On Monday, as the Supreme Court began hearing oral arguments on the constitutionality of the health care individual mandate, the nine Justices had to answer a question of terminology that’s been debated since 2009: is “Obamacare” a “tax”?
At issue is an 1867 law called the Anti-Injunction Act, which prevents people from challenging the constitutionality of a tax before the tax has been collected – the imposition of a tax does not constitute standing to sue, but collection or payment of the tax does.
Most provisions of the health care reform law, including the individual mandate being contested in this case, don’t kick in until 2014 or later. The first tax returns that would reflect penalties as a result to the Affordable Care Act wouldn’t be filed until 2015.
If the Anti-Injunction Act applies to the penalties levied under “Obamacare,” then 2012 might be a little early for the Court to hear this case, and it would have to be dismissed before litigants even have a chance to get to the more substantial policy arguments scheduled for Tuesday.
This made the Obama administration and opponents of the Affordable Care Act strange bedfellows: they both want the Court to hear the case. That means that, at least for today, opponents of the health care law were rooting for it not to be considered a tax, despite less-nuanced conservative talking points to the contrary.
“The purpose of this lawsuit is to challenge a federal requirement to buy health insurance,” said Gregory Katsas, the attorney representing the state of Florida and others arguing that the individual mandate is unconstitutional. “That requirement itself is not a tax, and for that reason alone we think the Anti-Injunction Act doesn’t apply.”
Katsas described the penalty that an individual would incur for failing to purchase insurance as a “free-standing, non-tax legal duty.”
Solicitor General Donald Verrilli, representing the Obama administration, made a similar argument about the specific language used in the Affordable Care Act.
“They called it a penalty,” Verrilli told the Court. “They didn’t give any other textual instruction in the Affordable Care Act or the Internal Revenue Code that that penalty should be treated as a tax for Anti-Injunction Act purposes.”
The Supreme Court had appointed Robert Long, a third, outside lawyer to argue that the Anti-Injunction Act indeed applied to this case, and therefore would preclude the Court from hearing this particular challenge to the Affordable Care Act.
“The [Anti-Injunction] Act applies to essentially every tax penalty in the Internal Revenue Code,” said Long. “There is no reason to think that Congress made a special exception for the penalty” imposed by the Affordable Care Act, because the penalty “shall be assessed and collected in the same manner as taxes.”
It’s expected that Long’s arguments won’t dissuade the Court from hearing the case. The Justices will agree with the lawyers for the Obama administration and opponents of the Affordable Care Act, although the lawyer for the Obama administration will be shifting his position come Tuesday.
“General Verrilli, today you are arguing that the penalty is not a tax,” Justice Samuel Alito observed. “Tomorrow, you are going to be back and you will be arguing that the penalty is a tax.”
Alito was referring, with some sense of humor, to the fact that on Tuesday, Verrilli will argue that Congress has the authority to enact such a penalty under its taxing power, even though the penalty is not specifically a “tax.”
Confused? You’re not the only one. During an exchange with Justice Elena Kagan, Verrilli kept saying that that as long as a person without insurance pays “the tax,” then they are in compliance with federal law.
Justice Stephen Breyer asked Verrillii, “Why do you keep saying tax?” The audience laughed.
“If they pay the tax penalty,” Verrilli amended, then thanked Justice Breyer for the correction.