Tag Archives: government

Tax vs Prohibition

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Paul Mirengoff had some remarks on some of the implications of the Supreme Court’s ruling on the Patient Protection and Affordable Care Act.  Chief Justice Roberts’ argument:

…the highly consequential debate between Chief Justice Roberts and Justice Kennedy over whether it is “fairly possible” to view the payment that must be made under Obamacare for not purchasing health insurance as a tax.  Roberts’ view that it reasonably can be considered a tax rests, at least on part, on the claim that there is no prohibition against not buying health insurance.  An individual can refuse to buy insurance, just as a basketball player can commit that last foul, though he or she will pay a price for the refusal.

Justice Kennedy’s argument:

Kennedy’s view is that the price one must pay for not purchasing insurance entails a prohibition.  He quotes the great jurist Chancellor Kent as follows: “If a statute inflicts a penalty for doing an act, the penalty implies a prohibition, and the thing is unlawful, though there be no prohibitory words in the statute.”

Mirengoff concludes

Kennedy’s view of this matter is more persuasive than the Chief Justice’s.  But remember, under rules of constitutional adjudication, Roberts’ view need not be the most persuasive one.  As Kennedy concedes, it must only be “fairly possible.”

And here is the danger of, as Mirengoff puts it, the squishiness of “fairly possible.”  Note that in this context, “fairly” has nothing to do with “fair,” as in a “fair coin.”  “Fairly” here means sort of reasonable, a measure of plausibility.  And that “sort of plausible” argument was allowed by Roberts to trump actual logic—and the facts of the matter that Congress had, in developing this law, explicitly removed tax language and replaced it in toto with penalty language.  Roberts abused even the squishiness of the fairly possible “doctrine” to find a tax in the law where none existed so that he could preserve a claim of constitutionality of the PPACA.

Indeed, Roberts moved himself over the line into judicial activism.  The judicially conservative thing is to strike a law that is unconstitutional, not to actively manufacture reasons for finding it constitutional.  That is judge-made law.

The Supreme Court and the Constitution

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Here’s another implication of Chief Justice John Roberts’ ruling on the Patient Protection and Affordable Care Act, courtesy of The Wall Street Journal.

According to Chief Justice Roberts, the penalty is merely a tax on not owning health insurance, no different from “buying gasoline or earning income,” and it thus complies with the Constitution. This a large loophole. The result is that Washington has unlimited power to impose new purchase mandates and the courts will find them constitutional if Congress calls them taxes, or even if it calls them something else and judges call them taxes.

Except that not buying a thing or a service is radically different from buying that thing or service.  This isn’t merely a matter of opposites: opposites are related to each other.  There is no relation between buying or not buying—the thing/service being bought is known; the thing/service not being bought cannot be known, and so the bought/not bought functions can have no relation to each other whatsoever.

Chief Justice Roberts writes that construing the Commerce Clause as the Obama Administration argued “would open a new and potentially vast domain to congressional authority…. The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding.” [emphasis in the original]

But then

Supreme Court precedents going back to the 1920s and 1930s define penalties and taxes as mutually exclusive and critically different.

With this stroke, Roberts has cancelled the effect of his understanding on the limit of the Commerce Clause’s ability to compel commerce; he has simply transferred the ability to compel commerce to the Taxing Clause.  Which also had no prior compulsion power.

Whether the Federal government may compel our behavior via Commerce or via Taxing, our government now can compel our behavior.

This is judicial activism at its worst.

The Racism of the Left

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MSNBC host and racial activist Reverend Al Sharpton in an interview with The Hill, as cited by Fox News:

I’m not saying that this is because Holder is black, and I’m not calling [Republicans] racists. I’m saying what they’re doing has a racial effect, and that’s what we’re going to talk about.

What the Reverend chooses to ignore is that only a racist would find “racial effects” in an affair that has nothing at all to do with race.

But there’s more: House Minority Leader Nancy Pelosi said last week that Republicans’ demand for a full accounting of the crimes of “Fast and Furious,” and Republicans’ objections to Attorney General Eric Holder’s stonewalling and potentially outright lying during the investigation, is mere obfuscation of their real goal—to  keep minorities from voting and to keep Holder from interfering.

They’re going after Eric Holder because he is supporting measures to overturn these voter-suppression initiatives in the states.

A vast, right wing, racist conspiracy.

Holder himself has been actively interfering with states’ efforts to ensure that their voter rolls are populated only with eligible voters, and not also with the dearly departed, or with Mickey Mouse, or with a white Holder.  Or with illegal aliens.  Because keeping ineligible voters from voting is somehow racist.

At least one Federal judge isn’t buying it, though, and that’s to the good.  US District Judge Robert Hinkle, of the Northern District of Florida, has rejected Holder’s suit against Florida, which suit was an attempt to block that state from protecting the sanctity of an American’s—a Floridian’s—vote by removing ineligible voters, of whatever race or stripe, from the voting rolls.

Ruling that while federal laws (vis., the National Voter Registration Act of 1993) are designed to block states from removing eligible voters close to an election, they are not designed to block states from removing voters who were never eligible in the first place, Judge Hinkle denied Holder’s motion to enjoin Florida from purging ineligible voters from their voter rolls.

A Misunderstanding about (Government) Stimulus

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Dr Alan Blinder, in a recent op-ed in The Wall Street Journal, notes that

A debate now rages in Europe over whether fiscal austerity—that is, higher taxes and less spending—helps or hinders growth.  That’s progress of sorts.

He’s right as far as he goes, but then he goes on.

[A] similar debate rages here in the US—with the lone exception that our pro-austerity crowd abhors tax increases.

