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Alex Glashausser

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The Switch in Tax That Saved the Affordable Care Act

Posted: 07/02/2012 1:43 pm

Lying in bed is one thing. Lying in court is another. As lawyers know full well, context affects meaning. In an opinion for the federal court of appeals in New York, Judge Guido Calabresi once expressed that truth memorably: "'You should have passed, dummy,' means something entirely different at a bridge table from what it means on Superbowl Sunday."

Chief Justice John Roberts relied on such lexical flexibility last week in upholding the constitutionality of the Patient Protection and Affordable Care Act. An older statute, the Anti-Injunction Act, bars suits to stop "the assessment or collection of any tax." If the penalty for failure to buy health insurance had been considered a "tax," the constitutional challenge thus would have had to wait until payment was actually extracted. In Justice Roberts's assessment, though, the penalty did not qualify as a "tax" in that statutory context, and so the case could continue. On the merits of the challenge, however, he determined that the penalty was in fact a "tax" as that word is used in the Constitution and therefore was an appropriate exercise of the legislature's power to "lay and collect Taxes."

No wonder Justice Ruth Bader Ginsburg recently described the Supreme Court's just-ended term as "more than usually taxing." Still, it was hardly the first time the Court had found the meaning of a single word to vary across sources. For example, federal courts have jurisdiction over cases "arising" under federal law, and the Supreme Court has deemed many cases to qualify in the constitutional sense of that word but not in the statutory sense. Even if a rose is a rose is a rose, arising is not always arising. As Chief Justice John Marshall explained almost two centuries ago when upholding Congress's exercise of an implied power to charter a national bank, "we must never forget, that it is a constitution we are expounding."

Justice Roberts's colleagues on the right derided him for appearing to talk out of both sides of his mouth in explaining how a tax is not a tax. Such "verbal wizardry," they charged, was fit for "sophists." But surely we expect our Supreme Court Justices to be sophisticated enough to appreciate the importance of context in interpretation. Though Roberts's hair-splitting understandably raised superficial skepticism, he cut it just right.

Congress wrote the Anti-Injunction Act and had every right to exempt the health-care penalty from its operation, if it so chose. By calling the consequence of not buying health insurance a "penalty" and refusing the label of "tax" -- which it gave to other parts of the same statute -- Congress did indeed communicate that the relevant provision was not subject to the Anti-Injunction Act. In contrast, Congress did not write the Constitution and cannot rewrite it. Even if Congress calls flag-burning "conduct," it still counts as "speech" protected by the Constitution. And even if Congress describes the payment of money to the I.R.S. as a "penalty," as far as the Constitution is concerned that is a "tax."

The Chief Justice has not always appreciated such nuances. Five years ago, in an opinion striking down a school assignment plan designed to achieve racial balance, he wrote a sentence shocking for its smugness as well as its bluntness: "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race."

Lying in wait on the Supreme Court's docket for the fall term is another major case about racial preferences. At issue is the constitutionality of the University of Texas's practice of weighing race in its admissions process in an effort to secure a critical mass of minority students. Justice Roberts's willingness to do the tax two-step suggests that he might embrace a more sophisticated (or, to some, simply sophistic) analysis than he did in the earlier school case. If he can accept that a tax is not a tax, then he should have the sense to acknowledge that not all senses of discrimination are equal. Invidious majoritarianism is one thing; affirmative action is another.

Seventy-five years ago, when President Franklin Roosevelt, frustrated by the Supreme Court's resistance to his New Deal initiatives, threatened to expand the membership of the Court to fifteen, Justice Owen Roberts surprisingly cast a decisive vote to uphold a minimum-wage law, thus executing the famous "switch in time that saved nine." This time, with a crucial piece of President Obama's domestic agenda at stake, the current Justice Roberts was surprisingly cast as the hero by effecting a switch in tax to, as he wrote, "save the Act." In the upcoming race case, it will be the fate of affirmative action that lies in his hands. His decision about whether to save it will show where the truth about the Justice's sense of justice lies.

 
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