Posts

Odds and ends

Two other articles caught my attention this week, neither of which warranted an entire post, but, both of which need your attention.

Odds:

GM is now seeking new help from more financial institutions to assist GM in obtaining loans for GM customers who want to purchase cars.  About 3 years ago, GM sold control of GMAC, it’s “in house” car loan business.  Now, GM has a problem.  About 40% of Americans are “subprime” borrowers, and if few banks will give car loans to those people, GM sells fewer cars.  Government Motors’ solution…find institutions that will give a car loan to “subprime” borrowers, i.e., people who probably can’t afford a car loan.  Haven’t we already been there and done that…with not the best of results?

Ends:

Remember the President’s promise…if you are making less than $200,000 per year you will not see your taxes increase?  Well, not exactly.

Of course, Social Security taxes and Medicare taxes (for everyone, regardless of income) have already increased, but, what about “income taxes”.  Apparently, they are not safe either.  On Tuesday, House Majority Leader Steny Hoyer (D. Md.) “suggested” that the deficit was so high that, maybe, the middle class would have to pay higher income taxes.

Gee, Mr. Hoyer, didn’t you think of that when you voted for TARP, Stimulus Part I, Stimulus part II, and, all of the things in the 2009 budget that Bush vetoed while he was in office?  Who the heck did you think would pay for all of that government spending?

Obamacare and the personal insurance mandate

Last November I did a post on the differing legal justifications advanced by the Democrats in support of the mandate that everyone must buy insurance or pay a penalty.  Steny Hoyer (D. Md.) insisted it was the power to tax, whereas Nancy Pelosi (D. Ca.) insisted it was the power to regulate interstate commerce.  And, as we now know, Congress decided to side with Ms. Pelosi by devoting 3 pages of the bill explaining that the mandate was constitutional based upon it’s interstate commerce powers.  At the time, I opined that although I didn’t agree with either position, I felt that the power to tax was the stronger argument.  But, Congress didn’t consult with me.

It now appears that they should have.

There is a marvelous piece in today’s Wall Street Journal written by Randy Barnett, a Constitutional law professor at Georgetown, that explains that Obamacare supporters are now having a change of heart.

On March 21, the same day the House approved the Senate version of the legislation, the staff of the Joint Committee on Taxation released a 157-page “technical explanation” of the bill. The word “commerce” appeared nowhere. Instead, the personal mandate is dubbed an “Excise Tax on Individuals Without Essential Health Benefits Coverage.”

But, as Professor Barnett points out,

This switch in constitutional theories is a tell: Defenders of the bill lack confidence in their commerce power theory. The switch also comes too late. When the mandate’s constitutionality comes up for review as part of the state attorneys general lawsuit, the Supreme Court will not consider the penalty enforcing the mandate to be a tax because, in the provision that actually defines and imposes the mandate and penalty, Congress did not call it a tax and did not treat it as a tax.

So why is this so significant, you ask?  Professor Barnett supplies the answer.

Never before has the [Supreme] Court looked behind Congress’s unconstitutional assertion of its commerce power to see if a measure could have been justified as a tax.

In other words, the Supreme Court doesn’t scour the Constitution looking for a clause that could make a  law constitutional.  The Justices look solely to what Congress has written.