Direct tax & insurance mandate

[jackdavinci]

In the SCOTUS hearings on the health care act the judge asked a question about the mandate being similar to a tax, and the response was that even if you treat it like a tax, it would be a direct tax, which is unconstitutional.

I took this to mean that you are allowed to tax income or property, but you can’t directly tax a person.

But I tried to find a reference to the actual text in the constitution, and failed. Wiki makes it seem that a direct tax has some other meaning having to do with apportioning related to state populations, which was nullified by the 16th amendment.

I can’t find a reference to the sense of the term that would make sense in the context the lawyer was using it.

Can anyone clarify this?

[UltraVires]

@Constitution

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

@16th Amendment

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration

Wikipedia has a good snippet on the meaning of a “direct tax”: Direct tax - Wikipedia

The argument is that a tax for simply existing is a direct tax in violation of the Constitution.

[UltraVires]

Oh and:

Article I, Section 2, Clause 3:
Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…

So, the argument goes, any health care plan like this would have to be based on population numbers instead of health care needs.

[dracoi]

And I would also add that the 16th amendment does not nullify the ban on direct taxes. It specifically permits one kind of direct tax - an income tax. Other direct taxes are still subject to the original rules. One might argue that Obamacare would have been on firmer ground if the penalty was x% of income rather than a flat $x.

[OldGuy]

@dracoi

And I would also add that the 16th amendment does not nullify the ban on direct taxes. It specifically permits one kind of direct tax - an income tax. Other direct taxes are still subject to the original rules. One might argue that Obamacare would have been on firmer ground if the penalty was x% of income rather than a flat $x.

No. It reads that direct taxes specifically can be done if proportioned to the number of residents. I don’t know if this means you have to tax the state based on population rather than taxing each person directly though.

[UltraVires]

@OldGuy

No. It reads that direct taxes specifically can be done if proportioned to the number of residents. I don’t know if this means you have to tax the state based on population rather than taxing each person directly though.

Right, so you couldn’t do it like Obamacare where only people who file an income tax return pays x% of $Y. You would have to assess it so that it accounted for every man, woman, and child in an equal way regardless of the income level of the person.

[Richard_Parker]

@jtgain

Right, so you couldn’t do it like Obamacare where only people who file an income tax return pays x% of $Y. You would have to assess it so that it accounted for every man, woman, and child in an equal way regardless of the income level of the person.

Sure you can. You just tax everyone $1,000 a year (or whatever) and then offer a deduction for people that have insurance. The same way the government now “mandates” that you have kids.

[UltraVires]

@Richard_Parker

Sure you can. You just tax everyone $1,000 a year (or whatever) and then offer a deduction for people that have insurance. The same way the government now “mandates” that you have kids.

Correct. But assuming the petitioner’s argument is correct, even if the current health plan passes the commerce clause test, it fails as a direct tax as it is currently set up.