Over at Scotusblog, I present the legal rules of NFIB v. Sebelius, as they might appear in a bar review outline, or in a student study aid for a Constitutional Law I class.

In NFIB v. Sebelius, Chief Justice Roberts imagined a hypothetical federal tax on windows, in order to bolster his point that the Court should treat the individual mandate as a “tax,” even though the Obamacare statute calls it a “penalty.”

Suppose Congress enacted a statute providing that every taxpayer who owns a house without energy efficient windows must pay $50 to the IRS. The amount due is adjusted based on factors such as taxable income and joint filing status, and is paid along with the taxpayer’s income tax return. Those whose income is below the filing threshold need not pay. The required payment is not called a “tax,”a “penalty,” or anything else. No one would doubt that this law imposed a tax, and was within Congress’s power to tax. That conclusion should not change simply because Congress used the word “penalty” to describe the payment. Interpreting such a law to be a tax would hardly “[i]mpos[e] a tax through judicial legislation.” Post, at 25. Rather, it would give practical effect to the Legislature’s enactment.

The above language is a plausible argument for the Chief Justice’s tax/penalty analysis. But by discussing a window tax, the Roberts opinion provides one more reminder why the individual mandate, if it is a tax, is a direct tax, not an indirect tax. Direct taxes must be apportioned by state population. Art. I, sect. 9, cl. 4. If the individual mandate is a direct tax, then it is unconstitutional, because it is not apportioned by state population.

Pursuant to the 16th Amendment, direct taxes on income need not be apportioned, but neither the individual mandate nor the hypothetical window tax are taxes on income. Constitutionally, “income” subject to the federal income tax must be  ”undeniable accessions to wealth.” Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955). A decision not to buy overpriced insurance from Congress’s Big Insurance pets, like the decision not to buy a particular type of window, is not an “accession to wealth.” The decision provides no additional income to the person.

So let’s accept Chief Justice Roberts’ theory that a window tax and the individual mandate are analytically comparable. On July 9, 1798, Congress enacted a direct tax statute, to pay for national defense preparations against France. “An Act to provide for the valuation of lands and dwelling-houses, and the enumeration of slaves, within the United States. On July 14, Congress passed the “Direct Tax Act,” to provide for collection of the July 9 taxes. Pursuant to the Direct Tax Act, federal assessors were to examine houses to assess them for purposes of the direct tax. In addition, the Direct Tax Act ordered the assessors make records of the number and sizes of windows in each house. The window data were to be gathered so that Congress could, in the future, decide to impose a direct tax on windows. Paul Douglas Newman, Fries’s Rebellion: The Enduring Struggle for the American Revolution 76-77 (2004).

It seems there was no dispute that a window tax was a direct tax. A fortiori, a tax on not having certain types of windows would be also be a direct tax. This is one more piece of evidence that Chief Justice Roberts was wrong in stating that the individual mandate “tax” is not a direct tax. Much more extensive discussion of the direct/indirect tax issue (but not of window taxes) can be found in Rob Natelson’s 27 minute podcast on the subject, for iVoices.org.

This aired Friday night, just a day after the SCOTUS decision dropped.

McCulloch v. Maryland had a very good day at the Supreme Court yesterday, with NFIB relying on and applying McCulloch‘s rules for when an enactment violates the Necessary and Proper Clause. What happened after the McCulloch decision also shows the next steps in battle over the individual mandate, as I suggest in an essay this morning for National Review Online.

In refusing to hold the Second Bank of the United States unconstitutional, the McCulloch Court gave Congress broad latitude in Congress’s own evaluation of whether the Bank was “necessary” in a constitutional sense. Relying on and quoting McCulloch, President Andrew Jackson made his own judgment of constitutional necessity when he vetoed the recharter of the Bank in 1832. After a titanic political struggle, the Bank was gone, and a new term created by Jackson, “equal protection,” had become part of what the American People were coming to believe the Constitution was supposed to mean.

