Roberts Ruling On Obamacare Calls Into Question Definition Of Tax, Penalty

WASHINGTON -- And now we have cognitive dissonance on a profound scale.

Mitt Romney's campaign advisers on Thursday heralded the fact that the Supreme Court, though it upheld President Barack Obama's health care law, labeled it a tax.

"Frankly, to be able to tell you your taxes have been raised by this bill and you didn't know that, as opposed to trying to explain Congress's powers under the commerce clause, it's easier," a senior Romney adviser told The Huffington Post.

Even analysts at liberal economic think tanks have said that the Affordable Care Act amounted to a $525 billion tax increase.

But the actual text of the bill uses the word "penalty" -- not "tax." Even Obama, while the law was still being debated in Congress, insisted in a September 2009 interview with ABC's George Stephanopoulos that his health care overhaul was "absolutely not a tax increase."

The Romney campaign and Republican political operatives will certainly see this as a new political advantage heading into the fall elections.

Ironically, many conservative jurists and intellectuals now agree with Obama's argument, even as the White House sighs a breath of relief that Chief Justice John Roberts disagreed with the president's assessment from 2009.

The conservative revolt against Roberts' ruling has been led by four of Roberts' own colleagues on the court, who in their dissent wrote that the chief justice has taken "verbal wizardry too far, deep into the forbidden land of the sophists."

In their jointly written dissent, Justices Anthony Kennedy, Samuel Alito, Antonin Scalia, and Clarence Thomas wrote that Roberts not only ignored the plain language used in the legislation -- penalty instead of tax –- but also the basic definition of what a tax is.

"Our cases establish a clear line between a tax and a penalty: '[A] tax is an enforced contribution to provide for the support of government; a penalty . . . is an exaction imposed by statute as punishment for an unlawful act,'" wrote the dissenting justices, citing the 1996 United States v. Reorganized CF&I Fabricators of Utah, Inc. case, which itself quoted from the 1931 United States v. La Franca ruling.

"What kind of a tax is it?" Roger Pilon, vice president for legal affairs at the Cato Institute, said in a video released Friday by the Libertarian-leaning think tank. "It's not an income tax. It's not an excise, or an impost, or any of the other kinds of taxes that are recognized by the Constitution, and in particular by the taxing power."

Obama's own words from 2009 rejecting the tax label, foreshadowed the outcry from conservatives in the wake of the Roberts ruling.

"You can't just make up that language and decide that that's a tax increase," Obama told Stephanopoulos.

But that's exactly what the four dissenting justices, and many conservatives now, are angrily saying that Roberts has done.

"We cannot rewrite the statute to be what it is not," wrote Kennedy, Alito, Scalia and Thomas.

The Wall Street Journal editorial board on Friday morning was a clearinghouse for assaults against Roberts' logic and his ruling. They included a long portion from the dissenting opinion, as well as four other editorials and op-eds lambasting Roberts.

The WSJ editorial board wrote that Roberts' willingness to accept as a tax what was passed into law as a penalty had created "a large loophole" for big government advocates to drive through.

"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," the WSJ editorial board wrote. "Supreme Court precedents going back to the 1920s and 1930s define penalties and taxes as mutually exclusive and critically different."

Much of this back and forth over what is a tax and what is a penalty is politically driven. Obama denied that he was imposing a tax during the political debate over the Affordable Care Act. But then his own solicitor general argued before the Supreme Court that the law did include a tax, which was ultimately the ground that the law narrowly stood on to survive constitutional challenge.

And while many conservatives are angry with Roberts for calling the law a tax in the realm of legal thinking, when the law was in the political arena many conservatives called it the very same thing.

"I dont understand how some conseravtives [sic] are saying that the Supreme Court was wrong AND that Obama passed a massive tax," wrote South Carolina Republican consultant Wesley Donehue on Twitter Friday morning.

But much of the conservative argument also has to do with the impact down the road on the debate over the breadth of the federal government's power.

"This ruling essentially grants the federal government the right to legally tax our every breath. And tax they will," Sen. Rand Paul (R-Ky) wrote in a National Review op-ed.

National Review's Ramesh Ponnuru, in his regular column for Bloomberg, expressed unease about the way in which Roberts' ruling treated the meaning of words.

"The resulting law may be a better one than Congress wrote. It is not, however, the law that Congress wrote," Ponnuru wrote. "Roberts may think he has threaded a needle. He has avoided affirming an expansive reading of the Commerce Clause, which conservatives loathe, while refusing to give liberals the ammunition to call him a partisan for dismantling their cherished law. He acted cleverly. He also acted less like a judge than like a politician, and a slippery one."

And it is now Democrats who, having won the legal battle by virtue of the law being considered a tax, are arguing in the political sphere that it is no such thing.

"This is a penalty," said Massachusetts governor Deval Patrick, a Democrat, in a conference call with reporters Friday morning. Patrick said it was "bizarre" to call the ACA a "tax," despite the fact the Supreme Court had ruled it one just a day before.

To recap: conservative politicos and liberal jurists agree it's a tax, while conservative jurists and liberal politicos say it's not.

If the strict conservative definition of a tax is applied the same way to Obama's law and to the 2006 health care overhaul that Romney proposed when he was Massachusetts governor, it is Obamacare that has a penalty and Romney's original idea (not the bill that was eventually passed by the Democratic legislature and signed by Romney) that included a tax component.

Ultimately, both Obamacare and Romneycare ended up with a penalty for those who did not buy health insurance, which -- to go back to the legal definition of the word –- is a payment made as punishment for not doing something.

However, Romney, according to aides who helped him craft his Massachusetts health care overhaul, originally proposed a plan that required payment only from individuals who used health care, which is closer to a tax than a penalty. Those who didn't obtain health insurance would have been required to post a bond, which would serve as a deposit in the event they did use state health care. None of that money would actually be withdrawn, however, if the person did not use the state health care system.

Romney's original idea was more akin to "an enforced contribution to provide for the support of government" than it was to "an exaction imposed by statute as punishment for an unlawful act."

The Democratic-controlled legislature in Massachusetts, however, ultimately went with a penalty rather than a bond issuance, and Romney signed that bill into law.

Jonathan Gruber, an MIT professor who helped both Romney and Obama in crafting their health care overhauls, said in an e-mail Friday that Romney "mentioned posting a bond but it wasn't exactly a formal proposal."

"I never heard about him complaining about the way it was carried out," he said.

Political Reaction To Health Care Ruling