During the oral argument on ObamaCare, the justice who most concisely destroyed the government’s argument that it was a “tax” was … Chief Justice John Roberts.
Here was the colloquy between the chief justice and Solicitor General Donald Verrilli during the March 27, 2012 oral argument:
GENERAL VERRILLI: … it seems to me that not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.
CHIEF JUSTICE ROBERTS: Why didn’t Congress call it a tax, then?
GENERAL VERRILLI: Well –
CHIEF JUSTICE ROBERTS: You’re telling me they thought of it as a tax, they defended it on the tax power. Why didn’t they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objectives. But it is in the Internal Revenue Code, it is collected by the IRS on April 15th. I don’t think this is a situation in which you can say –
CHIEF JUSTICE ROBERTS: Well, that’s the reason. They thought it might be more effective if they called it a penalty. [Emphasis added].
In his eventual opinion, the chief justice concluded that what Congress expressly, purposely, and repeatedly called a “penalty” (not a “tax”), to be imposed on those who did not comply with the legislative mandate that they “shall” obtain insurance, could fairly be read as a tax — even though a tax is neither what Congress called it nor intended it to be — and thus within the Constitutional power to levy taxes. As an old law school professor used to say, I get it all except the “thus.”
Henceforth law professors will have to teach their students that the Constitutional provision allowing Congress to levy taxes includes not only (1) the power to levy taxes on things you do, income you earn, or other activities, but also (2) a judicially created power to levy “shared responsibility payments” on commerce you don’t engage in. This is an argument that all five appellate courts that considered the argument on the merits before it reached the Supreme Court rejected (one appellate court ruled it was a “tax” for purposes of the Anti-Injunction Act and dismissed the case without reaching the merits of any Constitutional question).
Writing for the Court, the chief justice held that the “shared responsibility payment” is a tax, even though Congress repeatedly called it a “penalty” in the law; went out of its way not to label it a tax; and had ObamaCare supporters, from the president on down, repeatedly deny it was a tax while the legislation was being considered — only to turn around and argue in court that a tax is what it was. Now that the chief justice has held it was a tax, the administration is again denying it was a tax.