Patrick Mullin: Taxpayers Beware as Obamacara Ruling Potentially Expands Government's Taxing Powers
June 28, 2012
The following is a statement by Patrick A. Mullin, a tax defense specialist who has argued before the United States Supreme Court and comments on the potential implications of today's Obamacare ruling as to the Government's taxing powers:
"While today's ruling, in upholding critical provisions of the Affordable Care Act, may foster important policy goals on the health care issue, an unintended consequence of Chief Justice Roberts' opinion may be the expansion of the federal government's right to impose taxes disguised as penalties under the Taxing Clause of the United States Constitution."
As Chief Justice Roberts stated in his opinion, "The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes."
Mr. Mullin notes with caution that "The Court's decision may unfortunately be read as opening the door for a government, in desperate need of funds with an ever-looming deficit, to utilize the Taxing Clause as a means of imposing penalties upon taxpayers who fail to engage in certain encouraged behaviors such as, here, not purchasing health insurance.
"I hope that Congress will exercise restraint in not seizing upon this ruling in imposing new taxes under the disguise of penalties for the absence of certain so-called encouraged behavior. I further hope the Supreme Court, in future rulings, will limit this use of the Taxing Clause to the Health Care issue based, for example, on the apparent conflict between the holding in Chief Justice Robert's opinion regarding the Anti-Injunction Act and the holding regarding the Taxing Clause."
NOTE TO EDITORS: Patrick A. Mullin maintains a tax defense boutique practice in New York City, Washington, D.C., and New Jersey. He argued before the United State Supreme Court in the federal sentencing matter Melendez v. United States and provides media commentary on important legal issues.