Editors’ Note: The following is taken from the dissent from the majority ruling in the Patient Protection and Affordable Care Act cases.
The Taxing Power
As far as §5000A is concerned, we would
stop there. Congress has attempted to regulate beyond the scope of its
17 Cite as: 567 U. S. (2012)
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.” Petitioners’
Minimum Coverage Brief 52. 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. Thus,
what the Government’s caption should have read was “ALTERNATIVELY, THE
MINIMUM COVERAGE PROVISION IS NOT A MANDATE-WITH-PENALTY BUT A TAX.” 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,” Crowell v. Benson,
285 U. S. 22, 62 (1932), construe the provision to be a tax rather than
a mandate-with-penalty, since that would render it constitutional
rather than unconstitutional (ut res magis valeat quam pereat). But
we cannot rewrite the statute to be what it is not. “‘“[A]lthough 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.’” Commodity Futures Trading Comm’n v. Schor, 478 U. S. 833, 841 (1986) (quoting Aptheker v. Secretary of State, 378 U. S. 500, 515 (1964), in turn quoting Scales v. United States,
367 U. S. 203, 211 (1961)). In this case, there is simply no way,
“without doing violence to the fair meaning of the words used,” Grenada County Supervisors v. Brogden,
112 U. S. 261, 269 (1884), 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.’” United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U. S. 213, 224 (1996) (quoting United States v. La Franca,
282 U. S. 568, 572 (1931)). 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 “adopt[s] 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. Child Labor Tax Case, 259 U. S. 20, 38 (1922).
So the question is, quite simply, whether the exaction here is
imposed for violation of the law.
It unquestionably is. The
minimum-coverage provision is found in 26 U. S. C. §5000A, entitled “Requirement to maintain minimum essential coverage.” (Emphasis added.) It commands that every “applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage.” Ibid. (emphasis
added). And the immediately following provision states that,
“[i]f . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty.”
§5000A(b) (emphasis added). And several of Congress’
legislative“findings” with regard to §5000A confirm that it sets forth a
legal requirement and constitutes the assertion of regulatory power,
not mere taxing power. See 42 U. S. C. §18091(2)(A) (“The requirement
regulates activity . . . ”);§18091(2)(C) (“The requirement . . . will
add millions of new consumers to the health insurance market . . . ”);
§18091(2)(D) (“The requirement achieves near-universal coverage”);
§18091(2)(H) (“The requirement is an essential part of this larger
regulation of economic activity, and the absence of the requirement
would undercut Federal regulation of the health insurance market”);
§18091(3) (“[T]he Supreme Court of the United States ruled that
insurance is interstate commerce subject to Federal regulation”).
The Government and those who support its view on the tax point rely on New York v. United States,
505 U. S. 144, to justify reading “shall” to mean “may.” The “shall” in
that case was contained in an introductory provision — a recital that
provided for no legal consequences — which said that “[e]ach State shall
be responsible for providing . . . for the disposal of . . . low-level
radioactive waste.” 42 U. S. C. §2021c(a)(1)(A). The Court did not hold
that “shall” could be construed to mean “may,” but rather that this
preliminary provision could not impose upon the operative provisions of
the Act a mandate that they did not contain: “We . . . decline
petitioners’ invitation to construe §2021c(a)(1)(A), alone and in
isolation, as a command to the States independent of the remainder of
the Act.” New York, 505 U. S., at 170. Our opinion then proceeded to “consider each [of the three operative provisions] in turn.” Ibid.
Here the mandate — the “shall” — is contained not in an inoperative
preliminary recital, but in the dispositive operative provision itself. New York provides no support for reading it to be permissive.
Quite separately, the fact that Congress (in its own words)
“imposed . . . a penalty,” 26 U. S. C. §5000A(b)(1),for failure to buy
insurance is alone sufficient to render that failure unlawful. It is one
of the canons of interpretation that a statute that penalizes an act
makes it unlawful: “[W]here the statute inflicts a penalty for doing an
act, although the act itself is not expressly prohibited, yet to do the
act is unlawful, because it cannot be supposed that the Legislature
intended that a penalty should be inflicted for a lawful act.” Powhatan Steamboat Co. v. Appomattox R. Co.,
24 How. 247, 252 (1861). Or in the words of Chancellor Kent: “If a
statute inflicts a penalty for doing an act, the penalty implies a
prohibition, and the thing is unlawful, though there be no prohibitory
words in the statute.” 1 J. Kent, Commentaries on American Law 436
(1826).
