03/13/2018

Can ‘Texas V. United States’ Set Us Free From Obamacare?

David Catron, American Spectator

The lawsuit filed by 20 states has far more merit than is generally believed.

Ignore everything you have been told by the “news” media about Texas v. United States, the lawsuit recently filed by 20 states challenging the constitutionality of Obamacare. The Fourth Estate, in its all but official role as the public relations department of the Democratic Party, has generally downplayed the suit as yet another futile attempt by fanatical Republicans bent on destroying former President Obama’s “legacy.” Following their usual playbook for reporting constitutional challenges to the “Affordable Care Act” the media briefly sneered about its merits and then, to paraphrase David Burge, “covered the story with a pillow.”

It is nonetheless an important case and it’s useful to review the basis on which the plaintiffs actually base their case against the mandate: In 2012, a majority of the Supreme Court’s justices — including Chief Justice Roberts — rejected the government’s claim that Congress could impose the individual mandate pursuant to the Commerce Clause of the Constitution. Yet Roberts held that the mandate was stillconstitutional because its penalty was a tax collected by the IRS to raise revenue. The plaintiffs argue that this “saving construction” evaporated when Congress reduced the penalty to zero last year. Their complaint puts it as follows:

The Patient Protection and Affordable Care Act… as recently amended, forces an unconstitutional and irrational regime onto the States and their citizens. Because this recent amendment renders legally impossible the Supreme Court’s prior saving construction of the Affordable Care Act’s core provision — the individual mandate — the Court should hold that the ACA is unlawful and enjoin its operation.

In other words, because Congress has no authority to impose the individual mandate pursuant to the Commerce Clause, and it can’t be justified as a revenue-raising device (since enactment of the Tax Cuts and Jobs Act of 2017), the mandate must be struck down. But why should the entire “reform” law also be struck down? Virtually all statutes contain a “severability” clause essentially stating that, if any of its provisions are found to be legally invalid, the remaining provisions stay in force. The “Affordable Care Act” has no severability clause. 

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Thanks to "bracket creep," the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

 

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