Sunday, July 1, 2012

My analysis of the obamacare ruling

I have read most of the SCOTUS ruling on Obamacare.  If you are interested you can read it here.

I see two main issues that the court had to address:  First is the commerce clause in the Constitution.  Second, is the taxing issue.  I'm going to address the commerce clause first because I think it is the most straightforward (if you are a constitutionalist!)  There are basically three areas in the Constitution that statists exploit to achieve their goals.  The "general welfare", "regulate commerce", and taxing authority provisions outlined in the Constitution.  Now, 'promoting the general welfare' could mean just about any activity could be regulated by the federal government but the key is to read the entire paragraph and put it into context with  what the signers of the constitution had in mind ! It is clear to me that promoting the general welfare is limited to activities such as preventing invasions and such.  It was never intended to be interpreted as some sort of reason to institute cradle to grave statist policies!

The same can be said of the 'commerce clause'.  Regulating interstate commerce among the states requires that such commerce exists in the first place.  Also, it is not enough to have a particular commerce to exist but that it's regulation is deemed necessary to avoid conflict between the involved states.  In other words, the regulation is intended to allow smooth business transaction to take place and minimize conflicts between parties.  The commerce clause was neither  intended to be a weapon to force individuals to participate in a particular industry nor force an individual  to enter into a particular type of commerce.  The federal intrusion into commerce must necessarily be limited otherwise any and all business enterprises could be regulated including intrastate commerce!  The federal government's role should be as an objective observer or referee, if you will, in commerce between the states.  Regulating is not instituting or participating!

Congress has the authority to lay taxes, both indirect and direct.  Direct taxes must be apportioned among the states.  Generally, indirect taxes are consumption taxes that require one's active participation.  The sixteenth amendment is problematic as it gave the federal government the power to tax wages or income.  Prior to the sixteenth amendment, federal revenue was obtained primarily from tariffs, corporate and excise taxes.  The sixteenth amendment (passed in 1913 in conjunction with the Federal Reserve Act) was required because the government wanted to continue to spend without having to worry about how to budget for federal programs such as social security and medicare (passed in 1935 and 1965 respectively).  One of the problems with the sixteenth amendment was that it granted a new federal power of confiscating private property from an individual by fiat.  Another problem is that it granted a new federal power of confiscating private property from an individual by fiat !!  This is a direct tax that is not apportioned.  It also contributes to the  wealth gap and persistent poverty.  Income taxes increase the wealth gap and cause persistent poverty by encouraging consumerism and discouraging saving and investing.  Again, the income tax was never intended  for the majority of the populace but was passed "to make the rich contribute" to the bill for social security!  At the time the sixteenth amendment was passed only about 1% of the population was subject to the income tax!!  How do you like them apples!!

So let us get back to the Obamacare ruling!  In my opinion, the federal government has been given a most dangerous weapon.  That of confiscating the property of others in the form of taxes (income) by virtue of the sixteenth amendment which was passed (but not ratified) and advertised as a 'tax on the rich'.  Now the income tax applies to not just the rich and has allowed the government to morph the ability to tax to just about anything it wants!  I disagree with Justice Roberts because while the government has the ability through precedent to just about tax anything.  The government has never been able to tax inactivity or non-participation.  This opens up a whole new source of funding for the federal government (maybe this is how the federal government plans to pay back the Federal Reserve?).   The only way to correct this in the long term is the repeal of the sixteenth amendment!

So what's next?  Well how about a tax (excuse me, penalty) for not purchasing low flow toilets or solar panels?  Did you buy a electric car this year? Well, why not ? Get ready because the possibilities are endless!!

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