General Welfare Fraud: Roberts creates a tax loophole

It’s fitting that the Supreme Court handed down its Obamacare ruling the same week that it threw out the “stolen valor” law against falsely claiming military decorations, because it has now enabled unconstitutional federal power grabs to go around masquerading as “General Welfare,” without any legal consequence.

Chief Justice John Roberts, in his single-minded determination to save the Democrats’ health care law from its own terminal defects, ruled it constitutional by recasting the individual mandate penalty as a tax. Justice Antonin Scalia spent a considerable part of his dissent explaining that, where the law is concerned, penalties and taxes are mutually exclusive categories. A penalty is assessed for the purpose of deterring a proscribed activity (or lack thereof, in this case), whereas a tax is levied against a legal activity for the purpose of raising revenue. Since the purpose in this case is to compel individuals to buy health insurance, the penalty for not doing so cannot be defined as a tax.

Scalia is correct as usual, but so what if he wasn’t? Let’s assume, for the sake of argument, that the individual mandate penalty is, constitutionally speaking, a tax. How does that render the mandate constitutional?

Roberts’ argument is that the mandate, being enforced by a tax, is validated by the clause in Article I Section 8 of the Constitution that empowers Congress to levy and collect taxes for the purpose of promoting the “general welfare.” Like many before him, he is taking that term to be roughly equivalent to the “common good,” and concluding that liberal government doogoodism is broadly endorsed by the Constitution.

What that clause actually says is that Congress shall have the power to lay and collect taxes “to pay the Debts and provide for the common Defence and general Welfare of the United States.” It is the welfare of the nation that is addressed here, not that of individual citizens or demographic groups. The fact that a majority of states had sued the federal government over this law ought to have taken the general welfare argument off the table from the outset.

Moreover, there is another mention of the phrase “general welfare” in the Constitution, in the Preamble, which lists its promotion among the reasons for which the document was written. If the Constitution is the instrument for promoting the general welfare, then Article I Section 8 cannot be understood to endorse an extraconstitutional act like requiring individuals to purchase health insurance.

Had our founders meant to allow the federal government to do whatever it felt was necessary for the common good, they would have simply granted Congress the power to provide for the general welfare, but they didn’t. They only wrote that Congress shall have the power to lay and collect taxes for that purpose. In light of the Preamble, this can only mean that Congress shall raise the revenues necessary to exercise those powers that are actually enumerated in the Constitution.

Roberts instead characterizes the congressional power of taxation as if it were the magical key that unlocks the escape hatch from the Constitution. He tells us so when he explains that an otherwise unconstitutional law is made to be constitutional by the implementation of a tax. Imagine trying to explain that one to James Madison.

This magical key theory is not in the Constitution, but it is now Supreme Court precedent, which makes it even more indelible. The misguided judicial principle of stare decisis (“to stand by that which is decided”) is adhered to far more strictly than the actual, written law of our land. Even if Obamacare is repealed legislatively, the Roberts rule will remain.

Next time the Democrats win back majorities like they had in 2009, they could require that we all paint the roofs of our houses white in order to combat the effects of “climate change.” As long as the initiative included a tax to pay for the painting, how could Roberts resist joining the four liberal justices to approve it? The tyrannical possibilities are nearly limitless.

Remember that it was Roberts who bungled the Presidential Oath of Office while administering it to President-elect Obama at his inauguration. We must now consider the possibility that he got it wrong on purpose, in order to give Obama a technicality under which he would not be bound to protect and defend the Constitution after all. Just think of it as another clever escape plan from that keeper of the magical keys, the wizardly Chief Justice John Roberts.

-- Daniel Clark is a writer from Pittsburgh, Pennsylvania. He is the author and editor of a web publication called The Shinbone: The Frontier of the Free Press, where he also publishes a seasonal sports digest as The College Football Czar.

To lay taxes to provide for the general welfare of the United States, that is to say, “to lay taxes for the purpose of providing for the general welfare”. For the laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. They are not to lay taxes ad libitum for any purpose they please; but only to pay the debts or provide for the welfare of the Union. In like manner, they are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase, not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please, which might be for the good of the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please. It is an established rule of construction where a phrase will bear either of two meanings, to give it that which will allow some meaning to the other parts of the instrument, and not that which would render all the others useless. Certainly no such universal power was meant to be given them. It was intended to lace them up strictly within the enumerated powers, and those without which, as means, these powers could not be carried into effect. ~ Thomas Jefferson; National Bank opinion, 1791

Exactly! It looks to me that Roberts has done to I.8.1 what Wickard and Raich did to the Commerce Clause. Comparing Madison and Roberts:

Madison on I.8.1:

A power to impose unlimited taxes for unlimited purposes could never have escaped the sagacity and jealousy which were awakened to the many inferior and minute powers which were criticised and combated in those public bodies.

http://press-pubs.uchicago.edu/founders/documents/a1_8_1s27.html

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Roberts on I.8.1

Put simply, Congress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.

More Jefferson, re: the taxation power: The Constitution says, “Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts, &c., provide for the common defence and general welfare of the United States”. I suppose the meaning of this clause to be, that Congress may collect taxes for the purpose of providing for the general welfare, in those cases wherein the Constitution empowers them to act for the general welfare. To suppose that it was meant to give them a distinct substantive power, to do any act which might tend to the general welfare, is to render all the enumerations useless, and to make their powers unlimited.

