonder whether "political accountability" is a paramount constitutional value in the first place. I'm thinking, of course, of Article I, Section 5: "Each House shall keep a journal of its proceedings, and from time to time publish the same, excepting such parts as may in their judgment require secrecy; and the yeas and nays of the members of either House on any question shall, at the desire of one fifth of those present, be entered on the journal."

In any case, just because the American public is obsessed with taxes now, doesn't mean that it will be in the future. Is the Court supposed to keep a finger on the pulse of public consciousness to determine when it should step in to impose label-requirements on Congressional enactments?

(fixed a typo)
 

"In the context of federalism, the Constitution already contains a set of specific provisions that strike a balance between federal and state relations."

Indeed, but since the Court flushed them down the toilet in the late 1930's, and is severely allergic to admitting any past decision was "wrong", they're groping around for a way to create some new source of balance.

Such efforts are doomed to be incoherent.
 

since the Court flushed them down the toilet in the late 1930's

Thus, now states can be sued in all cases, their officers are forced to carry out public programs even if they don't accept federal funds in trade and so forth. No? Well, okay. Don't count, I guess.

As to "error," what else did they do in the 1930s and beyond? Strongly protect civil liberties in many ways, repeatedly admitting they were "wrong" in the past.

OTOH, regulating interstate commerce and federal taxes to address national problems by stuff passed by representatives from each state with many veto points as checks is a primary reason the Constitution is in place in the first place. Brett doesn't like certain aspects of it any more than Sandy Levinson, but that's still the case.
 

Brett once again demon-strates his personal need for constitutional Drano with:

" ... but since the Court flushed them down the toilet in the late 1930's, ...."

with his clogged views, apparently wishing for the good old days before he was born.
 

With respect to Gerard's update, in deciding "who's right!" between him and Amar, Gerard has the after-the-fact advantage. Perhaps in fairness, Gerard should point to his position, if he took one, PRIOR to the ACA decision, for comparison with Amar.
 

My position prior to the case was that "nobody will take the taxing power argument seriously." BTW, I like my crow medium-rare.
 

"Well done," Gerard, and Jack will serve you shortly, as the Umpire (CJ Roberts) will make sure the serve is proper.
 

Gerard:

The spin on the right is that Roberts is a political genius by calling this individual mandare a tax and thus giving conservatives a tool aginst such future "taxes." This is nothing but spin, however. Voters loathe the individual mandate becuase they don't want their government telling them what to buy, not because of any neat distinctions between taxes and fines.
 

Yes, let us pretend that all voters loathe ACA. Let's also pretend that they specifically loathe the mandate, for the specific reasons we say. Let's also pretend that they understand the mandate, or ACA. Let's also pretend that no one has purveyed fear and lies about that. Let us live in a dream world where all this is true.

Or we could, I don't know, live in the real world.

In reality, much of the public does fear what it has been told is terrible. When the sky does not fall, they may feel different.

In reality, the market for broccoli is nothing like the market for health care.

And in reality, their government already tells them what to buy. Uninsured drivers are unclear on that; the rest of us get it. If you're not, have your clients explain it to you.
 

I should mention that I owe my points to John Manning's 2010 article, Clear Statement Rules and the Constitution, which can be found here:
http://www.columbialawreview.org/assets/pdfs/110/2/Manning.pdf

Meant to post this earlier, but I couldn't remember the article and author.
 

You can take a look at that portion and decide who's right!

Amar.
 

jpk:

Give your fellow citizens a modicum of credit. There is nothing complicated about the Obamacare mandate - buy government designed insurance or we fine you.

Why is it whenever the citizenry rejects a progressive policy, progressives automatically assume the citizenry is too stupid to understand the policy. Generally, the citizenry rejects these schemes because they understand them all to well.
 

Wait, the mandate requires that we buy "government-designed" insurance? I thought that one of the purposes of the mandate was to preserve the role of the private marketplace.

