The Great Dissent Part III: Justices Argue Obamacare Mandate Unconstitutional Because It’s Not a Tax–and Why Mitt Romney is Right

This column by ACRU Senior Legal Analyst Ken Klukowski was published July 10, 2012 on

Confusion has reigned over whether Obamacare’s individual mandate is a tax, because politics has gotten in the way of serious discussion (no surprise there). As Governor Mitt Romney tried discussing the issue like the serious businessman and serious lawyer (Harvard Law School) that he is, political operatives were so busy making an important political point that it looked like they were on different pages.

Then Romney brought order to chaos by plainly stating: Obamacare’s Individual Mandate was a mandate with a penalty, not a tax. Although the Constitution allows states to impose mandates (like car-seat mandates for children, seat-belt mandates for adults, and car-insurance mandates for driving) such as Massachusetts, the same Constitution makes it illegal for the federal government to impose an insurance mandate. But when Chief Justice John Roberts saved the Individual Mandate by declaring it a tax, it now becomes a tax.

Thus the Individual Mandate was not a tax. The Massachusetts mandate is still not a tax. But now henceforth Obamacare’s Individual Mandate is a tax, thanks to an astounding declaration by the Supreme Court.

So Romney hit it exactly right: The individual mandate is unconstitutional unless it’s a tax. Romney was right to say that as a penalty it was unconstitutional. And once the Supreme Court (wrongly) declares it a tax, it’s now a tax. It would be nice if the rest of his party would get on board with their nominee’s message, because their nominee happens to be 100% correct, and seems to be one of the few leaders on television who fully grasps the law and the facts on this case.

This leads to the third part of a series on the Great Dissent. Part I discussed the dissenting justices’ conclusion on why Obamacare must be struck down, and Part II explained why the Commerce Clause does not authorize the Individual Mandate. In Part III, these four justices explain why the Individual Mandate is not a tax.

From Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito in NFIB v. Sebelius (omitting case names, citations, Latin phrases, and editing marks):

As far as §5000A [the section containing the Individual Mandate] is concerned, we would stop there. Congress has attempted to regulate beyond the scope of its Commerce Clause authority, and §5000A is therefore invalid. The Government contends, however, as expressed in the caption to Part II of its brief, that “the minimum coverage provision is independently authorized by Congress’s taxing power.” The phrase “independently authorized” suggests the existence of a creature never hitherto seen in the United States Reports: A penalty for constitutional purposes that is also a tax for constitutional purposes. In all our cases the two are mutually exclusive. The provision challenged under the Constitution is either a penalty or else a tax. Of course in many cases what was a regulatory mandate enforced by a penalty could have been imposed as a tax upon permissible action; or what was imposed as a tax upon permissible action could have been a regulatory mandate enforced by a penalty. But we know of no case, and the Government cites none, in which the imposition was, for constitutional purposes, both. The two are mutually exclusive… It is important to bear this in mind in evaluating the tax argument of the Government and of those who support it: The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so. In answering that question we must, if fairly possible, construe the provision to be a tax rather than a mandate-with-penalty, since that would render it constitutional rather than unconstitutional. But we cannot rewrite the statute to be what it is not. Although this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . . . or judicially rewriting it. In this case, there is simply no way, without doing violence to the fair meaning of the words used, to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.

Our cases establish a clear line between a tax and a penalty: A tax is an enforced contribution to provide for the support of government; a penalty . . . is an exaction imposed by statute as punishment for an unlawful act. In a few cases, this Court has held that a “tax” imposed upon private conduct was so onerous as to be in effect a penalty. But we have never held–never–that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power–even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty. When an act adopts the criteria of wrongdoing and then imposes a monetary penalty as the principal consequence on those who transgress its standard, it creates a regulatory penalty, not a tax.

So the question is, quite simply, whether the exaction here is imposed for violation of the law. It unquestionably is….


We never have classified as a tax an exaction imposed for violation of the law, and so too, we never have classified as a tax an exaction described in the legislation itself as a penalty… But we have never–never–treated as a tax an exaction which faces up to the critical difference betweena tax and a penalty, and explicitly denominates the exaction a “penalty.” Eighteen times in §5000A itself and elsewhere throughout the Act, Congress called the exaction in §5000A(b) a “penalty.”

That §5000A imposes not a simple tax but a mandate to which a penalty is attached is demonstrated by the fact that some are exempt from the tax who are not exempt from the mandate–a distinction that would make no sense if the mandate were not a mandate….


Against the mountain of evidence that the minimum coverage requirement is what the statute calls it–a requirement–and that the penalty for its violation is what the statute calls it–a penalty–the Government brings forward the flimsiest of indications to the contrary….

And the nail in the coffin is that the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found–in Title IX, containing the Act’s “Revenue Provisions.” In sum, the terms of the act render it unavoidable, that Congress imposed a regulatory penalty, not a tax.

For all these reasons, to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it. Judicial tax-writing is particularly troubling… We have no doubt that Congress knew precisely what it was doing when it rejected an earlier version of this legislation that imposed a tax instead of a requirement-with-penalty. Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry.

Finally, we must observe that rewriting §5000A as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population… the meaning of the Direct Tax Clause is famously unclear, and its application here is a question of first impression that deserves more thoughtful consideration than the lick-and-a-promise accorded by the Government and its supporters. The Government’s opening brief did not even address the question–perhaps because, until today, no federal court has accepted the implausible argument that §5000A is an exercise of the tax power… the Government devoted a mere 21 lines of its reply brief to the issue. At oral argument, the most prolonged statement about the issue was just over 50 words. One would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.

[After adding a point regarding the Anti-Injunction Act discussed in this case, the justices wrap up this part of their dissent by concluding:] The rhetorical device that tries to cloak this argument in superficial plausibility is the same device employed in arguing that for constitutional purposes the minimum-coverage provision is a tax: confusing the question of what Congress did with the question of what Congress could have done… That carries verbal wizardry too far, deep into the forbidden land of the sophists.