Of course, if Thomas Jefferson were Chief Justice, and had four like minds to vote with him, we could haul about 95% of the United States Code out to the dumpster, and the vast majority of the Code of Federal Regulations to boot.

Daniel Clark is a writer from Pittsburgh, Pennsylvania. He is the author and editor..

He is? For real? He's about AWESOME.

Maybe if you (third party, of course) mentioned his name
a few more times folks might pay attention to "him".

Who?

Next time the Democrats win back majorities like they had in 2009, they could require that we all paint the roofs of our houses white in order to combat the effects of “climate change.”

No they wont -- not after what has happened in the wake of the decision.

What they'll do is going back to expanding deductions. Instead of penalizing everyone for not painting houses white, they'll give a tax credit to those that do paint their houses, while letting the slow increase in wages raise the tax liability of everyone else.

Mathematically there's no difference between this and levying a penalty. But giving deductions sounds a lot better than raising taxes.

How many oppose the tax deduction for interest on mortgages? Those that don't pay big interest on mortgage debt pay more in taxes, don't they? Sounds like the government would like us to borrow more money and penalizes us if we don't. Buying educational services? You'll pay more in taxes if you don't.

Had Roberts ruled that such things were unconstitutional, there would be fury over the increase in taxes paid as deductions were eliminated.

Had Roberts ruled that such things were unconstitutional, there would be fury over the increase in taxes paid as deductions were eliminated.

Those are income tax issues and fall under the authority of the 16th Amendment rather than I.8.1.

The last thing President Madison did in office was to veto a highway bill that had been sent to him under the “general welfare” clause because he could find nothing in the Constitution that allowed him to use the tax money of one group of Americans to benefit another group of Americans.

Ladies and Gentlemen - I give you an actual patriot, President Madison.

I just read your posts of the last few days. It looks like you have confused Art. I, Sec. 8, Cl. 1 with the 16th Amendment in a number of those posts. Amendment XVI reads as follows...

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

This case did not involve the income tax.

This case did not involve the income tax.

It does involve the income tax, but that's not the part of the 16th that's most important here.

without apportionment among the several States, and without regard to any census or enumeration.

THAT's the part that's dangerous. It gives congress a free hand to levy any income tax using whatever criteria they wish.

Take away the second part of the amendment and congress would be force to deal fairly with everyone. They couldn't pick and choose who to help and who to punish with a larger tax.

This case has nothing to do with the 16th Amendment. It is about the taxing power of Congress under Article 1, Section 8, Clause 1:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

Here's a link to the decision. Point out where you think the 16th Amendment is at issue...

http://www.law.cornell.edu/supremecourt/text/11-393

At the link you provided:

"(c) Even if the mandate may reasonably be characterized as a tax, it must still comply with the Direct Tax Clause, which provides: “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” Art. I, §9, cl. 4. A tax on going without health insurance is not like a capitation or other direct tax under this Court’s precedents. It therefore need not be apportioned so that each State pays in proportion to its population. Pp. 40–41.

"It need not be apportioned" follows directly from the 16th amendment as this tax is a tax on income and not a direct tax covered by Art. I, §9, cl. 4. and income taxes are specifically exempted of the requirement that they be apportioned.

This is not a tax on income. As your citation says, it is a tax on going without health insurance. The authority cited by the Court is from I.8.1.

Ask yourself this. Suppose the 16th Amendment did not exist. Would this ruling have been any different? My answer is 'no'.

This is not a tax on income. As your citation says, it is a tax on going without health insurance.

It's both.

Those without insurance pay a larger tax on their income than those with insurance.

The very same thing happens when some people don't buy solar panels for their house or they don't purchase educational services -- they will pay more income tax than those that get the deductions or credits for those purchases. Mathematically it's the same thing.

Politically, though, perception of the two is different. Congress didn't want to be seen as increasing taxes, though that's what they did. And they didn't want to be seen giving deductions, since their constituents would see that giving taxpayers a tax break.

But it isn't perception and deceptive language that matters when trying to come to a correct judgement. If someone calls a tax a "penalty" in order to fool voters, it doesn't change the fact that the thing being called a "penalty" is still a tax. A tax is as a tax does.

I don't disagree with your points. However, none of that changes the fact that the case has nothing to do with the 16th Amendment. In an earlier post, in which you were speaking of mortgage deductions et al, you wrote:

Had Roberts ruled that such things were unconstitutional, there would be fury over the increase in taxes paid as deductions were eliminated.

There is simply no way he could have ruled such deductions unconstitutional since the 16th Amendment was not involved. Again, suppose the 16th Amendment did not exist. Would that have changed this ruling?

If the 16th amendment didn't exist, then deductions would be next to impossible to implement because of the difficulty of creating a deduction that would affect an equal proportion of people in each state.

Consider a deduction for solar panels. It's very unlikely that the proportion of citizens taking a deduction for solar panels in Maine would equal the proportion of citizens taking the deduction in California.

The disproportionate tax burden that would arise between the states of Maine and California would make such tax law unconstitutional.

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