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Taxation and regulation under the health care act

The following contribution to our post-decision symposium on the health care cases is written by Richard A. Epstein. Richard is the inaugural Laurence A. Tisch Professor of Law at NYU School of Law. He has served as the Peter and Kirstin Bedford Senior Fellow at the Hoover Institution since 2000. Richard is also the James Parker Hall Distinguished Service Professor of Law Emeritus and a senior lecturer at the University of Chicago. He is presently at work on a book Classical Liberal Constitutionalism.

Chief Justice Roberts’ decision that sustains the individual mandate under the taxing power of the United States is filled with twists and turns that requires some words of protest.  In the section of his opinion that deals with the Commerce Power, the Chief Justice accepts the view that Congress cannot regulate individuals unless and until they engage in some form of economic activity. He therefore accepts in full the arguments against the expanded reading of the Commerce Clause that were made by conservative commentators.  He did so, as is his habit, without stopping a moment to analyze the enormous expansion in federal power that was ratified in Wickard v. Filburn, which authorized Congress to regulate under the Commerce Clause of the amount of wheat that a farmer could produce for home consumption. Big government, we shall have, but not that big, after all.

But when it comes to the taxing power all bets are off.  Here the key statement that he makes is this:  “it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.” With all respect, the point is little short of absurd. The earlier portion of the Chief Justice’s opinion noted the huge expansion in federal power that could arise if the government were permitted to regulate various forms of inactivity.  What possible argument then could be put forward to say that the same risks do not apply to the expansion of the taxing authority to those same forms of inactivity, in ways that it has never been exercised before. The two examples that the Chief Justice gives are the tax on buying gasoline or earning income. Both of those are obvious activities that have long been regarded as acceptable bases for taxation. But not buying health insurance is not an activity.  I am not aware of any tax imposed on individuals for not buying gasoline and not earning income, or not taking a bath or not working in a home office. To allow this to stand as a tax is to accept the same kind of absurdity that was rejected in connection with the commerce power.  Intellectually shabby, to say the least.

Recommended Citation: Richard Epstein, Taxation and regulation under the health care act, SCOTUSblog (Jun. 28, 2012, 12:05 PM),