Justice Department Claims Taxing Power is Constitutionally Unlimited in Defense of ObamaCare

U.S. District Judge Henry Hudson ruled in Richmond, VA on 2 August that the Virginia attorney general lawsuit claiming that ObamaCare was unconstitutional had enough merit that he would not stop it from moving to a trial in October in Richmond.  The Virginia legislature has also passed a law protecting its citizens from being forced to buy health insurance by the federal government.  Virginia Attorney General Ken Cuccinelli said, "The government cannot draft an unwilling citizen into commerce just so it can regulate him under the commerce clause."  Foolishly, the state of Virginia's lawyers have conceded that the federal government has broad powers to impose a tax, but they claim it has less power to impose a penalty. 

The Justice Department claims that Congress has broad authority to regulate private decisions on health care since those decisions affect the health care system and therefore interstate commerce.  They also claim the power to tax people who refuse to join mandated programs.  In fact, they go so far as to claim that the "courts are without authority to limit the exercise of the taxing power."

Now, the Justice Department is insanely wrong on both claims it is making.  This is not to say that they will not carry the day in court, but they are clearly making two unconstitutional arguments at the core of their case. 

First, they are claiming that anyone who does not purchase a health insurance plan acceptable to the federal government is affecting the health care system because at some time they will need to use the health care system.  This in turn means it affects interstate commerce.  So, a person is to be forced to buy a particular, mandated health insurance policy or one of a few such policies so that he will be forced to affect interstate commerce.  Well, actually, this may not be true at all.  First, some people will actually die without getting health care, though we do not know who they will be.  Second, some people are so wealthy that they have no need to purchase insurance to provide for their own health needs.  It is clear that the Obama faction want to force such people to buy policies which will subsidize others with less income, but such wealthy people are not evading a personal responsibility as the Justice Department argues they are.  Third, the policy best suited to some individuals will surely be different than the government mandated policies.  Fourth, it is a novel legal claim to force people to buy a product so that they have been forced to participate in commerce they did not want to participate in.  Fifth, that commerce still may not truly be interstate commerce since health plans are to be formulated and administered state by state.

Recall that Congress voted for ObamaCare while claiming that it did not represent a tax, which was a point Obama was very insistent upon.  But now, in the face of the challenge by the state of Virginia, and a separate lawsuit by the attorney generals of 20 other states, which is coming up for a similar ruling on whether it will be allowed to proceed, the Justice Department is claiming that Congress has the authority to pass ObamaCare based on its taxing power.  In fact, it has no such power since the taxing power only exists for the purpose of exercising the strictly enumerated powers in Article I, Section 8 of the Constitution, where there is no mention of caring for the medical needs of the People.  This inconvenient fact has long been ignored, however.

The current Justice Department claim goes even further than this usual usurpation of power by Congress.  It claims that the courts have no power to limit the taxation power!  Why is this going much further?  Because the Constitution places a further restriction on what Congress can do beyond enumerating its powers.  It says that Congress must legislate in such a way that it does not harm the General Welfare.  So, if ObamaCare is not consistent with the General Welfare, then it is unconstitutional.  Some will debate whether it is or not, though most of the American People have concluded that it is harmful to them.  What cannot be debated is this:  The taxing power of Congress is limited by the General Welfare and therefore it is a serious usurpation of power by Congress and the Justice Department to claim that power is unlimited.  This is clearly the claim of megalomaniacs.  There can be no question that if Congress levels a tax of 100% of income upon any American citizen, it has fundamentally violated his right to life, liberty, and the pursuit of happiness.  The power to tax must have limits.  It cannot be unlimited.  If Congress were not to have enough sense to recognize this, then the courts would have to step in and declare the excessive taxes unconstitutional.

Judge Hudson recognized some of these problems.  He said, "Never before has the [Constitution's] commerce clause and associated necessary and proper clause been extended this far."  Indeed, if they are extended so far, then there are no limits to the power of the federal government except the few among the many rights still protected in the Bill of Rights and the 14th Amendment.  We can then be forced to participate in any market for any good or service and then be controlled by regulation.  We can be taxed in any way to any degree by government so that it can acquire all of our income and wealth, leaving us even homeless, without clothing, and without food.  Clearly, it is the job of the federal courts to squash these hugely inflated claims of power made by the Obama Justice Department in the name of the Democrat Congress.  Your life is at stake in this.  This is a claim of a right to tyrannical rule which King George III would not have attempted.