Here are the beginnings of Binder’s misunderstanding.  I don’t know of a pro-austerity crowd anywhere in the US, at least among Republicans and Tea Partiers.  These folks are plainly pro-growth, and that clearly demands less government spending—and lower taxes.  Contrary to Progressives’ beliefs, it isn’t the government’s money, and the government doesn’t need as much of it as it tries to claim from us in taxes.

…help state and local governments maintain their spending, which has now dropped 6.4% since its 2008 peak[.]

It doesn’t get any clearer than this.  Nor the Feds, nor the states, nor local governments need to “maintain their spending.”  All levels of government need to reduce spending and quit competing with the private sector for goods and services, quit buying for the private sector the goods and services it can—and should—buy for itself.  It’s through private sector economic activity that comes growth, and jobs, which fuel growth.  All government spending can do is substitute for private sector spending—at the expense of taking money out of the private sector to pay for that spending, either in taxes today or taxes tomorrow.

Many Democrats also want to build and repair more roads, bridges, tunnels and the like….  Most Republicans reject that idea, too….

This is just a cynical distortion of the Republicans’ position, and it’s disappointing to see in someone who’s supposed to be a reasonably objective academic.  The need to work on our physical infrastructure is  bipartisanly recognized.  What the Progressives’ programs do, though, and what the Republicans object to, is simply transfer funds to Progressive-favored state and local governments and to union allies.  Honest funding support, that will help—help, mind you, not cover entirely—with actual work, and which funding is itself covered by spending cuts elsewhere, will find Republican support.  Look, for instance, to the 20+ jobs bills the Republican House has passed and that are languishing in the Senate because Blinder’s Democrats won’t even permit them to be debated, much less come to a vote.

He does have some specific ideas:

  •  Budget policy. For openers, as I advocated in these pages last month, we need a two-pronged fiscal package.  In the near term, we need modest stimulus, focused tightly on creating jobs.  But that stimulus should be paired with a vastly larger dose of long-run deficit reduction—perhaps 10 to 20 times as large as the stimulus—over the 10-year budget window.

Economically, this can be done; it’s not even that hard. But if Republicans continue to reject even deals comprised of $10 of spending cuts for each $1 of tax increases, it’s hard to see how we get there politically.

I debunked this here.

  •  Private investment. Republicans are right that business investment is the key to growth. Fortunately, business investment has done very nicely, thank you, despite the sluggish economy—growing 8.4% over the past year and at an annual rate of 10.8% over the past two years.  (The corresponding growth rates for GDP were about 2%.)  So while there’s always room for improvement, business investment is not part of the problem.  The best thing policy can do for private investment is to get the overall economy growing faster.

Indeed.  And the best policy for achieving that is reduced government spending competition with the private sector, lower taxes, and reduced regulatory burden—which has exploded under the present administration.  The EPA’s rules are especially onerous, irrelevant to the economy, and job-destroying.  HHS’ regulations also attack private sector job growth, as well as such minor things as constitutionally protected religious freedom.

  •  Public investment. Unlike private investment, inadequate public investment is part of the problem.  America’s infrastructure needs are so huge, and so painfully obvious, that it’s mind-boggling we’re not investing more.  The U.S. government can now borrow for five years at about 0.75% and for 10 years at about 1.7%.  Both rates are far below expected inflation, making real interest rates sharply negative.  Yet legions of skilled construction workers remain unemployed while we drive our cars over pothole-laden roads and creaky bridges.  Does this make sense?

Public “investment” is, indeed, part of the problem.  “There’s a sale on! Let’s go buy!  Think how much we can save at these prices!”  Think how much more we can save, if we don’t buy at all.  The existence of a sale, whether it’s in a lower price for a good or a lower price for borrowing, is no excuse at all for spending—or borrowing.  Spending and borrowing must have a legitimate purpose, not merely be “cheap.”  All those nickels borrowed today add up to lots of dollars owed—and so taxed for—tomorrow.

Moreover, this administration poured nearly $1 trillion into stimulus—including no small part of infrastructure maintenance buildout and maintenance—in 2009, and it’s been pouring out more since, in the form of loan guarantees, among other routes, for “green” energy infrastructure, among other things.  What have we gotten for all that “investment?” Transfers to unions, transfers to states for their own payoffs, bankrupt “green” energy companies, but no actual infrastructure maintenance buildout or maintenance.  Does this make sense?

  •  Education. Everyone knows that the returns to education, while large, are long delayed.  That means we have no time to waste.  We should be doing a much better job of building a better educated, more productive work force for the future.  A Council on Foreign Relations task force co-chaired by former Secretary of State Condoleezza Rice and former New York City Schools Chancellor Joel Klein recently argued that better K-12 education is critical to American leadership in the world and therefore to our national security.

Indeed, again.  Government needs to stop driving up the cost of education by subsidizing it.  We as a society need to stop stigmatizing those who lack a college degree.  College is not for everyone.  Nor do those in the trades need a college degree; they need a decent VoTech source of education and training—the sort of thing we used to get in our high schools all those years ago, and that could be improved upon by our community colleges—many of which do fill this bill.

Why in the world are we still arguing about this?

Because the Democrats and their Do-Nothing Senate, and the President, are in the way.  If it’s Republican, it’s to be ignored.  It’s all Bush’s fault.  It’s racist.  Pick a Progressive excuse.

Which candidate does that remind you of?

In terms of not understanding the distinction between economic growth and government growth?  That’s pretty clear.

President Obama’s Obamacare Tax Increase on the Middle Class

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Straight from the horse’s mouth.  Chief Justice John Robert’s Majority Opinion includes this [emphasis added]:

The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause.  That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.  In this case, however, it is reasonable to con­strue what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance.  Such legislation is within Con­gress’s power to tax.

The whole opinion, and the two dissents, can be read here.