The Supreme Court has upheld the penalty for not purchasing a qualifying health care plan — a.k.a. the individual mandate — as a valid exercise of Congress’s taxing power. What was not described as a tax by anyone during the debates over the law — not by Congress, not by the President, not by media — has been retroactively turned into a tax. As a result, the Court has given a dangerous new power to Congress.
Words matter. The law runs off of words. Statutes and Supreme Court opinions are, after all, just words. And while those words may sometimes imperfectly describe the thing, they still create important distinctions.
Congress knows how to use the word tax. They also know that every time they use that word they face strong political backlash. People don’t like to be taxed. We fought a revolution in this country over “no taxation without representation.” Now, if Congress does not want to represent something as a tax, they certainly won’t, thus creating a new type of “taxation without representation.”
While Congress' using the word “tax” does not entirely determine whether something is a tax, it is a strong indicator. Other good indicators: the penalty for the mandate is not in tax portion of the act, Title IX, which is titled “Revenue Provisions”; the penalty is called a “penalty” throughout the act; the penalty is exacted from people who are under a “requirement” to maintain minimum essential coverage; finally, if the Act works as intended, no one will go without insurance, thus no one will pay the "tax."
Ignoring these simple indicators, Chief Justice Roberts held that the penalty is a tax. In many ways, it was a brilliant political maneuver. Faced with criticism of his Court since the 2010 decision of Citizens United v. FEC, Roberts may not have been prepared to endure similar political backlash. By strongly endorsing the conservative/libertarian arguments against the mandate, yet upholding the mandate as a tax, Roberts seems to believe that he can play mediator to an increasingly polarized body politic.
But even in this polarized climate, a majority of Americans oppose the Affordable Care Act. Roberts may have been mediating, but it was mostly between the left-wing liberal pundits, left-wing law professors, and the few libertarians and conservatives who dare to enter their territory.
Finally, let’s not forget an important, but often forgotten, point: the individual mandate was one of the largest, if not the largest, governmental gift to private industry in history. Today, the Supreme Court held that Congress can use “taxes” to coerce people into purchasing a product from a private business. The shared grievance of the Tea Party and Occupy Wall Street — that big business and government are too intertwined — is given a significant boon by today’s decision. Do not expect Congress to leave this new gift unopened.