President Jackson dealt the Bank a fatal blow by withdrawing federal deposits from the Bank, and moving them to state banks. President Romney can follow Jackson’s lead on his first day in office, instructing the Acting Secretary of Health and Human Services to use the waiver powers in the ACA statute to issue waivers to everyone for the individual mandate. Because the individual mandate is (supposedly) a tax, it can then be repealed through the budget reconciliation process, which cannot be filibustered.

I predict that the individual mandate will never mandate anyone. Yet the mandate will be long remembered as one of the most consequential laws enacted by a Congress. The result of the “bank battle” was that even though a central bank was judicially permissible, central banking was politically toxic for the rest of the century. The “mandate battle” may have the same effect in deterring any future thoughts of congressionally-imposed mandates. (Putting aside the obvious exception for mandates that have a solid basis in the constitutional text, such as jury service.)

The enactment of the mandate has also significantly increased the probability that the next Supreme Court appointments will be made by a President and confirmed by a Senate which denounces the mandate as unconstitutional, and that the new Justices will be the kind who are inclined to vigorously enforce the many strong constitutional limits on congressional over-reaching which are articulated in NFIB v. Sebelius.

I would have preferred that the mandate had met its end yesterday morning, but the fact that the mandate will have to be finished off by the People in November and their elected officials in January may lead to even better long-term results for advocates of a constitutionally limited federal government.

Absolutely not. Rob Natelson explains why in this 27 minute podcast from iVoices.org.

My article yesterday for Scotusblog discussed the tremendous importance of the Court’s 7-2 use of the non-coercion rule to limit Spending Clause violations of State sovereignty and independence. The rule has been around ever since Steward Machine Company v. Davis (1937), but NFIB v. Sebelius is the first decision by any federal court to find that a conditional congressional grant violates the rule.

The folks who think that the “evolving Constitution” completed its evolution in 1937-42, and that everything the Court did during those years must be applied today with the broadest possible reading, should be especially pleased with the NFIB Court’s vigorous enforcement of a very important New Deal precedent.

My essay argues that the application of the non-coercion rule, as well as the  application of the doctrine of incidental powers for the Necessary and Proper Clause, are among the many elements of the Roberts opinion whose significance approaches that of some of the most important opinions by Chief Justice Marshall.

Although we do not know Chief Justice Roberts’ motives, I suggestion a comparison of NFIB to Marbury v. Madison: adroitly escaping from a partisan assault on the Court itself, the opinion moves constitutional law very far in the opposite of the direction favored by partisan assaulters–and does so in a way that leaves the partisan assaulters unable to use the case in their attacks on the Court.

Hey everyone. I know today’s Supreme Court ObamaCare decision is a lot to stomach right now, but I wanted to share with you our Constitutional Law scholar Dave Kopel’s statement on the issue. It should soften the blow considerably.

The Court’s decision against the Medicaid mandate means that Colorado has the right to choose whether or not to drastically expand state spending on Medicaid; Congress cannot coerce Coloradans to do so. The Medicaid mandate decision stops Congress from misusing of its Spending power to violate the 10th Amendment rights of the States; and it is the first time since 1936 that the Court has enforced significant constitutional limits on the Spending power.

The Medicaid mandate would have required Colorado to provide Medicaid to able-bodied childless adults. Simply put, this mandate would have put Colorado on a short path to insolvency.

The Independence Institute is gratified that the Court agreed with both of our amicus briefs, on the Medicaid mandate and on the Necessary and Proper Clause. On the Medicaid mandate, the Court strongly affirmed the fundamental constitutional principle, detailed in our brief, that the States are separate and independent sovereigns. The decision is in line with the Court’s record over the last two decades years in protecting state sovereignty. The Independence Institute has a long record of advocacy in this field; for example, in 1997, II Research Director Dave Kopel and Colorado Attorney General Gale Norton (herself a former Senior Fellow at II), co-authored an amicus brief for eight States in Printz v. United States. There, a 5-4 majority of the Court held that Congress could not order state and local law enforcement officers to carry out federal background checks on handgun buyers.

