Monday, January 31, 2011
At Friday's Healthcare Law in the Federal Courts symposium organized by the Federal Courts Law Review at the Charleston School of Law, Professor James Ely (Vanderbilt) and Professor Brian Galle (Boston College) debated whether the mandate that each individual must purchase health insurance or face a $695 penalty was constitutional.
Professor Ely made two arguments. First, he argued that the mandate exceeded Congress's authority under the Commerce Clause because the failure to buy health insurance was not economic activity. Second, Professor Ely argued that the mandate did not constitute a "tax" under the Taxing Clause because the legislation does not use the word tax, nor was the provision intended to be revenue raising.
In response, Professor Galle pointed out that health care amount to 1/7 of the economy. Professor Galle further presented points from his paper The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise, 121 Yale L.J. Online __ (2011). The abstract provides:
This brief essay responds to recent court decisions and scholarly commentary questioning the constitutionality of the Affordable Care Act. Criticism has focused in particular on the provision imposing a $695 penalty on those who fail to purchase qualifying health insurance.
I argue that, contrary to the courts and the commentators, this provision is valid as an exercise of Congress' power to lay and collect taxes. Although much has been made of Congress' use of the word "penalty" rather than tax, the Supreme Court has held since 1866 that Congress can invoke the tax power in litigation without using that term in the challenged statute. I also reject any normative arguments for rejecting that venerable rule as unpersuasive. In any event, the relevant section refers to the penalty it imposes as a "tax" 48 times.
More substantively, I argue that efforts to claim that the section would fall afoul of constitutional limits on "direct" taxes over-read those sections of the Constitution. Limits on direct taxes were the product of a compromise over slavery, and have no other obvious deep meaning. While we must honor the bargain that resulted in their inclusion in the Constitution, honor can be paid with a narrow reading that allows Congress, not courts, to make tax policy.
The Fourth Circuit has scheduled oral argument in the conflicting Virginia cases for the second week of May.