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. To be sure, we have
sometimes treated as a tax a statutory exaction (imposed for something
other than a violation of law) which bore an agnostic label that does
not entail the significant constitutional consequences of a penalty —
such as “license” (License Tax Cases, 5 Wall. 462 (1867)) or “surcharge” (New York v. United States, supra.). But we have never — never — treated
as a tax an exaction which faces up to the critical difference between a
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. Section 5000A(d) exempts three
classes of people from the definition of “applicable individual” subject
to the minimum coverage requirement: Those with religious objections or
who participate in a “health care sharing ministry,”§5000A(d)(2); those
who are “not lawfully present” in the United States, §5000A(d)(3); and
those who are incarcerated, §5000A(d)(4). Section 5000A(e) then creates a
separate set of exemptions, excusing from liability for the penalty
certain individuals who are subject to the minimum coverage requirement:
Those who cannot afford coverage, §5000A(e)(1); who earn too little
income to require filing a tax return,
§5000A(e)(2); who are members of an Indian tribe, §5000A(e)(3); who
experience only short gaps in coverage, §5000A(e)(4); and who, in the
judgment of the Secretary of Health and Human Services, “have suffered a
hardship with respect to the capability to obtain coverage,”
§5000A(e)(5). If §5000A were a tax, these two classes of exemption would
make no sense; there being no requirement, all the exemptions would attach to the penalty (renamed tax) alone.
In the face of all these indications of a regulatory requirement
accompanied by a penalty, the Solicitor General assures us that “neither
the Treasury Department nor the Department of Health and Human Services
interprets Section 5000A as imposing a legal obligation,” Petitioners’
Minimum Coverage Brief 61, and that “[i]f [those subject to the Act] pay
the tax penalty, they’re in compliance with the law,” Tr. of Oral Arg.
50 (Mar. 26, 2012). These selfserving litigating positions are entitled
to no weight. What counts is what the statute says, and that is entirely
clear. It is worth noting, moreover, that these assurances contradict
the Government’s position in related litigation. Shortly before the
Affordable Care Act was passed, the Commonwealth of Virginia enacted Va.
Code Ann. §38.2–3430.1:1 (Lexis Supp. 2011), which states, “No resident
of [the] Commonwealth . . . shall be required to obtain or maintain a
policy of individual insurance coverage exceptas required by a court or
the Department of Social Services . . . ” In opposing Virginia’s
assertion of standing to challenge §5000A based on this statute, the
Government said that “if the minimum coverage provision is
unconstitutional, the [Virginia] statute is unnecessary, and if the
minimum coverage provision is upheld, the state statute is void under
the Supremacy Clause.” Brief for Appellantin No. 11–1057 etc. (CA4), p.
29. But it would be void under the Supremacy Clause only if it was
contradicted by a federal “require[ment] to obtain or maintain a policy
of individual insurance coverage.”
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.
It notes that “[t]he minimum coverage provision amends the Internal Revenue Code
to provide that a non-exempted individual . . . will owe a monetary
penalty, in addition to the income tax itself,” and that “[t]he
[Internal Revenue Service (IRS)] will assess and collect the penalty in
the same manner as assessable penalties under the Internal Revenue
Code.” Petitioners’ Minimum Coverage Brief 53. The manner of collection
could perhaps suggest a tax if IRS penalty-collection were unheard-of or
rare. It is not. See, e.g., 26 U. S. C. §527(j) (2006 ed.)
