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2012 Primary, Health Law, SCOTUS, Taxes, Treason, True Talking Points

Prof. Paul Moreno: A Short History of Congress’s Power to Tax

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The case against Roberts’ preposterous ruling just keeps building.

Law Professor Paul Moreno:

The Supreme Court has long distinguished the regulatory from the taxing power.

In 1935, Secretary of Labor Frances Perkins was fretting about finding a constitutional basis for the Social Security Act. Supreme Court Justice Harlan Fiske Stone advised her, “The taxing power, my dear, the taxing power. You can do anything under the taxing power.”

Last week, in his ObamaCare opinion, NFIB v. Sebelius, Chief Justice John Roberts gave Congress the same advice—just enact regulatory legislation and tack on a financial penalty, as in failure to comply with the individual insurance mandate. So how did the power to tax under the Constitution become unbounded?

The first enumerated power that the Constitution grants to Congress is the “power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States.” The text indicates that the taxing power is not plenary, but can be used only for defined ends and objects—since a comma, not a semicolon, separated the clauses on means (taxes) and ends (debts, defense, welfare).

This punctuation was no small matter. In 1798, Pennsylvania Rep. Albert Gallatin said that fellow Pennsylvania Rep. Gouverneur Morris, chairman of the Committee on Style at the Constitutional Convention, had smuggled in the semicolon in order to make Congress’s taxing power limitless, but that the alert Roger Sherman had the comma restored. The altered punctuation, Gallatin said, would have turned “words [that] had originally been inserted in the Constitution as a limitation to the power of levying taxes” into “a distinct power.” Thirty years later, Virginia Rep. Mark Alexander accused Secretary of State John Quincy Adams of doing the same thing after Congress instructed the administration to print copies of the Constitution.

The punctuation debate simply reinforced James Madison’s point in Federalist No. 41 that Congress could tax and spend only for those objects enumerated, primarily in Article I, Section 8.

Congress enacted very few taxes up to the end of the Civil War, and none that was a pretext for regulating things that the Constitution gave it no power to regulate. True, the purpose of tariffs was to protect domestic industry from foreign competition, not raise revenue. But the Constitution grants Congress a plenary power to regulate commerce with other nations.

Congress also enacted a tax to destroy state bank notes in 1866, but this could be seen as a “necessary and proper” means to stop the states from usurping Congress’s monetary or currency power. It was upheld in Veazie Bank v. Fenno (1869).

The first unabashed use of the taxing power for regulatory purposes came when Congress enacted a tax on “oleomargarine” in 1886. Dairy farmers tried to drive this cheaper butter substitute from the market but could only get Congress to adopt a mild tax, based on the claim that margarine was often artificially colored and fraudulently sold as butter. President Grover Cleveland reluctantly signed the bill, saying that if he were convinced the revenue aspect was simply a pretext “to destroy . . . one industry of our people for the protection and benefit of another,” he would have vetoed it.

Congress imposed another tax on margarine in 1902, which the Supreme Court upheld (U.S. v. McCray, 1904). Three justices dissented, but without writing an opinion.

Then, in 1914, Congress imposed taxes on druggists’ sales of opiates as a way to regulate their use. Five years later, in U.S. v. Doremus , the Supreme Court upheld the levy under Congress’s express power to impose excise taxes.

Then, in 1922, the court rejected Congress’s attempt to prohibit child labor by imposing a tax on companies that employed children. An earlier attempt to accomplish this, by prohibiting the interstate shipment of goods made by child labor, was struck down as unconstitutional—since it was understood since the earliest days of the republic that Congress had the power to regulate commerce but not manufacturing. “A Court must be blind not to see that the so-called tax is imposed to stop the employment of children within the age limits prescribed,” Chief Justice William Howard Taft wrote in Bailey v. Drexel Furniture Co. “Its prohibitory and regulatory effect and purpose are palpable.” Even liberal justices Oliver Wendell Holmes and Louis D. Brandeis concurred in Taft’s opinion.

Things came to a head in the New Deal, when Congress imposed a tax on food and fiber processors and used those tax dollars to provide benefits to farmers. Though in U.S. v. Butler (1936) the court adopted a more expansive view of the taxing power—allowing Congress to tax and spend for the “general welfare” beyond the powers specifically enumerated in the Constitution—it still held the ends had to be “general” and not transfer payments from one group to another. After President Franklin D. Roosevelt threatened to “pack” the Supreme Court in 1937, it accepted such transfer payments in Mulford v. Smith (1939), so long as the taxes were paid into the general treasury and not earmarked for farmers.

