Under the U.S. Supreme Court: What Roberts actually said about healthcare 'tax'

By MICHAEL KIRKLAND, UPI Senior Legal Correspondent
Under the U.S. Supreme Court: What Roberts actually said about healthcare 'tax'
U.S. President Barack Obama shakes hands with Supreme Court Chief Justice John Roberts as he enters the House Chamber to deliver his State of the Union address on Jan. 25, 2011. -- UPI/Pat Benic | License Photo

WASHINGTON, July 8 (UPI) -- Chief Justice John Roberts wrote the Supreme Court opinion last month declaring the individual healthcare mandate is constitutional because the penalty for violating the mandate may be considered a tax -- thereby igniting a political firestorm -- but what did Roberts actually say?

Roberts said he called the individual mandate penalty a tax, though he could have called it something else, because that was the only way to save the mandate.


The chief justice said Supreme Court precedent compelled him to interpret President Obama's Patient Protection and Affordable Care Act in a way that affirmed its constitutionality, if that interpretation is "fairly possible," even though it may not be the most reasonable reading of the act.

Roberts had his way because the court's four conservatives wanted to strike down the act and its four liberals wanted to uphold the act under the Commerce Clause -- Congress' power to regulate interstate commerce. The four liberals joined Roberts opinion, forming the five-justice majority to uphold the act under Congress' taxing power even though they weren't enthralled with the penalty as tax argument.

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The administration's main argument was that the act is constitutional under the Commerce Clause. The justification under Congress' taxing power was secondary and barely touched on in oral argument.

For most of his 59-page opinion, Roberts said the penalty for violating the mandate, not buying some kind of insurance if you can afford it, can be treated like a tax, without actually saying it is a tax. He said it looks like a tax, walks like a tax and quacks like a tax. But it is only in the latter part of the opinion, after that considerable setup, that he calls the penalty "a tax" -- though he seems to prefer the term "shared responsibility payment."

A typical penalty for someone who can afford health insurance but refuses to buy it could be 2.5 percent of income, collected by the Internal Revenue Service. The administration says the penalty might affect about 1 percent of the adult public.

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The political repercussions of the ruling and its reference to a tax have been confusing but fun to watch.

The White House and Democrats were delighted that the Affordable Care Act survived Supreme Court scrutiny, but sensing a political trap, said quickly Roberts had it all wrong: The mandate penalty is not a tax.


Some Republicans said it was so a tax. Senate Minority Leader Mitch McConnell, R., Ky., appearing on "Fox News Sunday," said the law amounts to a "middle class tax increase."

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But other Republicans were more conflicted.

Republican National Committee Chairman Reince Priebus said on CNN he agreed with Obama's likely opponent, Mitt Romney, that Roberts erred in holding the mandate penalty constitutional under Congress' power to tax. To argue otherwise would leave Romney open to a charge of raising taxes with his own healthcare law and penalty when he was governor of Massachusetts.

Priebus tried to have it both ways, saying despite his own opinion, "The Supreme Court has stated that Obamacare is a tax, and so since they have ruled that it's a tax, it is a tax."

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Romney himself reversed his position in an interview with CBS News, now saying that the mandate is a tax on the federal level because the Supreme Court said so but it remains a penalty on the state level.

The ABC News blog said in election season "attack ads -- despite top Republicans' on-the-record statements to the contrary -- party groups will call it a tax."


The court's four conservative dissenters, ironically, agreed with the White House that the mandate penalty is not a tax, even though they wanted to overturn the law.

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Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito said in their dissent the Supreme Court has "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."

Citing a 1922 precedent, the dissenters said, "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. ...

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

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So what did Roberts actually say?

"The text of a statute can sometimes have more than one possible meaning," the chief justice said in the majority opinion. "To take a familiar example, a law that reads 'no vehicles in the park' might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so. Justice [Joseph] Story said that 180 years ago: 'No court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the Constitution.' ... Justice [Oliver Wendell] Holmes made the same point a century later: '[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the act.' ...


"The most straightforward reading of the mandate is that it commands individuals to purchase insurance," Roberts added, but the Commerce Clause does not give Congress that power. "Under our precedent, it is therefore necessary to ask whether the government's alternative reading of the statute -- that it only imposes a tax on those without insurance -- is a reasonable one."

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If "the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax," Roberts said.

"The question is not whether that is the most natural interpretation of the mandate, but only whether it is a 'fairly possible' one," the chief justice said, citing a 1932 precedent. "As we have explained, 'every reasonable construction' must be resorted to, in order to save a statute from unconstitutionality" [citing an 1895 precedent]. The government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution. Granting the act the full measure of deference owed to federal statutes, it can be so read. ... The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects."


Roberts concludes: "The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

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In a seeming contradiction, Roberts said the challenge by 26 states to the individual mandate was not barred by the Anti-Injunction Act. That act prohibits state challenges to a tax that has yet to be imposed. The individual mandate, of course, does not go into effect until 2014.

"The Anti-Injunction Act applies to suits 'for the purpose of restraining the assessment or collection of any tax.' ... Congress, however, chose to describe the '[s]hared responsibility payment' imposed on those who forgo health insurance not as a 'tax,' but as a 'penalty,'" Roberts said. "There is no immediate reason to think that a statute applying to 'any tax' would apply to a 'penalty.'"

If Congress meant the Anti-Injunction Act to apply to the individual mandate, it should have said so, Roberts said. "The Anti-Injunction Act and the Affordable Care Act ....are creatures of Congress' own creation. How they relate to each other is up to Congress."

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In other words, the penalty for failing to buy insurance is a tax when it comes to upholding the statute, but it is not strictly a tax when it comes to the Anti-Injunction Act's ban on challenges. You can almost see the liberals choking as they signed on to this reasoning.

In the wake of the Supreme Court healthcare decision, CBS News reported that after the high court heard argument in March, Roberts was ready to join the four other conservatives to strike down the individual mandate -- as many had predicted.

However, Roberts changed his mind and joined the liberals, then rebuffed Kennedy, who tried for a month to bring him back to the conservative fold, the broadcaster reported. This stance angered the conservatives, the report said.

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The inner workings of the court are not normally a public matter, CBS said, but "word of Roberts' unusual shift has spread widely within the court, and is known among law clerks, chambers' aides and secretaries."

The report contended Roberts pays attention to media coverage, and "is sensitive to how the court is perceived by the public. There were countless news articles in May warning of damage to the court -- and to Roberts' reputation -- if the court were to strike down the mandate."


Internal deliberations sometimes make it into history books written by a justice. But such a revelation immediately after a historic decision such as the healthcare ruling, if true, would be unprecedented.

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