Here’s to What Unites the United States on the Fourth of July

In the timely update below, Kathy Spray explains the constitutional issues behind the U.S. Supreme Court’s recent decision upholding key provisions of the president’s controversial health care legislation. Predictably, some folks are hailing the decision, while others decry it as a travesty of justice. Odds are good not many in either camp have actually read it.

Perhaps the most interesting side note to the decision is the wealth of speculation surrounding why Chief Justice John Roberts defected from his more conservative colleagues and voted with the more liberal wing of the Court. In trying to answer the question, multiple commentators point to the Chief Justice’s oft-stated goal of restoring a greater sense of cohesiveness and solidarity to the Court and its decisions lest it be viewed as just another polarized, political branch of government. Given the historically tight-lipped traditions of the Court and its members, we will likely never know if this overarching goal motivated Chief Justice Robert’s decision. Regardless, the goal warrants our attention and consideration as we approach our great country’s 236th birthday.

In 1858, Senate candidate Abraham Lincoln lifted a famous passage from Scripture to remind us that a house divided against itself cannot stand. Seven bloody years later, in his second Inaugural Address, the soon to be martyred president urged “malice toward none; [and] charity for all” as he anticipated the long and painful reconstruction of a nation torn by a battle of brother versus brother, father versus son.

Wherever you stand on national health care, Romney versus Obama, Israel and Palestine, or any other issue important to our country, this Independence Day I encourage you to spend some time in discussion with a fellow American who sees it differently. You probably won’t change each other’s minds. But, hopefully, you will both come away from the conversation united in the conviction that our differences – and the freedom to pursue, espouse and protect them — continue to bind us as one Nation under God, indivisible, with liberty and justice for all.

Supreme Court Upholds Health Insurance Mandate as ‘Tax’
by Kathryn R. Spray, Attorney | July 3, 2012

The Supreme Court ruled this week on the question of whether the federal government may require individuals to purchase a minimum level of health insurance or pay a federal tax penalty. The appeal of President Barack Obama’s signature legislation, the “Patient Protection and Affordable Care Act” (“PPACA”), was brought by 26 states and several other interested groups. The challengers argued that “the individual mandate,” which will require citizens to purchase health insurance or pay a federal tax penalty starting in 2014, was unconstitutional. Specifically, the states charged that the mandate went beyond the limits of the “Commerce Clause” of the United States Constitution, under which power is given to the government to regulate business between the states.

With a 5-4 majority vote, the Supreme Court agreed that the individual mandate violated the Commerce Clause, but then found that it was nonetheless permissible under another Constitutional provision: the “Taxing and Spending Clause.” (The Taxing and Spending Clause of the Constitution gives the federal government broad power to tax its citizens.) The Supreme Court determined that the penalty for failing to purchase health insurance constituted a “tax” and should be upheld. Chief Justice Roberts, author of the majority opinion for the Court, noted that, “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

Under the PPACA the minimum tax penalty per person will be $95 in 2014, $325 in 2015, and $695 once the tax is fully implemented in 2016. After 2016, the minimum tax per person will rise
each year with inflation, but the penalty can never exceed the cost of the least expensive health care plans being offered through the PPACA. (For children 18 and under, the minimum per-person tax is half of that for adults.) Notably, Congress has precluded the IRS from using tax liens, property seizures or criminal prosecution, which are permissible with regard to certain other IRS tax violations, to collect PPACA tax penalties.

Starting in 2014, new tax credits will also be available to individuals, families and small businesses. Though the IRS is still in the process of issuing final guidance with regard to the tax provisions of the PPACA, it has provided a working list of PPACA notices for public review and comment at,,id=220809,00.html.

Follow Now You Know It as Wright Beamer keeps you up to speed on the continued evolution and (barring a repeal after the fall election) implementation of the PPACA.

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