And now, in 2012, Justice Roberts has confirmed that there are no limits to regulatory taxation as long as the revenue is deposited in the U.S. Treasury.

Are there any other limits? Article I, Section 2 says that “direct taxes shall be apportioned among the states” according to population. This is repeated in Article I, Section 9, which says that “no capitation, or other direct tax, shall be laid,” unless apportioned.

The Supreme Court struck down income taxes in 1895 (Pollock v. Farmers’ Loan & Trust Co.), on the ground that they were “direct” taxes but not apportioned by population. Apportioning an income tax would defeat the purpose of the relatively poorer Southern and Western states, who wanted the relatively richer states of the Northeast to pay the bulk of the tax. The 16th Amendment gave Congress the power to tax incomes without apportionment.

Other direct taxes should presumably have to be apportioned according to the Constitution. Justice Roberts quickly dismissed the notion that the individual mandate penalty-tax is not a direct tax “under this Court’s precedents.” To any sentient adult, it looks like a “capitation” or head tax, imposed upon individuals directly. Unfortunately, having plenty of other reasons to object to ObamaCare, the four dissenting justices in NFIB v. Sebelius did not explore this point.

Some conservatives have cheered that part of Justice Roberts’s decision that limits Congress’s Commerce Clause power. But an unlimited taxing power is equally dangerous to constitutional government.

Mr. Moreno is a professor of history at Hillsdale College and the author of “The American State from the Civil War to the New Deal,”

2012 Primary, Health Law, Lies, Obama, Treason, True Talking Points

Mark Steyn: A lie makes Obamacare legal

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Mark Steyn:

Three months ago, I quoted George Jonas on the 30th anniversary of Canada’s ghastly “Charter of Rights and Freedoms”: “There seems to be an inverse relationship between written instruments of freedom, such as a Charter, and freedom itself,” wrote Jonas. “It’s as if freedom were too fragile to be put into words: If you write down your rights and freedoms, you lose them.”

For longer than one might have expected, the U.S. Constitution was a happy exception to that general rule – until, that is, the contortions required to reconcile a republic of limited government with the ambitions of statism rendered U.S. constitutionalism increasingly absurd. As I also wrote three months ago (yes, yes, don’t worry, there’s a couple of sentences of new material in amongst all the I-told-you-so stuff), “The United States is the only Western nation in which our rulers invoke the Constitution for the purpose of overriding it – or, at any rate, torturing its language beyond repair.”

Thus, the Supreme Court’s Obamacare decision. No one could seriously argue that the Framers’ vision of the Constitution intended to provide philosophical license for a national government (“federal” hardly seems le mot juste) whose treasury could fine you for declining to make provision for a chest infection that meets the approval of the Commissar of Ailments. Yet on Thursday, Chief Justice John Roberts did just that. And conservatives are supposed to be encouraged that he did so by appeal to the Constitution’s taxing authority rather than by a massive expansion of the Commerce Clause. Indeed, several respected commentators portrayed the Chief Justice’s majority vote as a finely calibrated act of constitutional seemliness.

Great. That and $4.95 will get you a decaf macchiato in the Supreme Court snack bar. There’s nothing constitutionally seemly about a court decision that says this law is only legal because the people’s representatives flat-out lied to the people when they passed it. Throughout the Obamacare debates, Democrats explicitly denied it was a massive tax hike: “You reject that it’s a tax increase?” George Stephanopoulos demanded to know on ABC. “I absolutely reject that notion,” replied the President. Yet “that notion” is the only one that would fly at the Supreme Court. The jurists found the individual mandate constitutional by declining to recognize it as a mandate at all. For Roberts’ defenders on the right, this is apparently a daring rout of Big Government: Like Nelson contemplating the Danish fleet at the Battle of Copenhagen, the Chief Justice held the telescope to his blind eye and declared, “I see no ships.”

If it looks like a duck, quacks like a duck, but a handful of judges rule that it’s a rare breed of elk, then all’s well. The Chief Justice, on the other hand, looks, quacks and walks like the Queen in Alice In Wonderland: “Sentence first – verdict afterwards.” The Obama administration sentences you to a $695 fine, and a couple of years later the queens of the Supreme Court explain what it is you’re guilty of. A. V. Dicey’s famous antipathy to written constitutions and preference for what he called (in a then-largely unfamiliar coinage) the “rule of law” has never looked better.

