A three-judge panel of the D.C. Circuit Court of Appeals ruled the U.S. Senate can launch tax bills even though the Constitution requires that funding measures begin in the U.S. House of Representatives.
The decision, which likely will be appealed to the U.S. Supreme Court, came in a challenge to the constitutionality of Obamacare, a tax-raising measure that began in the Senate.
The judges, in an opinion written by Judge Judith Rogers, reasoned that if the aim of Obamacare is to force people to buy health insurance, the billions of dollars in tax increases are incidental and, therefore, allowable.
The Pacific Legal Foundation brought the case, alleging the House bill that was removed and replaced with Obamacare by Senate Majority Leader Harry Reid had nothing to do with raising taxes, so the ultimate changeout in the U.S. Senate made the entire bill unconstitutional.
It is Article 1, Section 7 of the Constitution that requires all tax bills to start in the House.
PLF attorney Timothy Sandefur said he expects the case will end up in the Supreme Court.
“PLF’s challenge to Obamacare involves fundamental constitutional principles and protections for all taxpayers, and for everyone who is covered by the tax and regulatory burdens of Obamacare,” he said. “Americans may not be subjected to new taxes by the federal government if those taxes [don't] start in the House, the chamber closest to the people. That’s the principle underlying our lawsuit, and it’s so basic to our constitutional framework that the case ultimately deserves a judgment by the nation’s highest court.”
He said the decision was disappointing, because it created “a new and unprecedented distinction to exempt the Obamacare tax from the Constitution’s rules for enacting taxes.”
He said the judges “adopted a vague ‘general purpose’ test for deciding which taxes have to start in the House and which do not.”
“But the Constitution makes no such distinction, and neither does Supreme Court precedent,” Sandefur said. “The precedents say that the only kinds of taxes that don’t have to originate in the House are penalties or fines. But the Supreme Court itself ruled in 2012 that Obamacare’s individual mandate is not a penalty or a fine. So the Origination Clause should therefore apply.”
He said the D.C. Circuit has ruled for the first time “that judges can decide for themselves what the ‘main object or aim’ of a tax is, and then pick and choose whether the constitutional rules on the enactment of new taxation should apply.”
“We think that’s wrong, and that’s what we’ll be taking to the Supreme Court if necessary,” he said.
PLF said the Constitution does allow “penalties” or “fines” to begin in the Senate.
“Those aren’t subject to the Origination Clause. But the individual mandate tax doesn’t fall into that category. Why not? Because the Supreme Court said so in NFIB vs. Sebelius. It specifically held that the individual mandate tax is not a penalty – only a tax,” the team explained.
“Under the approach that the D.C. Circuit takes here, a court could say that the ‘main object or aim’ of a tax isn’t to raise money, but to fund the military, or to promote the general welfare – and therefore that the Origination Clause doesn’t apply. The ‘general purpose’ approach – which the Supreme Court has never endorsed – gives courts too much power to decide when to apply constitutional restrictions, and when not.”
WND has reported on the case, brought on behalf of Matt Sissel, a small-business owner who wants to pay medical expenses on his own and has financial, philosophical and constitutional objections to being ordered to purchase a health plan he does not need or want.
His attorneys contend the Constitution requires all tax bills in Congress to begin in the House of Representatives. They charge that Sen. Harry Reid, D-Nev., manipulated the legislation that eventually gave America Obamacare by taking the bill number for an innocuous veterans housing program that had been approved by the House, pasting it on the front of thousands of Obamacare pages and voting on it.
That means, they say, that the entire law was adopted unconstitutionally and should be canceled, including its $800 billion in taxes.
The argument essentially makes the Constitution itself a silver bullet to kill Obamacare.
The first Obamacare trip to the high court was a challenge under the Commerce Clause. But the Supreme Court ruled in 2012 the law was a tax and, therefore, constitutional.
In its second decision regarding Obamacare, the Hobby Lobby case, the Supreme Court ruled that the government cannot force company owners to violate their faith by being required to fund abortion-causing drugs in employee insurance plans.
Sissel v. U.S. Department of Health & Human Services says Obamacare was “not enacted in compliance with constitutional procedures for raising taxes,” the plaintiff argues.
PLF points out Article I, Section 7, requires that legislation to raise revenue must start in the House to keep the taxing power close to the people.
The district court’s June 2013 ruling in the case left a stunning precedent. The court ruled that the individual mandate tax could be arbitrarily exempted from the Origination Clause requirement “on the grounds that the mandate is intended to prod people to buy health plans.”
“There is no precedent for setting aside the Constitution’s procedural requirements for new taxes merely because a tax influences conduct,” said Beard. “As the Supreme Court noted in its 2012 Obamacare ruling, every tax has a regulatory purpose. The district court’s doctrine would carve a gaping loophole in the Origination Clause – essentially repealing it through judicial exceptions.”