(IRS-collectible penalty for failure to make campaign-finance
disclosures);§5761(c) (IRS-collectible penalty for domestic sales of
tobacco products labeled for export); §9707 (IRS-collectible penalty for
failure to make required health-insurance premium payments on behalf of
mining employees). In Reorganized CF&I Fabricators of Utah, Inc., 518 U. S. 213, we held that an exaction not only enforced by the Commissioner of Internal Revenue but even called a
“tax” was in fact a penalty. “[I]f the concept of penalty means
anything,” we said, “it means punishment for an unlawful act or
omission.” Id., at 224. See also Lipke v. Lederer,
259 U. S. 557 (1922) (same). Moreover, while the penalty is assessed and
collected by the IRS, §5000A is administered both by that agency and by
the Department of Health and Human Services (and also the Secretary of
Veteran Affairs), see §5000A(e)(1)(D), (e)(5), (f)(1)(A)(v),(f)(1)(E)
(2006 ed., Supp. IV), which is responsible for defining its substantive
scope — a feature that would be quite extraordinary for taxes.
The Government points out that “[t]he amount of the penalty will be
calculated as a percentage of household income for federal income tax
purposes, subject to a floor and [a] ca[p],” and that individuals who
earn so little money that they “are not required to file income tax
returns for the taxable year are not subject to the penalty”(though they
are, as we discussed earlier, subject to the mandate). Petitioners’
Minimum Coverage Brief 12, 53.But varying a penalty according to ability
to pay is an utterly familiar practice. See, e.g., 33 U. S. C.
§1319(d) (2006 ed., Supp. IV) (“In determining the amount of a civil
penalty the court shall consider . . . the economic impact of the penalty
on the violator”); see also 6 U. S. C. §488e(c); 7 24 U. S. C.
§§7734(b)(2), 8313(b)(2); 12 U. S. C. §§1701q–1(d)(3), 1723i(c)(3),
1735f–14(c)(3), 1735f–15(d)(3), 4585(c)(2); 15 U. S. C. §§45(m)(1)(C),
77h–1(g)(3), 78u–2(d), 80a–9(d)(4),80b–3(i)(4), 1681s(a)(2)(B),
1717a(b)(3), 1825(b)(1), 2615(a)(2)(B), 5408(b)(2); 33 U. S. C.
§2716a(a).
The last of the feeble arguments in favor of petitioners that we will
address is the contention that what this statute repeatedly calls a
penalty is in fact a tax because it contains no scienter requirement.
The presence of such a requirement suggests a penalty — though one can imagine a tax imposed only on willful action; but the absence of
such a requirement does not suggest a tax. Penalties for
absolute-liability offenses are commonplace. And where a statute is
silent as to scienter, we traditionally presume a mens rea requirement if the statute imposes a “severe penalty.” Staples v. United States,
511 U. S. 600, 618 (1994). Since we have an entire jurisprudence
addressing when it is that a scienter requirement should be inferred
from a penalty, it is quite illogical to suggest that a penalty is not a
penalty for want of an express scienter requirement.
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 rende[r] it unavoidable,” Parsons v. Bedford, 3 Pet. 433, 448 (1830), 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. Taxes have never been
popular, see, e.g., Stamp Act of 1765, and in part for that
reason, the Constitution requires tax increases to originate in the
House of Representatives. See Art. I, §7, cl. 1. That is to say, they
must originate in the legislative body most accountable to the people,
where legislators must weigh the need for the tax against the terrible
price they might pay at their next election, which is never more than
two years off. The Federalist No. 58 “defend[ed] the decision to give
the origination power to the House on the ground that the Chamber that
is more accountable to the people should have the primary role in
raising revenue.” United States v. Munoz-Flores, 495 U. S.
385, 395 (1990). 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. See Affordable
Health Care for America Act, H. R. 3962, 111th Cong., 1st Sess., §501
(2009); America’s Healthy Future Act of 2009, S. 1796, 111th Cong., 1st
Sess., §1301. 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. Art. I, §9,
cl. 4. Perhaps it is not (we have no need to address the point); but 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. And once respondents raised the issue, the Government
devoted a mere 21 lines of its reply brief to the issue. Petitioners’
Minimum Coverage Reply Brief 25. At oral argument, the most prolonged
statement about the issue was just over 50 words. Tr. of Oral Arg. 79
(Mar. 27, 2012). One would expect this Court to demand more than
fly-by-night briefing and argument before deciding a difficult
constitutional question of first impression.
No comments:
Post a Comment