Now that the Justice Department has claimed that ObamaCare actually invokes taxation, let us examine the evolving size of this tax.  The Kaiser Family Foundation survey of employers in 2009 found that the average premium for employer-provided family policies was $13,375.  This is the kind of policy that ObamaCare is expected to mandate, when the bureaucrats come forth with their mandates.  This is 26% of the median household income of $52,000.  ObamaCare will provide some subsidies for incomes up to $88,000, but this is still a massive tax on many earning less than $88,000 and the subsidy cost will be shifted to everyone making more than $88,000 and fall back in increased prices for all goods and services upon those who are subsidized as well.  The new tax on a family with a household income of $88,000 will be 15.2%!

It gets worse.  The Arizona Republic said in July that "State and university employees with families can expect to see their monthly health insurance costs rise as much as 37% next year."  The reason for the increase is ObamaCare!  If this kind of severe health insurance premium increase continues into 2014 when ObamaCare requires everyone to purchase the federally mandated health insurance policies, then this tax upon the People will be the most gigantic tax ever in the history of the United States!  Obama and the Democrat Congress have foisted the highest tax increase in our history upon us in a law most Americans clearly opposed then and continue to oppose today.

Throw these tyrannical bums out of office as a matter of self-preservation!  Meanwhile, we must hope the federal courts have enough sense to declare ObamaCare unconstitutional.  It clearly is.

The Effectiveness of Government Management

I have grown a bit weary of constantly pointing out the nonsensical, idiotic, wrongheaded, uneconomic, unconstitutional, thieving, and brutal aspects of what the Democrats want to do to change our health care system.  I have pointed out that the things they are already doing in medicine are largely unwise.

I have noted that the U.S. government mismanages these functions very badly already:

• Health care as in Medicaid and Medicare
• The U.S. Postal Service
• Amtrak
• Ethanol production as alternative fuel
• Subsidies and mandates for wind and photovoltaic electricity generation
• Crop subsidies
• The identification of pollutants and toxic substances
• The forests and wildlands
• Permitting for oil and gas exploration and field development
• Gas mileage requirements for vehicles
• Medical device testing and quality assurance
• Scientific research and development
• Energy research and development
• Climate research
• Home mortgage lending
• Monopoly identifications
• Business accounting rules
• Business and medical liability torts
• Education (see my next post)
• Defense (largely due to too unfocused attention given diffused meddling in everything)
• Foreign policy
• Constitutional law
• Flight safety and route controls
• Interstate bridge safety and maintenance
• Airwaves licensing
• Drug testing and evaluation
• Anti-discrimination (turning it into discrimination)
• Business destruction by encouraging labor unions
• Immigration and border control
• Taxation and government revenue
  
• Economic growth
• Job creation
• Interstate commerce
• International trade
• Government property
• Government purchasing and acquisitions
• Eminent domain
• Drug use prohibitions
• Wage controls
• Price controls
• Patent controls
• Alcohol controls

It sure is a strange thing that so many Americans are on a constant search to find some other aspect of our lives to turn over to the federal government.

Obama on Taxes

Barack Obama warns that McCain's tax policy, spending plans, and energy plans will continue the economic slowdown he likes to pretend is a recession. However, his higher taxes on oil companies and wealthy individuals, even though accompanied by a $1000 tax break for most working families, will do much less than McCain's plans to straighten out the economy. The plans of either to institute carbon taxes are likely to send the economy into recession, if implemented, especially as some sort of additional tax.

Not happy to only make the economically absurd claims above, Obama claims that President Bush sacrificed investments in health care, education, and energy and infrastructure on "the altar of tax breaks for big corporations and wealthy CEOs." The truth is that the Bush tax cuts enabled the economy to grow so fast and steadily that much more money rushed into the government coffers and both Republicans and Democrats in Congress gleefully spent every last additional penny and then spent some a second time. Chris Edwards, The Cato Institute director of tax policy notes that the Department of Health and Human Services increased spending by 67% in 7 years under Bush, while the Dept. of Education increased spending 92%, the Dept. of Energy spending was up 42%, and federal capital investment outlays were up 35% for non-defense investments and 131% for defense investments. The big tax breaks for corporations resulted in an increase of 128% in federal corporate tax revenues. I suppose Obama's claim that they got those big tax breaks means that he thinks their taxes should have gone up much more than 128%! Hey, Obama, way to ship hordes of jobs to China and India!