Sissel said: “I’m in this case to defend freedom and the Constitution. I strongly believe that I should be free – and all Americans should be free – to decide how to provide for our medical needs and not be forced to purchase a federally dictated health plan. I’m very concerned about Congress ignoring the constitutional road map for enacting taxes, because those procedures are there for a purpose – to protect our freedom.”
In a video about the case, PLF attorney Todd Gaziano said the Senate violated the Constitution in its work on Obamacare, and so the law should be abandoned.
Conservative commentator George Will wrote about the case under the headline “Obamacare’s doom”:
In June 2012, a Supreme Court majority accepted a, shall we say, creative reading of the ACA by Chief Justice John Roberts. The court held that the penalty, which the ACA repeatedly calls a penalty, is really just a tax on the activity – actually, the nonactivity – of not purchasing insurance. The individual mandate is not, the court held, a command but merely the definition of a condition that can be taxed. The tax is mild enough to be semi-voluntary; individuals are free to choose whether or not to commit the inactivity that triggers the tax.
The “exaction” – Roberts’s word – “looks,” he laconically said, “like a tax in many respects.” It is collected by the IRS, and the proceeds go to the Treasury for the general operations of the federal government, not to fund a particular program. This surely makes the ACA a revenue measure.
Did it, however, originate in the House? Of course not.
Will argued that the Senate has every right to amend a House bill, but regarding whether a change actually is an “amendment,” the case law establishes that the issue must be “germane to the subject matter of the [House] bill.”
Earlier, dozens of members of the U.S. House of Representatives signed on to the case, claiming the Senate didn’t have the authority to pass the bill.
They argued taxes only can originate with the House, the representatives closest to the American people.
The requirement is so important, according to the members of Congress, that the Constitution never would have been adopted without it.
According to a brief dozens of House members have filed in the case, the principle “behind the Origination Clause – sometimes phrased as ‘No Taxation Without Representation’ – was the moral justification for our War of Independence.”
“With this war for freedom and liberty in mind, the Origination Clause of our Constitution was written; and without it at the core of the ‘Great Compromise of 1787,’ the 13 original states would never have agreed to ratify the Constitution,” the brief states.
“The primary dividing issue between the delegates to the Constitutional Convention of 1787 was the question of how to resolve the method of representation in the upper chamber. The small states preferred to retain the equal representation they had enjoyed under the Articles of Confederation, while the large states wanted to shift the national legislature to a proportional representation of the American population. No disagreement threatened the success of the convention and the new Constitution more than this one. After a month of heated debate and threats of secession, the delegates finally agreed to the Great Compromise of 1787; a bicameral legislature with equal representation of states in the upper branch, and proportional representation of the nation in the lower branch. That Great Compromise was only made possible by agreement of both sides to restrict the upper branch from originating money bills.”
It continues: “The power of the purse was unquestionably reposed in the People’s House, and it has remained in that chamber throughout our history. If the Senate can introduce the largest tax increase in American history by simply peeling off the House number from a six-page unrelated bill which does not raise taxes and pasting it on the ‘Senate Health Care Bill’ and then claim with a straight face that the resulting bill originated in the House, in explicit contravention of the supreme law of the land, then the American ‘rule of law’ has become no rule at all.”
The brief was filed by attorneys representing Reps. Trent Franks, Michele Bachmann, Joe Barton, Kerry L. Bentivolio, Marsha Blackburn, Jim Bridenstine, Mo Brooks, K. Michael Conaway, Steve Chabot, Jeff Duncan, John J. Duncan, Jr., John Fleming, Bob Gibbs, Louie Gohmert, Andy Harris, Tim Huelskamp, Walter B. Jones, Jr., Steve King, Doug Lamborn, Doug LaMalfa, Bob Latta, Thomas Massie, Mark Meadows, Randy Neugebauer, Steve Pearce, Robert Pittenger, Trey Radel, David P. Roe, Todd Rokita, Matt Salmon, Mark Sanford, David Schweikert, Marlin A. Stutzman, Lee Terry, Tim Walberg, Randy K. Weber, Sr., Brad R. Wenstrup, Lynn A. Westmoreland, Rob Wittman and Ted S. Yoho.
Their argument noted that at the 1787 convention, George Mason explained why the Senate was not allowed to raise taxes.
“The Senate did not represent the people, but the states in their political character. It was improper therefore that it should tax the people … Again, the Senate is not like the H. of Representatives chosen frequently and obliged to return frequently among the people. They are chosen by the Sts for 6 years, will probably settle themselves at the seat of Govt. will pursue schemes for their aggrandizement – will be able by weary[ing] out the H. of Reps. and taking advantage of their impatience at the close of a long session, to extort measures for that purpose.”
U.S. senators originally were selected by state legislatures, not a direct vote of the people. The law was changed by the 17th Amendment in 1913.