The ObamaCare Tax on Your Existence

by John McClaughry

This prescient commentary by Ethan Allen Institute VP John McClaughry appeared on July 27, 2010

In a startling development last week, the Obama Justice Department, defending against a host of lawsuits to invalidate the ObamaCare law, declared that the law’s individual insurance mandate is not founded on the power of Congress to regulate interstate commerce. Surprise! It’s a new tax!

The reason obviously, was that trying to hang the ObamaCare coverage mandate on the interstate commerce clause looked more and more like a loser in court.

In 1942 the Federal commerce power reached its high water mark. In that year the Supreme Court informed Roscoe Filburn that he couldn’t grow his own wheat to fatten his own hogs on his own farm, without submitting to the New Deal wheat management program. Its argument was that if Roscoe hadn’t grown his own hog feed, he would have had to go into the marketplace and purchase feed. A million hog farmers growing their own feed would of course wreck the New Deal regulatory scheme, that depended on every wheat farmer submitting to Federal crop production controls. Too bad, Roscoe.

But note the difference between Roscoe’s case and the ObamaCare insurance mandate. The government regulation of the national wheat market was, by 1942, conceded to be a legitimate exercise of the commerce power. ObamaCare is something else.

ObamaCare mandates that by 2014 almost every American must prove to the IRS that he or she is enrolled in a government-approved health plan. Absent that proof, the IRS will hound the luckless citizen for a “penalty” of 2.5% of his or her income (by 2016), or $695 a year, whichever is greater.

In a 2008 debate with Hilary Clinton, Sen. Barack Obama scored points by strongly opposing this mandate policy, on the reasonable grounds that people without enough income to buy health insurance would be caught, fined, and still not have any health coverage. But that was then.

Unlike Roscoe, these uninsured Americans are not even arguably engaged in commerce. They aren’t in the health or insurance businesses. They aren’t creating anything of value to sell into a regulated market.

It’s not hard to see why a reasonable constitutional lawyer would conclude, as many have, that Congress cannot stretch the commerce power to regulate – and fine – people who merely exist.

So now – aha! – the Justice Department finds that the individual mandate rests upon the power of Congress to tax. This was no sudden stroke of legal genius. The House-passed version of ObamaCare – the one supported by Congressman Welch – contained the key Sec. 401: “Tax on Individuals Without Acceptable Health Care”. But that tax language wasn’t enacted. The Senate bill that replaced the House language relies on regulation of commerce (Sec. 1501).

But the individual mandate does not involve a tax increase! Who said so? President Barack Obama, who “absolutely rejects” that notion when pressed by George Stephanopoulos on ABC ‘s This Week last September. But that was then.

So the Obama Administration’s position now comes down to this: Congress has the power to tax you until you do any specific thing Congress thinks is good for you, or for the nation, or for the planet. If you’re one of the 18 million working uninsured, you must buy government-approved insurance or face the IRS Penalty Patrol at your doorstep. Not good.

There is growing concern about obesity, a major health risk factor. Under the Obama theory, Congress could levy a new tax on every excess unit of your Body Mass Index, until you prove to the Federal Obesity Regulation Bureau that you have, through diet, exercise and perhaps surgery, reduced your BMI to 25.

To be subject to the law, you wouldn’t have to be in the business of being obese – say, by working in a circus sideshow. You would just have to exist. That’s all it would take to trigger a new tax, that the IRS would make you pay until you complied with Washington’s dictates. And if you don‘t pay the IRS, you can end up in jail.

Make no mistake: whether by stretching the commerce power beyond all known bounds, or by levying new taxes on anything and anybody to validate regulations unsupported by any power found in the Constitution, ObamaCare is a mortal threat to our liberty – and to our constitutional republic.


John McClaughry is vice president of the Ethan Allen Institute (