Instead, constitutionalists argue that Chief Justice Roberts has won a Nelson-like victory over the ever-expanding Commerce Clause. Big deal – for is his new, approved, enhanced taxing power not equally expandable? And, in attempting to pass off a confiscatory penalty as a legitimate tax, Roberts inflicts damage on the most basic legal principles.

Bingo on that last line. To read the rest of Mark Steyn’s excellent column click HERE.

Gangsta Govt

Supremes: Police GPS tracking without warrant is unconstitutional.

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The court hit this one out of the park. While I see Scalia’s point of nuance I agree with Alito that it also covered privacy because the penumbra of the law certainly cast a shadow on the FBI’s violation.

Jess Bravin at The Wall Street Journal:

WASHINGTON—The Supreme Court ruled Monday that police violated the Constitution when they attached a Global Positioning System tracker to a suspect’s vehicle without a valid search warrant, voting unanimously in one of the first major cases to test privacy rights in the digital era.

The decision offered a glimpse of how the court may address the flood of privacy cases expected in coming years over issues such as cellphones, email and online documents. But the justices split 5-4 over the reasoning, suggesting that differences remain over how to apply age-old principles prohibiting “unreasonable searches.”

The minority pushed for a more sweeping declaration that installing the GPS tracker not only trespassed on private property but violated the suspect’s “reasonable expectation of privacy” by monitoring his movements for a month. The majority said it wasn’t necessary to go that far, because the act of putting the tracker on the car invaded the suspect’s property in the same way that a home search would.

Justice Antonin Scalia, writing for the majority, said that as conceived in the 18th century, the Fourth Amendment’s protection of “persons, houses, papers, and effects, against unreasonable searches and seizures” would extend to private property such as an automobile.

“The Government physically occupied private property for the purpose of obtaining information. We have no doubt that such a physical intrusion would have been considered a ‘search’ within the meaning of the Fourth Amendment when it was adopted,” Justice Scalia wrote, joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Sonia Sotomayor.

Advocates for privacy said that despite the differences, the court’s unanimity on the outcome sent a strong message.

“This is a signal event in Fourth Amendment history,” said Walter Dellinger, a former acting solicitor general who represented the defendant, Antoine Jones.

The government said Federal Bureau of Investigation agents use GPS tracking devices in thousands of investigations each year. It argued that attaching the tiny tracking device to a car’s undercarriage was too trivial a violation of property rights to matter, and that no one who drove in public streets could expect his movements to go unmonitored. Police were free to employ the tactic for any reason without showing probable cause to a magistrate and getting a search warrant, the government said.

The justices seemed troubled by that position at arguments in November, where the government acknowledged it would also allow attaching such trackers to the justices’ own cars without obtaining a warrant.

Emphasizing the Fourth Amendment’s “close connection to property,” Justice Scalia wrote that even a small trespass, if committed in “an attempt to find something or to obtain information,” constituted a “search” under the Fourth Amendment.

In a surprising departure from the majority, Justice Samuel Alito, a former prosecutor usually known for his law-and-order views, split from fellow conservatives to argue that the search violated an individual’s “reasonable expectation of privacy.”

The court has used that test since 1967, when it held that warrants were required before police could wiretap a call made from a public telephone booth because “the Fourth Amendment protects people, not places.”

Limiting Fourth Amendment protections to trespassing property as understood in 1791 “is unwise” and “highly artificial,” Justice Alito wrote in a concurring opinion, joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan. “It is almost impossible to think of late-18th-century situations” analogous to placing a GPS tracker on a car, Justice Alito wrote, unless one imagined “a gigantic coach, a very tiny constable, or both.”

With such rapidly advancing technology, the Scalia approach left open “particularly vexing problems,” Justice Alito wrote, particularly when police don’t have to physically touch a vehicle to conduct surveillance. He mentioned automatic toll-collection systems and smartphones that continuously track their own location as examples.

Justice Alito’s concurring opinion suggested that the GPS case had provoked a robust debate within the court over the extent to which the 1967 case, Katz v. U.S., remained good law.

Justice Scalia declined to apply the 1967 standard to this case, but emphasized that the broader approach remained in force.

Justice Scalia wrote that even surveillance without physical trespass may be “an unconstitutional invasion of privacy”—but, he added, there was no need to speculate on such problems until a specific case presented them to the court.

Read more HERE.