Constitutionality of government obliging you to make a purchase v. taxing for it

[Jacobtm]

''I'M NOT going to talk about whether a broccoli mandate could conceivably make sense (because of course it could!). I want to talk about the alleged distinction between mandating that individuals buy stuff and taxing individuals to buy them stuff. It seems to me that the federal government forces me to pay for interstate highways, national parks, my father's Medicare, aerial murder drones, and a great deal more, whether I want to or not. I cannot see the principled distinction between government (a) taking a dollar by force and then handing it to Raytheon and (b) forcing me to hand a dollar to Raytheon. Randy Barnett, a libertarian law professor at Georgetown and a leading figure in the fight against the constitutionality of the individual mandate, does see a distinction. Here's Ezra Klein of the Washington Post asking him about it:

    EK: Perhaps you can clarify a distinction that escapes me here. It’s understood to be constitutional for the government to tax me in order to pay for Medicare, which is a single-payer insurance program that I’ll get when I’m over 65. But it’s not okay for the government to say I have to self-insure on the private market before I’m 65.

    RB: There are several answers, but I’ll limit myself to two. First, there’s the text of the Constitution itself. The text of the Constitution itself gives Congress the power to levy taxes on people and on income. We can’t dispute that. It does not give Congress the power under its commerce power, at least not expressly, to make them do business with private companies.

    The second point I would make is that the duty to pay taxes is part of your duty to support the government in return for the protections the government gives you. What the government is claiming here is this power — and this ought to disturb people on the left — to make people do business with private companies when Congress thinks it’s convenient.

Let's take Mr Barnett's second point first. Suppose I sell a novel to a publisher. If the publisher cuts a check to my agent, and my agent cuts a check to me, did I really not do business with the publisher? Of course I did. The middle man is irrelevant to whether or not business has been done between the publisher and I. Likewise, if I cut a check to the government and the government cuts a check to Raytheon, I did business with Raytheon.

So then we're left with the first point: that there is an enumerated power to tax, but no explicit grant of power to make people do business with private companies. This does not strike me as a separate argument. Clearly, this turns on one's response to Mr Barnett's second point. If forcing me to hand a dollar to Raytheon and taking a dollar by force and handing it Raytheon are two materially equivalent ways of making me do business with Raytheon, and they are, then the undisputed power of Congress to tax and spend was a power to force me to do business with private companies all along.

One principled libertarian line on this question is that government has the power to tax only for the purpose of spending on the provision of those public goods, such as the common defence, which voluntary exchange on the free market cannot be relied on to provide. Having read a number of Mr Barnett's books, it's not clear to me that he thinks there are any such goods; his ideal political economy has a marked anarchist flavour. And that's why I suspect his attempt to enforce a distinction is strategic rather than principled. A ruling to the effect that government may not force citizens to do business with private entities could be useful to a libertarian legal activist precisely because there really is no sound distinction between mediated and unmediated transactions. Having used a spurious distinction to elicit a decision striking down government's power to make people buy things, the savvy libertarian legal eagle can turn around and attack the very same distinction in order to set limits on the government's current power to spend tax dollars on anything it likes.''

http://www.economist.com/blogs/democracyinamerica/2012/03/individual-mandate

[🐒Gods of Prosperity🔱🐲💸]

I think the distinction here is the government requiring you to pay for AND use/own a product whether or not you want it, vs. the government requiring you to help pay for a product for whoever wants the benefit of it.

[True Federalist (진정한 연방 주의자)]

The reason for making such a distinction does not reside in theories of individual liberty.  Indeed, many critics of a national healthcare mandate, such as Gov. Romney, will concede that the State governments have the power to mandate the purchase of health insurance, just as most States mandate the purchase of auto insurance, or many local governments require that you maintain the appearance of your property, etc.

Hence the mandate issue is at its root over whether we still have a Federal system of government in which there are certain things that the States can do which the national government cannot.

[🐒Gods of Prosperity🔱🐲💸]

The reason for making such a distinction does not reside in theories of individual liberty.  Indeed, many critics of a national healthcare mandate, such as Gov. Romney, will concede that the State governments have the power to mandate the purchase of health insurance, just as most States mandate the purchase of auto insurance, or many local governments require that you maintain the appearance of your property, etc.

Hence the mandate issue is at its root over whether we still have a Federal system of government in which there are certain things that the States can do which the national government cannot.

Romney and others like him do not have a problem with this that comes out of a concern for individual liberty, but then it's highly questionable whether he really objects to a national mandate in principle in the way that many conservatives and libertarians and even some liberals do.