Today’s decision on the Medicaid mandate was 7-2, with Justices Breyer and Kagan joining the majority. This is one sign of how the Independence Institute’s long-term work is paying off.

The Court also agreed with our amicus brief on the Necessary and Proper Clause. As the research of our Senior Fellow Rob Natelson has explained, the Necessary and Proper Clause confers no additional powers on Congress. The Clause simply restates the general principle that Congress can exercise powers which are merely “incidental” to Congress’s enumerated powers. For example, since the Constitution gives Congress to power to establish the rules of bankruptcy, Congress can enact laws against bankruptcy fraud. The Court’s adoption the originalist interpretation developed by Natelson is the most important decision on the Necessary and Proper Clause since McCulloch v. Maryland in 1819.

Of course we were disappointed that the Supreme Court upheld the individual mandate under a different theory–not that the mandate is a “Necessary and Proper” regulation of interstate commerce, but instead that the mandate is merely a tax.

While the socialists are celebrating the individual mandate that they love and that most Americans loathe, let’s consider the bottom line, according to Lyle Deniston, the most-esteemed and most senior Supreme Court journalist in the United States: “The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress’s authority to pass social welfare laws. Using the tax code — especially in the current political environment — to promote social welfare is going to be a very chancy proposition.”

There are more legal challenges coming to other parts of Obamacare. The political challenges are going to continue too, and the Independence Institute is going to remain at the forefront–in the courts, and in the court of public opinion–fighting for the day when there will be no more Obamacare, and for the day when all Americans will truly enjoy patient protection and affordable care.

That’s the title of a new article by Gary Lawson and me, in Boston University’s American Journal of Law and Medicine, in a symposium issue on the PPACA. Except that unlike Alice, the PPACA neither becomes a Queen, nor wakes up to return to reality. Written before the oral argument, the article provides an overview of some of the main constitutional and linguistic topics at play in the PPACA cases.

Held at Denver University, Sturm College of Law, on April 11. Debaters were University of Colorado Prof. Scott Moss and me. Moderator is DU Prof. Ann Scales. WMV, via ftp.

President Obama today fired his opening salvo in an unprecedented attack on the Constitution of the United States. Regarding the impending Supreme Court ruling on the health control law, the President said, “Ultimately, I’m confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.”

His factual claims are false. His principle is a direct assault on the Constitution’s creation of an independent judicial branch as a check on constitutional violations by the other two branches.

It is certainly not “unprecedented” for the Court to overturn a law passed by “a democratically elected Congress.” The Court has done so 165 times, as of 2010. (See p. 201 of this Congressional Research Service report.)

President Obama can call legislation enacted by a vote of 219 to 212 a “strong” majority if he wishes. But there is nothing in the Constitution suggesting that a bill which garners the votes of 50.3% of the House of Representatives has such a “strong” majority that it therefore becomes exempt from judicial review. To the contrary, almost all of the 165 federal statutes which the Court has ruled unconstitutional had much larger majorities, most of them attracted votes from both Democrats and Republicans, and some of them were enacted nearly unanimously.

That the Supreme Court would declare as unconstitutional congressional “laws” which illegally violated the Constitution was one of the benefits of the Constitution, which the Constitution’s advocates used to help convince the People to ratify the Constitution. In Federalist 78, Alexander Hamilton explained why unconstitutional actions of Congress are not real laws, and why the judiciary has a duty to say so:

There is no position which depends on clearer principles, than that every act of a delegated authority, contrary to the tenor of the commission under which it is exercised, is void. No legislative act, therefore, contrary to the Constitution, can be valid. To deny this, would be to affirm, that the deputy is greater than his principal; that the servant is above his master; that the representatives of the people are superior to the people themselves; that men acting by virtue of powers, may do not only what their powers do not authorize, but what they forbid. . . .

