Did PPACA taxes start in the right place?

April 29, 2014 at 12:53 PM
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Opponents of the Patient Protection and Affordable Care Act argued on Capitol Hill Tuesday that any taxes imposed by the law came to life in the wrong place.

Todd Gaziano, a senior fellow at the Pacific Legal Foundation — an organization that litigates for limits on government — said Democratic congressional leaders created the bill that became PPACA by jamming a 2,074-page Senate "amendment" into H.R. 3590, a six-page House bill that dealt with a tax credit for veterans.

The "origination clause" in the U.S. Constitution requires any laws that levy taxes to start out in the House.

The Obama administration says that the federal courts have no authority to consider questions about whether PPACA provisions — such as the penalty to be imposed on individuals who fail to own "minimum essential coverage" — started in the right place.

"When they hear such an argument, they rightly suspect the administration has something to fear from careful and independent court review," Gaziano told members of the House Judiciary Committee's Constitution and civil justice subcommittee today at a hearing on the origination clause.

Under the Obama administration's view, "all that is necessary is that the House bill have the word 'tax' in it in order for the Senate to originate any tax imaginable," Gaziano said, according to a written version of his testimony posted on the committee website.

The Pacific Legal Foundation is backing Matt Sissel, a taxpayer with a case challenging the constitutionality of the PPACA, Sissel vs. the U.S. Department of Health and Human Services et al. In the case, which is making its way through the D.C. Circuit U.S. Court of Appeals, Sissel argues that the PPACA individual mandate is unconstitutional because it originated in the Senate.

A district court judge ruled against Sissel.

The U.S. Supreme Court decided in June 2012 that Congress could use its authority to impose taxes to impose the individual mandate penalty. But some have argued that the court did not officially classify the penalty as a tax.

Joe Onek, a Washington lawyer, spoke at the hearing in defense of the constitutionality of the process for creating the mandate penalty.

The origination clause provides that, when a bill for raising revenue passes in the House, the Senate can propose or concur with amendments as on other bills, Onek said.

"A House revenue bill amended by the Senate remains a bill that originated in the House for purposes of the clause," Onek said. "At the Constitutional Convention, the framers rejected proposals that would have limited the scope of the Senate's amendments."

The fact that the Senate amendment replaced the text of the House bill completely is not an uncommon occurrence and is not relevant to the Sissel case, Onek said.

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