[ag]

How would the government require you to actually use your medical insurance? You can always pay out of pocket, if you prefer, under any interpretation of the current law, couldn't you? The government only requires you to be eligible to use insurance - but that would be true even if it financed the national health insurance out of the general budget. 

[🐒Gods of Prosperity🔱🐲💸]

How would the government require you to actually use your medical insurance? You can always pay out of pocket, if you prefer, under any interpretation of the current law, couldn't you? The government only requires you to be eligible to use insurance - but that would be true even if it financed the national health insurance out of the general budget. 

Insurance is about taking what would be a payment for a service, and turning it into a payment for managing risk.  So, in that sense by owning it, it's used because it's acting as an insurance for potential needs.  The government or another third party paying for a service isn't really insurance in the same sense.
Really, what it comes down to is people have a certain amount of money that they can put toward their health or the health of those they care for, and the mandate requires that this money be put toward a qualified insurance program rather than other arrangements.  Not using an insurance that they have bought would only mean they are giving their money to a corporation that they may not want to support, and would have to come up with the money from elsewhere.

[Badger]

I think the distinction here is the government requiring you to pay for AND use/own a product whether or not you want it, vs. the government requiring you to help pay for a product for whoever wants the benefit of it.

Like national defense? Seems to me we all pay for it at the level 50% +1 vote in Congress and the President decide on whether we "want the benefit of it" or not. Other examples are equally applicable too.

[🐒Gods of Prosperity🔱🐲💸]

I think the distinction here is the government requiring you to pay for AND use/own a product whether or not you want it, vs. the government requiring you to help pay for a product for whoever wants the benefit of it.

Like national defense? Seems to me we all pay for it at the level 50% +1 vote in Congress and the President decide on whether we "want the benefit of it" or not. Other examples are equally applicable too.

national defense is not a product subscribed to individuals.

[Nym90]

Taxing you to pay for a government-run health care system would be much more of an inhibition on personal liberty than requiring you to purchase it from the private market, since at least in the latter case you have your choice of providers. So it makes no logical sense to me that the former is constitutional and the latter isn't; if the federal government has the power to tax, that to me implies that it has the power to do anything that is functionally equivalent to but less restrictive to personal liberty than a tax.

[True Federalist (진정한 연방 주의자)]

if the federal government has the power to tax, that to me implies that it has the power to do anything that is functionally equivalent to but less restrictive to personal liberty than a tax.

The Federal government does not have an unlimited authority to tax tho.  In particular, direct taxes^*, need to be apportioned in relation to the representation of each State in the House.  If an obligation to purchase something is considered a tax, then I would argue it is a direct tax and has to go through all the funky rules thereof, which clearly Obamacare does not.  (Indeed the clumsiness with which Federal direct taxes would be imposed is why they aren't.)

^* Direct taxes are those applied to the person or to property. Contrary to what most people think, income taxes were constitutional prior to the 16th Amendment, provided that they were taxes on wages or the like.  However taxing things such as rents or capital gains would be considered taxes on property and thus, direct taxes.

[CARLHAYDEN]

if the federal government has the power to tax, that to me implies that it has the power to do anything that is functionally equivalent to but less restrictive to personal liberty than a tax.

The Federal government does not have an unlimited authority to tax tho.  In particular, direct taxes^*, need to be apportioned in relation to the representation of each State in the House.  If an obligation to purchase something is considered a tax, then I would argue it is a direct tax and has to go through all the funky rules thereof, which clearly Obamacare does not.  (Indeed the clumsiness with which Federal direct taxes would be imposed is why they aren't.)

^* Direct taxes are those applied to the person or to property. Contrary to what most people think, income taxes were constitutional prior to the 16th Amendment, provided that they were taxes on wages or the like.  However taxing things such as rents or capital gains would be considered taxes on property and thus, direct taxes.

Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429 (1895), aff'd on reh'g, 158 U.S. 601 (1895), with a ruling of 5–4, was a landmark case in which the Supreme Court of the United States ruled that the unapportioned income taxes on interest, dividends and rents imposed by the Income Tax Act of 1894 were, in effect, direct taxes, and were unconstitutional because they violated the provision that direct taxes be apportioned.

http://en.wikipedia.org/wiki/Pollock_v._Farmers%27_Loan_%26_Trust_Co.

[True Federalist (진정한 연방 주의자)]

Thanks for the added details, CARL.