This morning the Supreme Court heard the first of what will be three days of oral argument concerning Obamacare. Today’s argument dealt solely with the issue of whether the Court has jurisdiction to consider the case at this time because the penalty for failure to have minimum coverage is, in fact a tax, and under the Anti-Injunction Act, suits contesting taxes can only be brought after the tax has to be paid.
Based upon the questions from the Court, it appears that the Court will decide that it can hear the merits of the case now. There are two approaches the Court could take. First, they could find that the penalty is not a tax at all. Or, they could decide that even if it is a tax and subject to the Anti-Injunction Act, the federal government can waive that defense, as it has done, and thus the matter can proceed.
A few questions from the bench “caught my ear”, all of them occurring during the argument presented by the Solicitor General.
JUSTICE ALITO: General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax.
Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?
GENERAL VERRILLI: No, Justice Alito… [See page 31]
In discussing the penalty for failure to have minimum coverage, the Solicitor General stated that if you are exempt from paying the penalty, then you are exempt from the minimum coverage provisions. That may seem obvious, but the section requiring minimum coverage lists certain groups of people who are exempt from that requirement. The section that enacts the penalty also lists certain groups who are exempt from the penalty, but, the groups exempted in these two sections are different. In other words, according to the Solicitor General, as long as you are exempt from the penalty, you are not violating the law for failure to have minimum coverage.
Justice Roberts then interrupted and said,
Suppose it makes it easy for the government to drop the other shoe in the future, right? You have been under the law subject to this mandate all along. You have been exempt from the penalty, so all they have to do is take away the penalty. [See page 48]
But, the morning’s moment of levity was brought to us by Justice Bryer. The Solicitor General would occasionally refer to the penalty as a tax. So Justice Bryer interrupted and asked,
Why do you keep saying tax?
To which the Solicitor General responded,
If they pay the tax penalty, they’re in compliance with the law. [See page 49]
I am certainly not being critical of the Solicitor General here. Anyone who can stand up before the Supreme Court has nothing but my deepest admiration.
If anyone is interested, you can go here and get a link to all of the Briefs filed in the Supreme Court on this Anti- Injunction Act issue.