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The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise


Brian D. Galle


Boston College Law School

April 10, 2011

Yale Law Journal Online, Vol. 121, p. 407, 2011
Boston College Law School Legal Studies Research Paper No. 217

Abstract:     
This brief essay responds to recent court decisions and scholarly commentary questioning the constitutionality of the Affordable Care Act. Criticism has focused in particular on the provision imposing a $695 penalty on those who fail to purchase qualifying health insurance.

I argue that, contrary to the courts and the commentators, this provision is valid as an exercise of Congress' power to lay and collect taxes. Although much has been made of Congress' use of the word "penalty" rather than tax, the Supreme Court has held since 1866 that Congress can invoke the tax power in litigation without using that term in the challenged statute. I also reject any normative arguments for rejecting that venerable rule as unpersuasive. In any event, the relevant section refers to the penalty it imposes as a "tax" 45 times.

More substantively, I argue that efforts to claim that the section would fall afoul of constitutional limits on "direct" taxes over-read those sections of the Constitution. Limits on direct taxes were the product of a compromise over slavery, and have no other obvious deep meaning. While we must honor the bargain that resulted in their inclusion in the Constitution, honor can be paid with a narrow reading that allows Congress, not courts, to make tax policy.

Number of Pages in PDF File: 14

Keywords: affordable care act, individual mandate, health care reform, direct tax, income tax, health insurance, federalism, clear statement rules

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Date posted: January 11, 2011 ; Last revised: April 13, 2011

Suggested Citation

Galle, Brian D., The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise (April 10, 2011). Yale Law Journal Online, Vol. 121, p. 407, 2011; Boston College Law School Legal Studies Research Paper No. 217. Available at SSRN: http://ssrn.com/abstract=1737907

Contact Information

Brian D. Galle (Contact Author)
Boston College Law School ( email )
885 Centre Street
Newton, MA 02459-1163
United States
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