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Obamacare faces new legal challenge: Its 'tax' still violates the Constitution

The Supreme Court saved Obamacare by deeming the law's individual mandate a 'tax.' But in that case, the law violates the Constitution's Origination Clause, which says all tax bills must originate in the House, not the Senate. Letting the law stand sets a dangerous precedent.

By Timothy Sandefur / April 30, 2013

Senate Minority Leader Mitch McConnell (R) of Kentucky points to a 7-foot stack of “Obamacare” regulations during the 40th annual Conservative Political Action Conference (CPAC) in National Harbor, Md., March 15. Op-ed contributor Timothy Sandefur says 'courts should take care to enforce democratic controls' over Congress's taxing power' – as exercised under Obamacare.

Kevin Lamarque/Reuters/File


Sacremento, Calif.

With tax day and IRS forms fresh in their minds, most Americans might think the US tax system couldn’t get any more daunting.

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But next year, some new complexity kicks in.

One of the hotly debated features of the Patient Protection and Affordable Care Act (or “Obamacare”) takes effect in 2014. Under the law’s “individual mandate,” nearly everyone who isn’t covered by an employer will have to buy health insurance or pay a penalty. This penalty was officially labeled a “tax” by the Supreme Court, or at least by five of the justices, in its decision on Obamacare last June.

The Obama administration, however, never argued that the individual mandate is an exercise of Congress’s taxing authority. And as recently as October, in an interview with Rolling Stone magazine, President Obama avoided the “tax” justification, and still insisted that the individual mandate is a regulatory action authorized by the Commerce Clause.

Just what Americans need: more confusion and ambiguity in their tax law. 

By calling the mandate to buy insurance a “tax,” the court did more than trigger new debates about semantics. It created a potentially fatal constitutional glitch in the law.

Article I, Section 7 of the Constitution says that tax bills – “all bills for raising revenue” – must “originate in the House of Representatives.” The framers wrote this “Origination Clause” because they recognized the potential danger in the taxing power, and they wanted to keep it as close as possible to voters. So they entrusted it to members of the House, who are elected every two years and have smaller constituencies than senators, who represent whole states and serve staggered six-year terms.

But Obamacare didn’t follow the constitutional script. Instead of originating in the lower chamber, it started in the Senate, when Majority Leader Harry Reid took an old bill the House had passed that would have given veterans tax credits to buy homes, struck out all of that bill’s language, and inserted instead the confusing web of provisions that became the Affordable Care Act.


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