In any case, it's not nice to generalize. I don't mean to be rude, but comments like that are quite unimpressive.
 

I wonder whether "political accountability" is a paramount constitutional value in the first place.
android flytouch
 

Slightly off-ACA-topic:

1. How might CJ Roberts' "sWITCH" impact sales of El Nino's new book?

2. How about the possibility of CJ Roberts shorting Intrade's 80% odds of ACA being unconstitutional? (Might he be "hiding" in the Caymans rather than Malta?)

3. Jon Stewart and Stephen Colbert may be holed up with CJ Roberts fact-checking for their returns a week from Monday with real fake news on the current fake real news. Imagine the three of them in a boat with the Aflac duck plugging leaks.

4. Mark Tushnet's "Leakapalooza" series of posts at this Blog have plenty of tongue in cheek.

5. Have we heard from Ed Lazarus?

6. Since many are owning up to their predictions on ACA, here's my comment on Sandy's 3/28/12 post "More on 'liberty principles":


"Back in the fall of 1952, my favorite class at law school was ConLaw taught by Thomas Reed Powell. The class focused primarily on the Commerce Clause as this preceded the Warren Court. One day between classes I asked Prof. Powell how he thought the Supreme Court might rule on an issue making its way through lower courts (that I think involved baseball), and he responded substantially as follows: "I stopped trying to figure out a long time ago how those bozos might decide." (The word "bozo" was not an active part of my vocabulary back then, but I recall him using it. But now at age 81, I am well aware that the memory is the second thing to go.)

Prof. Powell knew many of the members of the Court during his long career as a constitutional scholar, socially, professionally, etc. His views were well expressed in his 1955 Carpentier Lectures at Columbia published posthumously in 1956 as "Vagaries and Varieties in Constitutional Interpretation" by Columbia University Press. I was not aware of these Lectures until after my retirement, learning of them via the Internet. I was able to purchase a "library" copy for a few dollars.

"I could hear Prof. Powell's voice as I read the book. Originalism was not yet in vogue and the Warren Court had only been sitting less than two years at the time. So Prof. Powell did not have much to say about the Warren Court. Prof. Powell did refer to specific justices - without actually referring to them as "bozos" - regarding certain decisions.

"I don't know if this book has been "published" on the Internet by Google. It is difficult to come by on the used book market. I don't know how many libraries have it actively shelved. But it's a shame that it is not more readily available.

"I bring this up because of the current minute-to-minute unlimited discussions of ACA on the Court's oral arguments. It's like the Roman Coliseum Days or the new fighting style of "Roberts'" [CJ] Rules. Imagine how more incisive the questions might be live on TV with the ability to observe Justices' body language (even though limited by their robes). Consider the pressures on the Justices regarding outcomes of the eventual decision on the health of many otherwise uninsured and unprotected.

"So, I'm not going to predict what those "bozos" might do. Yesterday's Boston Globe front page featured photos of eight of the Justices, each accompanied by a quote during orals on Tuesday. This brought to mind the silence of the Court's doubting Thomas, which may be deafening in comparison, as it seems quite clear that he would vote against ACA.
# posted by Blogger Shag from Brookline : 7:56 AM"
 

Re: point 6 of my preceding comment, we now have " ... minute-to-minute unlimited discussions of ACA on the Court's ... " decision and leakage on our Article III Ship of State. This might be an opportunity for "Capitol Steps" to channel Gilbert & Sullivan, incorporating the Aflac duck as in the movie "Ted." This could include President Obama "nominating" the Aflac duck to the Court, supported by a chorus of Jan Crawford, Paul Campos and George Will, singing "Leaks, Geeks and Beaks" for the Senate's approval.

It has been said that humor can be healing. So perhaps CJ Roberts' constitutional approval of ACA triggering "Leakapalooza" is a win-win for America's health.

What we need are some song titles, e.g., a parody of "The Good Ship Lollypop" for the closing number. This could replace "The Book of Mormons" on Broadway, working in Sandy's book on Constitutional Faith and Jack's on Constitutional Redemption. We can work on casting later.

