Ezra Klein’s tweet sums up nicely how political accountability can bite you in the ass:
When the mandate was passed–over the most narrow margins–the Democrats took great care to call the responsibility provision a “penalty” rather than a “tax.” This was the politically expedient thing to do. At the time, no one (not even me) could have predicted that such a decision would come back to bite them in the ass.
Now, the chickens have come home to roost. Ginsburg, Kagan, and Sotomayor all sought to hold Congress accountable to the positions they took:
RBG flatly rejected the fact that this should be viewed as a revenue-raising model:
JUSTICE GINSBURG: Mr. Long, you — you said before — and I think you were quite right — that the Tax Injunction Act is modeled on the Anti-Injunction Act, and, under the Tax Injunction Act, what can’t be enjoined is an assessment for the purpose of raising revenue. The Tax Injunction Act does not apply to penalties that are designed to induce compliance with the law rather than to raise revenue. And this is not a revenue-raising measure, because, if it’s successful, they won’t — nobody will pay the penalty and there will be no revenue to raise.
Sotomayor wasn’t having it:
JUSTICE SOTOMAYOR: Absolutely. But even the section of the Code that you referred to previously, the one following 7421, the AIA, it does very clearly make a difference — 7422 — make a difference between tax and penalties. It’s very explicit.
Nor was Kagan:
JUSTICE KAGAN: Mr. Long, aren’t there places in this Act — fees and penalties — that were specifically put under the Anti-Injunction Act? There is one on health care plans, there is one on pharmaceutical manufacturers, where Congress specifically said the Anti-Injunction Act is triggered for those. It does not say that here. Wouldn’t that suggest that Congress meant for a different result to obtain?
JUSTICE KAGAN: But, Mr. Long, aren’t you trying to rewrite the statute in a way? The statute has two sections. One is the you have to have insurance section and the other is the sanction. The statute has two different sets of exceptions corresponding to those two different sections. You are trying to suggest that the statute says: Well, it’s your choice; either buy insurance or pay a — or pay a fee.
But that’s not the way the statute reads. And Congress, it must be supposed, you know, made a decision that that shouldn’t be the way the statute reads, that it should instead be a regulatory command and a penalty attached to that command.
This is why the United States dropped this issue on appeal. They realized it was a loser.
See, e.g., Changing Stance, Administration Now Defends Insurance
Mandate as a Tax, N.Y. Times, July 17, 2010, at A14 (“When Congress required
most Americans to obtain health insurance or pay a penalty, Democrats denied that
they were creating a new tax. But in court, the Obama administration and its allies
now defend the requirement as an exercise of the government’s ‘power to lay and
Now, if you can, go all the way back to October 14, 2010, when District Court Judge Vinson ruled in favor of the challengers:
I will say one final thing on the tax issue, which, although I believe it to be
important, is not essential to my decision. For purposes of this discussion, I will
assume that the defendants are correct and that the penalty is (and was always
intended to be) a tax. In Virginia v. Sebelius, 3:10cv188, one of the twenty or so other lawsuits challenging the Act, the federal government’s lead counsel (who is lead defense
counsel in this litigation, as well) urged during oral argument in that case that the
penalty is proper and sustainable under the taxing power. Although that power is
broad and does not easily lend itself to judicial review, counsel stated, “there is a
check. It’s called Congress. And taxes are scrutinized. And the reason we don’t
have all sorts of crazy taxes is because taxes are among the most scrutinized
things we have. And the elected representatives in Congress are held accountable
for taxes that they impose.” See Transcript of Oral Argument (Virginia case), at 45
(emphasis added). This foregoing statement highlights one of the more troubling aspects of the defendants’ “newfound”8 tax argument. As noted at the outset of this order, and as anyone who paid attention to the healthcare reform debate already knew, the Act was very controversial at the time of passage. Irrespective of the merits of the arguments for or against it, the legislation required lawmakers in favor of the bill to cast politically difficult and tough votes. As it turned out, the voting was extremely close. Because by far the most publicized and controversial part of the Act was the individual mandate and penalty, it would no doubt have been even more difficult to pass the penalty as a tax. Not only are taxes always unpopular, but to do so at that time would have arguably violated pledges by politicians (including the President) to not raise taxes, which could have made it that much more difficult to secure the necessary votes for passage. One could reasonably infer that Congress proceeded as it did specifically because it did not want the penalty to be “scrutinized” as a $4 billion annual tax increase, and it did not want at that time to be “held accountable for taxes that they imposed.” In other words, to the extent that the defendants are correct and the penalty was intended to be a tax, it seems likely that the members of Congress merely called it a penalty and did not describe it as revenue-generating to try and insulate themselves from the potential electoral ramifications of their votes.
Regardless of whether the members of Congress had this specific motivation
and intent (which, once again, is not my place to say), it is obvious that Congress
did not pass the penalty, in the version of the legislation that is now “the Act,” as
a tax under its taxing authority, but rather as a penalty pursuant to its Commerce
Clause power. Those two exactions, as previously noted, are not interchangeable.
And, now that it has passed into law on that basis, government attorneys have
come into this court and argued that it was a tax after all. This rather significant
shift in position, if permitted, could have the consequence of allowing Congress to
avoid the very same accountability that was identified by the government’s counsel
in the Virginia case as a check on Congress’s broad taxing power in the first place.
In other words, the members of Congress would have reaped a political advantage
by calling and treating it as a penalty while the Act was being debated, see Virginia
v. Sebelius, 702 F. Supp. 2d 598, 612 (E.D. Va. 2010) (referring to “preenactment
representations by the Executive and Legislative branches” that the penalty was
not “a product of the government’s power to tax for the general welfare”), and
then reap a legal advantage by calling it a tax in court once it passed into law. See
Def. Mem. at 33-34, 49 (arguing that the Anti-Injunction Act bars any challenge to
the penalty which, in any event, falls under Congress’s “very extensive” authority
to tax for the general welfare). This should not be allowed, and I am not aware of
any reported case where it ever has been.
Congress should not be permitted to secure and cast politically difficult votes
on controversial legislation by deliberately calling something one thing, after whichthe defenders of that legislation take an “Alice-in-Wonderland” tack9 and argue incourt that Congress really meant something else entirely, thereby circumventing thesafeguard that exists to keep their broad power in check.If Congress intended for the penalty to be a tax, it should go back and make that intent clear (for example,by calling it a tax, relying on Congress’s Constitutional taxing power, allowing it to be collected and enforced as a tax, or identifying revenue to be raised) so it can be“scrutinized” as a tax and Congress can accordingly be held accountable. They cannot, however, use a different linguistic with a perhaps secret understanding between themselves that the word, in fact, means something else entirely
At the time, Vinson was ridiculed and lampooned as an ignorant Tea Party judge. Now, all 9 Justices seem to agree. Putting asides the issues of the health care case, it is an important point. If Congress tries to sidestep what would be politically unpopular by couching their decision in another provision, then they should be so bound. Congress cannot have its cake, and raise your taxes too.
Update: Reason links to a cartoon that nicely sums up Vinson’s Alice-in-Wonderland argument: