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Friday, June 29, 2012

Is Taxing Authority the New Elastic Clause?

The Commerce Clause has long been referred to as the "elastic clause" because Congress and the Courts have stretched it to cover about anything the government wants to do. Yesterday's decision from the Supreme Court on ObamaCare continues a recent trend of placing some restrictions on the Commerce Clause, and held that Congress cannot regulate economic non-activity (i.e., the government can't force you to engage in commerce). However, the Court then decided that although the government can't force you to engage in commerce, it can coerce you to do so through its taxing authority.

I noted yesterday the dangerous precedent that this sets.  Amidst the overall praise for Justice Robert's opinion, there are a couple dissenting voices that have concerns similar to mine. Joe Kristan writes:
Maybe the most depressing aspect of the decision is the way it seems to endorse using the tax law as the Swiss Army Knife of public policy. Things that Congress can’t enact any other way are now possible if they can somehow be crammed into the tax law. The tax code is already groaning under its load of responsibilities for industrial policy, health policy, welfare policy and housing policy, for starters. The IRS Commissioner is now sort of a super cabinet member with a portfolio that dwarfs most of the “real” cabinet departments. Of course, the IRS is ill-suited to this role, resulting in poor policy administration and poor tax administration. Thanks, Justice Roberts!
(Emphasis in original; h/t Instapundit).

And from the Tax Prof Blog:
The idea has gained currency that the Taxing Clause in the Constitution gives Congress the power to do anything, or almost anything, that would be funded by taxation. Most recently, that argument has been advanced in connection with the litigation about the individual mandate in the Obamacare legislation — by, among others, legal philosopher Ronald Dworkin. If the penalty for failure to acquire suitable insurance will be a tax, then, it is argued, the requirement to acquire insurance, the mandate, will itself be a valid exercise of the taxing power. If that’s right, it certainly isn’t obviously so. Since almost everything the national government does is funded through taxation, that understanding would lead to a conception of congressional power that is effectively unlimited, and the Taxing Clause would trump almost all other grants of congressional power in Article I, section 8.
(Italics added; h/t Instapundit).

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