Nor does this conclusion by any means suppose a superiority of the judicial to the legislative power. It only supposes that the power of the people is superior to both; and that where the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former. They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental.

Because Hamilton was the foremost “big government” advocate of his time, it is especially notable that he was a leading advocate for judicial review of whether any part of the federal government had exceeded its delegated powers.

Well before Marbury v. Madison, the Supreme Court recognized that the People had given the Court the inescapable duty of reviewing the constitutionality of statutes which came before the Court. The Court fulfilled this duty in cases such as Hylton v. U.S. (1796) (Is congressional tax on carriages a direct tax, and therefore illegal because it is not apportioned according to state population?); and Calder v. Bull (1798) (Is Connecticut change in inheritance laws an ex post facto law?). The Court found that the particular statutes in question did not violate the Constitution. (The ex post facto clause applies only to criminal laws; the carriage tax was an indirect tax, not a direct tax.) However, the Court’s authority to judge the statutes’ constitutionality was not disputed.

It would not be unfair to charge President Obama with hypocrisy given his strong complaints when the Court did not strike down the federal ban on partial birth abortions, and given his approval of the Supreme Court decision (Boumediene v. Bush) striking down a congressional statute restricting habeas corpus rights of Guantanamo detainees. (For the record, I think that the federal abortion ban should have been declared void as because it was not within Congress’s interstate commerce power, and that Boumediene was probably decided correctly, although I have not studied the issue sufficiently to have a solid opinion.) The federal ban on abortion, and the federal restriction on habeas corpus were each passed with more than a “strong” 50.3% majority of a democratically elected Congress.

As a politician complaining that a Supreme Court which should strike down laws he doesn’t like, while simultaneously asserting that a judicial decision against a law he does like is improperly “activist,” President Obama is no more hypocritical than many other Presidents. But in asserting that the actions of a “strong” majority of Congress are unreviewable, President Obama’s word are truly unprecedented. Certainly no President in the last 150 years has claimed asserted that a “strong” majority of Congress can exempt a statute from judicial review. President Lincoln’s First Inaugural criticized the Dred Scott majority for using a case between two private litigants for its over-reaching into a major national question, but Lincoln affirmed that the Court can, and should, provide a binding resolution to disputes between the parties before the Court. And in 2012, the government of the United States is one of the parties before the Court. (And the government is before the Court in part because the government filed a petition for a writ of certiorari to ask the Court to use its discretion to decide the case.)

Alone among the Presidents, Thomas Jefferson appears as a strong opponent of judicial review per se. Notably, he did not propose that Congress be the final judge of its own powers, especially when Congress intruded on matters which the Constitution had reserved to the States. Rather, Jefferson argued that in such a dispute the matter should be resolved by a Convention of the States, and the States would be make the final decision. Given that 28 States have already appeared as parties in court arguing that the individual mandate is unconstitutional, we can make a good guess about what a Convention would decide about the constitutionality of the health control law.

President Obama, however, wants Obamacare to be reviewable by no-one: not by the Supreme Court, not by the States.  You can find professors and partisans who have argued for such lawlessness, but for a President to do so is unprecedented.

The People gave Congress the enumerated power “To regulate Commerce . . . among the several States.” According to the Obama administration, this delegation of power also includes the power to compel commerce. Opponents contend that the power to regulate commerce does not include the far greater power to compel commerce, and that the individual mandate is therefore an ultra vires act by a deputy (Congress) in violation of the grant of power from the principal (the People). Seventy-two percent of the public, including a majority of Democrats, agrees that the mandate is unconstitutional. Few acts of Congress have ever had such sustained opposition of a supermajority of the American public.

President Obama today has considerably raised the stakes in Sebelius v. Florida. At issue now is not just the issue of whether Congress can commandeer the People and compel them to purchase the products of a particular oligopoly. At issue is whether the Court will bow to a President who denies they very legitimacy of judicial review of congressional statutes–or at least those that statutes which garnered the “strong” majority of 219 out of 435 Representatives.