Is the Obamacare tax a direct tax requiring an apportionment

9/25/2013 | johnwk

[JOHN W K]

After reviewing the constitutionally authorized taxing powers granted to Congress and the limits placed upon each specific kind of tax, a question arises as to which specific taxing power granted to Congress can be pointed to and levied as Obamacare’s "shared responsibility payment" and be within the limits of the specific tax pointed to.

Roberts never answered this question but merely indicated the individual mandate tax levied upon those failing to have federally approved health insurance is to be collected along with income taxes.

And so, a question arises as to which constitutionally authorized taxing power granted to Congress, when adhering to the constitutional limits placed upon it, can be pointed to and be levied as a "shared responsibility payment"?

We can immediately exclude imposts and duties as being the taxing power allowing the individual mandate tax because imposts and duties are taxes imposed on the import or export of goods.

And in reference to the power to lay and collect excise taxes, excise taxes can be levied upon the manufacture, sale, or consumption of goods, or upon licenses to pursue certain occupations or upon a privilege granted by government such as a corporate granted charter, and may also be levied upon a particular piece of property or is use. But I cannot imagine how this power of taxation may be used to levy the “shared responsibility payment”.

With reference to the power to lay and collect taxes on “incomes” without apportionment, this taxing power requires a realization of profits or gains which then becomes the subject of taxation. But the subject of taxation under the individual mandate is not a profit or gain, collectively called “income”. The subject matter being taxed is a failure to have federally approved health insurance which triggers the tax and obviously excludes this taxing power to be used to levy the shared responsibility payment.

But we still have Congress’ power to lay and collect direct taxes, but direct taxes by our Constitution, requires an apportioning among the States which Obamacare’s individual mandate tax fails to do.

When Roberts wrote that “The shared responsibility payment is thus not a direct tax that must be apportioned among the several States”, he totally ignored the historical characteristics which identify a direct tax as understood by our founders. In fact, the shared responsibility payment is characteristic of a direct tax! A review of Adam Smith, Wealth of Nations, a contemporary writing of the time which our Founders were familiar with, we find the following reference regarding a capitation tax as being a direct tax:

“Capitation taxes, so far as they are levied upon the lower ranks of people, are direct taxes upon the wages of labor.” Adam Smith, Wealth of Nations, id. at pg. 540.

The shared responsibility payment is in fact to be computed from the wages which working people earn, and thus takes the form of a direct tax as understood by our founders!

There seems to be a consistency among the founders comments that direct taxes are those assessed to the individual by government, while indirect taxes are costs added by government to things which individuals are free to acquired or reject. For example, Hamilton's brief in the Hylton carriage case which Roberts quoted says: 'The following are presumed to be the only direct taxes: Capitation or poll taxes, taxes on lands and buildings, general assessments, whether on the whole property of individuals, or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.'

Is it not a fact that the shared responsibly payment is proposed to be assessed from a working person’s annually earned wage, and not upon a thing which the individual is free to acquire or reject? And so, if Roberts was right and the individual mandate is an exercise of the taxing power, the question remains unanswered as to what tax authorizes Congress to enter a State and directly tax the people therein for not having federally approved health insurance?

JWK

If the people of the United States do not rise up and defend the constitution they have given their consent to, who is left to do so but the very people who it was designed to control and regulate?

[JOHN W K]

The 16th amendment basically overrode the apportionment clause:

cotton,

In Eisner v. Macomber 252 U.S. 189, 206 (1920), a case dealing with direct vs. indirect taxation the tax was struck down as being direct and not apportioned. The Court stated:

“[T]his amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes....This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts.”

A few years latter in another case dealing with direct vs. indirect taxation, in BROMLEY VS MCCAUGHN, 280 U.S. 124 (1929), the Court upheld to tax but emphatically stated “As the present tax is not apportioned, it is forbidden, if direct.”

And let us not forget that even Justice Roberts stated in the Obama case:

A tax on going without health insurance does not fall within any recognized category of direct tax. It is not a capitation. Capitations are taxes paid by every person, "without regard to property, profession, or any other circumstance." Hylton, supra, at 175 (opinion of Chase, J.) (emphasis altered). The whole point of the shared responsibility payment is that it is triggered by specific circumstances—earning a certain amount of income but not obtaining health insurance. The payment is also plainly not a tax on the ownership of land or personal property. The shared responsibility payment is thus not a direct tax that must be apportioned among the several States.

The truth is, Article 1, Section 9, Clause 4 has never been repealed and declares:

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

JWK

If, by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the boundary between the nation and the states of which it is composed, would have disappeared, and with it one of the bulwarks of private rights and private property. POLLOCK v. FARMERS' LOAN & TRUST CO., 157 U.S. 429 (1895)

[willyd]

So maybe it is time to have a 100% on Congress critters and Senators that don’t balance the budget each and every year.