Taxing Power, Spending Power [DONE] Flashcards
Taxing Sebelius
Congress can not compel someone to engage in commerce if they wouldn’t have done so on their own.
[Congress has a broad authority to levy taxes, and there is no constitutional basis to hold that an individual is exempt from taxation due to his or her inactivity.]
Completely separate point from whether the law at issue is about commerce power.
Rather than regulating people’s pre-existing choice to engage in commerce, this law is compelling people to engage in commerce.
J. Roberts in Tax Sebelius
does not overrule, but DISTINGUISHES from Bailey and says that payment deserves to be characterized as a tax.
Sebelius Factors
Unlike Bailey, this was a TAX department
You pay to the IRS
Determined based on TAXABLE INCOME
Raises Revenue
Not an unduly heavy burden
Low tax
It’s inherent that taxes influence conduct, but that can be OK
They took the easy way out and said “We don’t have to decide the precise point between tax power execution and punitive measures because here it is clearly just a tax. “
Bailey v. Drexel Furniture Co. “Child Labor Tax Case”
The presence of extensive penalizing features, indicating a primary purpose to regulate, may render a tax statute constitutionally invalid. a tax is permissible when Congress’ primary motive is to raise revenue. Thus, a tax used to penalize—and regulate—was unconstitutional.
FACTORS:
Taxes really appearing to be a penalty (rather than a revenue generative) purpose are not OK.
Court “gets into purpose” here. (Clause compared it to a prohibition tax on margarine butter. Main message: On its face, it didn’t have regulatory components so it was OK. )
South Dakota v. Dole
DRINKING AGE CASE
The constitutional limitations on Congress when exercising its spending power are less than the limits on its authority to regulate directly, and thus through the spending power Congress may indirectly achieve objectives that it could not attempt to achieve directly.
J. Rienquest in Dole:
Listed out key limitations and decided that they were not violated here (does not overrule Bailey) :
Textually limited to Common defense and general welfare (by the Constitution)
Clear Statement Rule (Unambiguous)
Related to Federal Interest in National Programs
No conflict with other provisions of the constitution
Not overly coercive
Spending Clause Sebelius
Facts: Withholding Medicaid funds, unless state agreed to make Medicaid BIGGER
The amount at stake was very large (and the states really needed the money)
Rule: The Spending Clause of the Constitution does not give Congress the authority to compel states to adopt a federal regulatory system as its own.
How did Sibelius Distinguish Dole?
Distinguished Dole by saying what made it Coercive is how much the states needed the money.
Think: Do these conditions amount to duress?
Are they forcing someone to choose between their legal rights?
Problem Here: State government doesn’t have the right
Spending is more likely to be unconstitutional if the states didn’t really need it
Justice Opinions in Spending Sebelius
J. Roberts (maybe a tad dramatic) : “Gun to the head” → “overly coercive”
J. Ginsburg: “States have NO RIGHTS”
