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Supreme Success?

While probably no one is very happy with the Supreme Court ruling on Obamacare, I’m perfectly happy with it, because my biggest problem was, in a way, struck down. Let me explain.

The individual mandate stands, but not because the government can mandate we buy stuff. The mandate stands because the court interpreted it as a tax, which Congress has the power to levy. Forgetting for the moment that congressional democrats went out of their way to not call it a tax. Most disappointing to democrats (and many republicans deep down inside) is the fact that the mandate is not justified using the commerce clause.

Everyone is painting this as an, admittedly small, victory for the Obama administration or for democrats, but I’m not so sure. I respect the Supreme Court finding that simply because you refuse to call something a tax doesn’t mean that it isn’t one, even if I disagree with that (if you want to call something a penalty or a fine, than that’s what it is), but think for a moment what this means, it’s now clear that a significant tax has been levied almost exclusively on the middle class. They were depending on the government having the power to mandate purchases under the commerce clause, and very insistent that this wasn’t a tax.

On the whole I think this is not good for Obama, but really I couldn’t foresee any ruling that would have been very beneficial to him, since the law is very, very unpopular. If it was upheld as they wanted it, it would energize conservatives. If it was struck down, it would disappoint liberals. If the court said that the government can’t mandate insurance, but can impose a discriminatory tax on those who fail to carry it, the Administration and Democrats in Congress have imposed a tax on the middle class. Personally I think the worst outcome for the Big O is that last one, which is what we have. Not that anyone predicted this possible result.

The commerce clause has been reined in with this ruling, boundaries set. I can only hope that this is a picture of things to come.

Afterthought: Let me just be clear what part of the mandate was “struck down”, because it was. The notion that the government can compel people to participate in any market is done and gone, the government cannot do so. What the government may do is what it does with other things, it may use the tax code to incentivize behavior, such as it does with cigarettes or with retirement accounts, it may not force anyone to buy anything though. Had the Supreme Court ruled that the commerce clause gave Congress the right to compel market participation, the story would be entirely different, they might criminalize lack of participation in a market.

It doesn’t appear that many ObamaCare supporters considered that if the power to order people to buy things was a power the government had, that the ridiculous examples of the government mandating broccoli or car purchases would be entirely valid. I shudder to think what sort of things that republicans might mandate people buy, just as much as I shudder to think what Democrats would. It’s also a little bit funny that this sort of using the tax code to provide incentives for people to buy something is just another version of corporate welfare that so many decry, it’s simply a matter of geography, what route does the money take? The government could force us to buy corn, or pay a tax, instead of taxing us then providing subsidies for corn production. Today was, if anything, not a win for Obama, or for Republicans, but for corporate welfare.

I’ll soon be doing a post, building off of this, on “moral (or immoral) taxation”.

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