The Taxing Power, the Affordable Care Act, and the Limits of Constitutional Compromise

This brief essay responds to recent court decisions and scholarly commentary questioning the constitutionality of the Affordable Care Act. Criticism has focused in particular on the provision imposing a $695 penalty on those who fail to purchase qualifying health insurance. I argue that, contrary to the courts and the commentators, this provision is valid as an exercise of Congress\u27 power to lay and collect taxes. Although much has been made of Congress\u27 use of the word penalty rather than tax, the Supreme Court has held since 1866 that Congress can invoke the tax power in litigation without using that term in the challenged statute. I also reject any normative arguments for rejecting that venerable rule as unpersuasive. In any event, the relevant section refers to the penalty it imposes as a tax 45 times. More substantively, I argue that efforts to claim that the section would fall afoul of constitutional limits on direct taxes over-read those sections of the Constitution. Limits on direct taxes were the product of a compromise over slavery, and have no other obvious deep meaning. While we must honor the bargain that resulted in their inclusion in the Constitution, honor can be paid with a narrow reading that allows Congress, not courts, to make tax policy