Professor Willis argues the following: (1) that the ACA’s individual mandate is not authorized by Congress’s Commerce Power; (2) that the individual mandate is contrary to the Necessary and Proper Clause; (3) that the individual penalty is contrary to Congress’s limited taxing power; and (4) that the Anti-Injunction Act does not preclude the Sixth Circuit from finding the penalty provision unconstitutional.
In regard to whether the individual mandate is authorized by the Commerce Power, Professor Willis writes that, because others have “adequately explained” this issue, he would limit his argument to “the Mandate unconstitutionally regulates individual inactivity, contrary to its limited power to regulate actual commerce.” (Willis Amicus Brief at 3.) Assuming, however, that the court disagrees, Professor Willis proceeds to argue that because the Commerce Power does not provide Congress with enforcement power, it must rely on the Necessary and Proper Clause to justify the penalty provision. (Id. at 3–9.) Professor Willis argues that the penalty provision is neither necessary nor proper because—unlike the use of the police power to outlaw certain behaviors, or the use of eminent domain to extract private property in exchange for just compensation—it amounts to both a regulatory penalty and a tax. (Id. at 3.) This, he argues, is constitutionally problematic because under either approach, the taxation power is being levied improperly, and therefore, poses the risk of “eviscerating” constitutional limitations on “the power of Congress to take money from people.” (Id. at 8–9.)
Regarding Congress’s taxing power, Professor Willis argues that in order “to satisfy the limited Taxing Power, the individual penalty must fit into one of five groups”: a duty, an impost, an excise, a direct tax, or a tax on income, as permitted by the Sixteenth Amendment. (Id. at 9.) Professor Willis provides a brief description of each of these types of constitutionally authorized taxes, and concludes that §1501(b)’s exaction for failing to acquire minimally adequate coverage does not fit into any of them.
For instance, in regard to whether the penalty provision is an excise, Professor Willis writes, “Never has a United States excise applied to the inactivity of an individual.” (Id. at 11.) He argues that regardless of how the activity-inactivity distinction plays out in the Commerce Clause context, “no Court or commentator has ever argued the power to levy an excise reaches mere economic decisions of individuals, let alone inaction.” (Id.) He writes, “Excises on humans do not apply to mere decisions not to do something. If they did, they would be direct taxes, which must be apportioned.” (Id. at 12.)
On whether the penalty provision constitutes a tax on income, Professor Willis lists five reasons why he believes it does not. First, he argues that though, if levied, the penalty represents a percentage of an individuals’ income, the penalty provision does not have a proper trigger because, as is required by Glenshaw Glass, it is not “an accession to wealth clearly realized over which the taxpayer has complete dominion.” (Id. at 12–13.) Second, he writes that though the cost shifting between individuals that may occur if the provision is enforced will produce wealth, that cost shifting is only prospective, so it “cannot be the subject of an income tax.” Third, Professor Willis argues that the wealth taxed has not been derived: that “even if some individuals are currently wealthier because they plan to defer purchasing insurance until they become ill, they have nevertheless not yet ‘derived’ that income in the constitutional sense.” (Id. at 14.) (Emphasis omitted). Fourth, Professor Willis writes that the “alleged wealth did not derive from anywhere.” (Id.) He argues that the “mere performance of a task—such as mowing the lawn or living in one’s home—do not derive from anywhere other than oneself.” (Id. at 14–15). Thus, the economic decisions involved in the purchase of health insurance do “not ‘derive’ from anywhere but the individual’s own mind,” and are not the proper subject of an income tax under the Sixteenth Amendment. (Id. at 15.) Finally, Professor Willis writes that “the source of the alleged wealth is the individual’s own personal actions,” which he argues is insufficient because income must be derived from a source other than the “individual’s decisions or actions for himself.” (Id.)
Professor Willis concludes his brief with a short section on the Anti-Injunction Act, in which he argues that the Sixth Circuit should adopt the district court’s approach and find that the Act is inapplicable to “what amounts to declaratory relief.” (Id.)
