08 September 2009

Health Care Tax Unconstitutional

Senator Max Baucus unveiled his "compromise" health care plan today. One of the signature elements is mandatory purchase of health insurance by all Americans:
Just as auto coverage is now mandatory in most states, Baucus would a require that all Americans get health insurance once the system is overhauled. Penalties for failing to get insurance would start at $750 a year for individuals and $1,500 for families. Households making more than three times the federal poverty level - about $66,000 for a family of four - would face the maximum fines. For families, it would be $3,800, and for individuals, $950.
Baucus needs to be flogged, flayed, drawn, and quartered for this insanity.

First, let us demolish the straw man comparison to automobile insurance.  The mandatory coverage for drivers is liability coverage.  Drivers must have insurance coverage to pay for damages they cause in an accident.  Nowhere in the 50 states is there a law mandating drivers or car owners have insurance to cover repairs to their own vehicles.  The only time such coverage is imposed on a vehicle owner is when a lien holder demands.  Auto liability coverage is hardly a parallel for health care insurance.

Requiring all people to purchase health insurance or pay a fine, moreover, is an unconstitutional health care capitation tax.  It is a tax because it is a levy imposed by the United States.  Worse, it is a direct tax imposed only on a subset of American citizens (those without health insurance), and thus is explicitly proscribed by the Constitution.

The power to tax is found in the first clause of Article 1 Section 8 of the Constitution:
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;
Article I Section 9 of the Constitution limits the power of taxation through the following restriction:
No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
The Sixteenth Amendment clarifies this language to explicitly allow taxes upon income:
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.
The penalty tax, being imposed arbitrarily on a discrete class of taxpayers--those persons not subscribed to a health insurance plan--is absolutely not uniformly imposed tax, nor is it imposed in proportion to a census or enumeration (indeed, the conditional nature of the tax precludes the possibilities of uniformity or proportionality).  It is not assessed with regard to income, and thus does not qualify as an income tax, and so is not excluded from the proportionality requirement via the Sixteenth Amendment.

The Supreme Court Case POLLOCK v. FARMERS' LOAN & TRUST CO (157 U.S. 429) states the matter quite explicitly:
Nothing can be clearer than that what the constitution intended to guard against was the exercise by the general government of the power of directly taxing persons and property within any state through a majority made up from the other states.
The health care penalty tax is unconscionable and unconstitutional, and needs to be eliminated from public debate on health care immediately.


  1. Good post, help where you can still find information on this topic?

  2. The information is out there. Virtually all Supreme Court opinions are available on FindLaw, and there are innumerable sources for the Constitution itself. As for the rest, one simply has to read broadly and with a healthy skepticism (news should not be considered news unless it is reported by two independent sources, in my view).


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