Wednesday, October 20, 2010

Bring A Gun To School But You Better Have Insurance


God made the angels to show Him splendor, as He made animals for innocence and plants for their simplicity. But Man He made to serve Him wittily, in the tangle of his mind.

The material for my posts comes mostly from scanning the original source documents in RIA's Checkpoint tax research service.  It is a habit I developed long before I started blogging.  My main focus is looking for things that might be of some relevance to my client base.  I could not, however, pass something up called Thomas More Law Center v. Obama.  I had a brief delusion that I might get ahead of the crowd, but there is already a lot of commentary out there on it.

The case is a request for an injunction against the implementation of the part of the Health Care Reform Act that calls for a tax on people who don't buy health insurance.  The tax is scheduled to go in effect in 2014.  Clearly we are dealing with a group of people who care about principles.  How can you get excited about a tax that doesn't go into effect for a couple of years?  A lot can happen between now and then.  I guess the name of the organization clues you in that they care about principles.

The decision goes into a lot on whether they have standing.  It seems that all the worrying they are doing about the extra money they have to pay in 2014 was enough to give them standing.  So they got into the merits of the case.  Basically, it is about Congress having the power to force every to buy insurance.  The power comes from the right under the Constitution to regulate interstate commerce.  The Thomas More guys think that that is a bit of stretch.

The crux of plaintiffs' argument is that the federal government has never attempted to regulate inactivity, or a person's mere existence within our Nation's boundaries, under the auspices of the Commerce Clause. It is plaintiffs' position that if the Act is found constitutional, the Commerce Clause would provide Congress with the authority to regulate every aspect of our lives, including our choice to refrain from acting.

The court notes that in analyzing whether Congress has the power to regulate something under the Commerce Clause, their role is a modest one :

The court need not itself determine whether the regulated activities, “taken in the aggregate, substantially affect interstate commerce in fact, but only whether a “rational basis” exists for so concluding.”

I translate that to "We don't have to agree with you as long as we don't think you're crazy for thinking it."

They note that the Supreme Court  has placed some limits on the scope of the Commerce Clause.  Notably :

Far from permitting the Commerce Clause to provide Congress with unlimited power to regulate, the Supreme Court has, in fact, placed limits on its reach. The Court was asked to review Congress's power to enact the Gun-Free School Zone Act of 1990 which criminalized possession of a gun within a statutorily defined school zone. United States v. Lopez, 514 U.S. 549 (1995). The government argued that possession of a firearm in a school zone may result in violent crime, which can be expected to affect the national economy in several ways. First, the costs of violent crime are substantial, and via insurance those costs are spread throughout the population. Second, violent crime reduces the willingness of individuals to travel to areas that are perceived to be unsafe. Finally, the presence of guns in schools threatens the educational process, which will result in a less productive citizenry. The government concluded that these adverse effects on the nation's economic well-being gave Congress the power to pass the Gun-Free School Zone Act under the Commerce Clause. The Lopez Court held that Congress could not “pile inference upon inference” to find a link between the regulated activity and interstate commerce.

The health care mandate apparently does not require a similar stretch

There is a rational basis to conclude that, in the aggregate, decisions to forego insurance coverage in preference to attempting to pay for health care out of pocket drive up the cost of insurance. The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers. The decision whether to purchase insurance or to attempt to pay for health care out of pocket, is plainly economic. These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance. These are the economic effects addressed by Congress in enacting the Act and the minimum coverage provision.

The main reason for venturing to the very edge of this blog's field was for the literary/pop culture quiz opportunity afforded by this case. Whoever, can identify the leading quotation gets to claim the invaluable prize of specifying a future topic ?  It happens that it is one of my favorite quotations.  I expect this to be so easy that I was thinking about excluding Xavier graduates from the competition, but they can go for it too.

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