The fact of the matter is that the Democrat goal of hugely expanded government expenditures was much better realized by President Bush with his tax cuts than it ever will be by Democrats with their punitive tax schemes on the higher income earners and windfall profit taxes on whichever industries earn the disfavor of the Democrats. Why do the Democrats never talk about windfall taxes on the movie industry? Is it because so many movie stars and producers are giving them a lot of campaign money? Just wondering.

Barack Obama has genius in fooling many of the people most of the time. Other than that, he does not know at all what he is doing.

Price of Corn Shoots Upward -- Ethanol Will Too!

In my 24 March 2008 post Corn for Real Food or Energy Myth?, I demonstrated how every argument for the use of corn to make ethanol was wrong. In some cases, it has long been clear that these arguments were at least dubious and more recently it has become clear that the entire policy is idiotic. On Friday, 4 April 2008, the futures price for corn to be delivered in May on the most actively traded contract hit $6 per bushel. Corn prices have risen nearly 30% already this year due to reduced stockpiles and an huge increase in demand for ethanol and livestock feed. Prices have shot up 89% in the last 18 months!

Recall from the earlier post that distillers can produce 2.7 gallons of ethanol from one bushel of corn. Presently, the cost of one gallon of ethanol is $2.50, so the 2.7 gallons produced from one bushel of corn are worth $6.75. This means that the cost of production in converting a bushel of corn into 2.7 gallons of ethanol and delivering it to the refiners, must be significantly below $0.75. This is really putting a squeeze on the ethanol refiners, so the cost of ethanol will likely have to go up. This will further increase our gasoline prices at the pump.

Just this last week, the oil industry was running ads, as the Democrats in Congress once again called them before committees to justify their profits, claiming that prices were going up due to the cost of a barrel of oil and the uncertain situation in the Middle East and in some other oil-producing countries, such as Venezuela and increased world-wide demand. This is true, but it was noteworthy that they did not complain about the effects of gasoline taxes, the requirement to use ethanol in gasoline blends, the many restrictions on their drilling for oil, and restrictions on using oil shale lands, most of which is on Federal land. Clearly, they were too afraid of the politicians who were challenging their profits. They told Congress their profits are in line with those of other industries. Democrats love to call them before Congress and grandstand that the oil companies are gouging the American public, but every rational examination of the situation always shows that they are not the guilty party. But the fools in Congress who are guilty use this means to divert attention from their hands in the cookie jar.

One of the interesting factors driving futures prices upward is that the U.S. Department of Agriculture has projected that farmers are only going to plant 86 million acres of corn this year, which is an 8% drop from last year, when the area planted in corn was the highest it has been since 1944. This is rather puzzling given the increase in corn prices! One would expect the expected high demand and the resulting high prices to drive farmers to plant more acreage in corn. Why is this not expected to happen?

One reason is that soybean prices have also gone up in the last year since much of the increased acreage planted in corn was due to a decrease in acreage planted in soybeans. Another factor is that the cost of planting corn is going up. Apparently one of the reasons for this is that corn seed is going up in cost, which caused the price of Monsanto Company stock to go up last week greatly. They are the biggest seed producer. Still another factor is one predicted in the March article, the need for crop rotation, which was too much ignored last year. When it is ignored, more fertilizer has to be used and that means more expense or there is a decrease in corn yields. When more fertilizer is used, there are more pollution run-off problems and this results in problems for farmers also. Heavy rains are forecast to continue in the Delta and southern Corn Belt regions far enough into April that planting delays will tend to drive farmers to plant more soybeans and less corn, since soybeans do better in wet conditions and with late planting than does corn. Fertilizer supplies are also low and since soybeans do not need nitrogen fertilizer as corn does, this gives an incentive to switch acreage to soybeans.

Meanwhile, the government requirement for ethanol use in gasoline blends is not going to diminish, so the ethanol cost will be driven sharply upward as the supply of corn diminishes and food and livestock demand remains. In fact, hog prices have been so low that farmers have been holding them back from the market in hopes of better prices. Meanwhile, these larger numbers of hogs have to be fed. Cattle stocks are also running high.

So, analysts are expecting the new corn crop prices to fluctuate between $6.20 and $6.55 per bushel, further driving the costs of corn products, beef, pork, and chicken upward. Ethanol will also increase in cost and there will be probable increases in the subsidies for ethanol so that ethanol production and use in gasoline blends will increase as Congress has determined it will. So as taxpayers, food consumers, and as users of transportation your costs are going to go up, up, and up some more. Tell your local politicians how grateful you are for their wise policies with respect to ethanol, energy in general, the environment, global warming, and taxation!