Now it's time for my eye drops.
 

How about these potential song titles for "Leakapalooza":

"Blindfold Peek-A-Boo" (with Lady Gaga as Lady Justice?)

"Judasial [sic] Review Revisited"

"Roberts' Rues"

"Mr. Roberts, The Constitution Is Not A Potted Plant!" (sung by Randy Barnett smoking a "doobie" rolled in a page from Justice Scalia's concurring opinion in Raich)

Come on, gang. I can feel my blood pressure and bad cholesterol going down. Add some song titles to improve my health.
 

An alternate title for "Leakapalooza" may be "Justices of Penance." Somehow we could work in "walking the plank" featuring you-know-whom. Another song title:

"The Chief's 5-4 Walk-off" (sung by a chorus dressed as baseball umpires)

Here's another (admittedly aPAULing):

"Clement-times Out of Season"
 

And then I thought of writing:

"Give Me Liberty or Give Me Broccoli" (sung by a chorus of Libertarians, if lucky enough to be able to find more than one)

"Constitutional Tax-on-omy" (sung by a contortionist climaxing in the shape of a pretzel under the direction of Jack Balkin)
 

Give your fellow citizens a modicum of credit. There is nothing complicated about the Obamacare mandate - buy government designed insurance or we fine you.

Thanks so much for helping demonstrate a misunderstanding of ACA common to the public at the moment. Again: this is not an accident.

However credit cannot be given merely for demonstrating ignorance. To earn credit, explain how this misunderstanding differs from how ACA works.
 

jpk:

Do you actually suggest that Obamacare does not design your health insurance and/or that you will not pay a fine if you decline to buy this insurance?

This is an open book test where you are encouraged to read the actual bill before answering.

Extra credit is given for correctly stating the number of times the bill states "The Secretary shall..." implement a change in your health insurance.
 

My prediction that public sentiment on ACA will change when they get to know it, rests on the premise that at present they don't know it. Thank you for providing an example of that. Of course, one example doesn't establish a premise; you merely illustrate it, as well as the effectiveness of a misinformation campaign.

Now: if you're tired of being an example of ignorance, nothing is stopping you from learning the facts about the legislation. For starters, its name.

Or not. If you prefer ignorance, that's an option too, and an easy one: you need do nothing.
 

This comment has been removed by the author.
 

Before this thread heads to the Balkin Archives, consider a couple more musical numbers for "Leakapalooza," or "Bounty of the Mutiny":

"Robe Rage!" (a solo by El Nino inspired by his AZ dissent)

"Citizens Untied: 5-4" (with choreography in the form of a tug of war)

"From Yalta to Malta" (with the 4-dissenteres "serenading" CJ Roberts as he leaves the Courthouse for his fortress hideaway - this could be a closing number)

Now on to "breadboarding" the production.

By the way, I appreciate Mark Tushnet's recent post on "balls and strikes" as it's part of my theme for this musical extravaganza: CJ Roberts got the balls ....
 

I too think the Amar argument is convincing & though it is a tad too creative for current precedent, the 13/14A "Occupy Constitution" approach at the end (see also, a post by one of the non-comment brigade here) has bite too.

Amar, with his handy pocket Constitution, sounds like an interesting guy to have as a professor. Looks and sounds like a character.
 

Here's an alternate-title musical number for "Leakapalooza":

"Rich Citizens Untied: 5-4" (featuring Stephen Colbert and his SuperPak at Las Vegas playing political roulette)
 

The casting for the movie on "the leak" is already in the works but some of the opening options are a bit questionable.

http://www.washingtonpost.com/lifestyle/style/did-the-high-court-spring-a-health-care-leak/2012/07/05/gJQAQH4kQW_graphic.html


Randy Barnett can play himself given he showed his acting chops in an lesser known sci fi flick & over at VC where he acts pretty clueless if somewhat not convincingly.
 

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