Eugene Volokh's Blog, page 2717
September 9, 2011
Amusing Comment on George Will's Rehabilitating Lochner Column
From the comments section of a blog called "Crooks and Liars": "Oh, and by the way, not only is Will immoral, he is also a f*cking idiot: the Contract Clause at issue in Lochner is found in Article 1, Section 10, Clause 1 of the Constitution, not in the Ninth Amendment you dimwit."
[In fact, the Contract Clause played no role in Lochner, and Will correctly identified the Ninth Amendment, along with the Fourteenth Amendment's Due Process and Privileges or Immunities Clause, as alluding to unenumerated rights; he never said anything about the Contract Clause, much less claimed that it was in the Ninth Amendment.]
GW Law Announces VAP Program
I'm pleased to report that GW Law is announcing a new Visiting Associate Professor program — aka, a VAP program — designed for those interested in law teaching. I have posted the announcement here. Applications are due starting next week.
My hope is that GW's VAP program should be particularly appealing for prospective law professors. First, it's in Washington, DC, which is a pretty great place to be. Second, the GW program will take an unusually flexible view toward the teaching responsibilities of the VAPs — the goal will be to tailor teaching to each VAP's interests. Third, the VAPs will be counseled by members of the law school faculty's Intellectual Life committee, a group that includes me. And fourth, VAPs will be visiting associate professors, not visiting assistant professors. (Ok, so that's a meaningless distinction that just reflects quirky GW-specific labeling practices — think of it as the academic equivalent of going to eleven — but maybe it matters to someone out there.)
Math Problem
Here's a math problem I much enjoyed, from the 2011 International Mathematical Olympiad:
Consider a set of four different positive integers, which we'll call a, b, c, and d. There are of course six pairwise sums of these integers, a+b, a+c, a+d, b+c, b+d, and c+d.
Some number of these pairwise sums might be divisors of the sum of all four integers, a+b+c+d. Thus, for instance, if the set is 1, 2, 4, and 8, the pairwise sums are 1+2 (3), 1+4 (5), 1+8 (9), 2+4 (6), 2+8 (10), and 4+8 (12); exactly two of these pairwise sums (3 and 5) are divisors of 1+2+4+8 (15). Or if the set if 1, 2, 4, and 10, zero of the pairwise sums are divisors of the overall sum, since that sum is 17, a prime number.
What is the largest possible number of such pairwise sums that are divisors of the overall sum? Can you have a set in which all six pairwise sums are divisors of the overall sum? Five? Four? Three? (Obviously you can have a set in which two pairwise sums are divisors of the overall sum, since that's what we see with 1, 2, 4, and 8.)
Once you identify this largest number of divisors, what are all the possible sets that yield this number? If there's an infinite number of such sets, indicate the rule through which they can be identified.
If you prefer the more rigorous formulation from the Olympiad itself, here it is: Given any set A = {a1, a2, a3, a4} of four distinct positive integers, we denote the sum a1+a2+a3+a4 by sA. Let nA denote the number of pairs (i, j) with 1 <= i < j <= 4 for which ai+aj divides sA. Find all sets A of four distinct positive integers which achieve the largest possible value of nA.
The IRS Wants to Give Tax Credits for Health Insurance Purchases Beyond Those Provided for in the ACA
The Internal Revenue Service is beginning to promulgate regulations to implement the tax-related provisions of the Affordable Care Act (aka "ObamaCare"). A proposed rule issued last month provides that eligible taxpayers may receive tax credits for the purchase of qualifying health insurance plans established by states under Section 1311 or by the federal government under Section 1321. The only problem is that this is not consistent with the actual text of the statute passed by Congress.
ACA Section 1401 provides that eligible taxpayers may receive income tax credits for purchase of insurance "through an Exchange established by the State under Section 1311." Section 1311 calls upon states to establish health insurance exchanges. It does not provide for the federal government to create health care exchanges. Rather, a separate provision of the act, Section 1321, provides that if a state does not "elect" to create an exchange that meets federal requirements, the federal government shall then "establish and operate" an exchange. Thus, under a plain reading of the text, the ACA only provides for tax credits for state-run exchanges, and if states fail to create exchanges, there are no tax credits for insurance bought on a federally run exchange.
This is potentially significant for several reasons. The individual mandate requires all Americans to purchase health insurance. Even if the mandate is successful at reducing adverse selection, health insurance premiums are still expected to rise due to other provisions in the law. Higher premiums could make it difficult for many Americans to comply with the mandate. For this reason, Congress not only called upon states to create exchanges, it also authorized tax credits to offset the cost of health insurance premiums for those with incomes between 100 and 400 percent of the poverty level. But if these tax credits are only available for insurance purchased through state-based exchanges, many will be left high-and-dry in states that don't create their own exchanges — and this could be a big problem. According to one recent report, only ten states had passed legislation to create qualifying exchanges through August 2011. (See also here.)
As David Hogberg reports in IBD, this has led some to believe the limitation of tax credits to state-based exchanges is a mistake. Under this theory, Congress meant to provide tax credits for any exchange-purchased insurance, because Congress wanted lower-income individuals to be able to purchase health insurance (and comply with the mandate). This may be true. As Vanderbilt's James Blumstein tells IBD (and I discussed in this paper), the exchange-related provisions of the law were not written all-that-carefully. Nonetheless, federal agencies lack the authority to unilaterally revise statutory mistakes. (A point Cato's Michael Cannon also makes here.) Congress may have wanted to make tax credits more widely available — just as it may have wanted those making less than poverty-level income to be eligible for exchanges as well — but that is not what Congress did.
The IRS may be inclined to argue that the failure to include a reference to federally run exchanges or Section 1321 in Section 1401 was a "scrivener's error" that should be disregarded. But this is a difficult argument to make in this case for several reasons. First, a "scrivener's error" is supposed to be that – a purely clerical error that could be attributed to a failed transcription or something of that sort. An example would be mistaking the relevant subsection in a statutory cross-reference – say mistaking "(i)" for "(ii)" or "Section 36B(B)(I)(b)" for "Section 36(B)(I)(b)," or screwing up punctuation. The alleged error here is more significant, however. Not only did Congress forget to include any reference to Section 1321, it also expressly stated that the tax credits were for insurance purchased through "an Exchange established by the State." So a legislator reviewing the relevant language could not claim that they did not realize the statutory cross-reference excluded federal exchanges because the clear text of the statute does as well. In other words, any legislator who actually bothered to read the bill before voting would have seen the limitation.
Another problem for the "scrivener's error" argument is that it is usually dependent on showing that it is implausible, and not merely unlikely, that the statutory provisions were a mistake. As the Supreme Court explained in U.S. Nat. Bank of Oregon v. Independent Ins. Agents of America, Inc., 508 U.S. 439 (1993), this will be shown in the "unusual" case in which there is "overwhelming evidence from the structure, language, and subject matter of the law" that Congress could not have consciously adopted the language in the statute. Similarly, in Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir. 2001), the D.C. Circuit explained that:
We will not . . . invoke this rule to ratify an interpretation that abrogates the enacted statutory text absent an extraordinarily convincing justification because . . . the court's role is not to correct the text so that it better serves the statute's purposes, for it is the function of the political branches not only to define the goals but also to choose the means for reaching them. . . . Therefore, for the [agency] to avoid a literal interpretation . . ., it must show either that, as a matter of historical fact, Congress did not mean what it appears to have said, or that, as a matter of logic and statutory structure, it almost surely could not have meant it. [internal quotations and citations omitted]
Given what's in the ACA, this is a showing that the IRS and HHS would have a hard time making. While it is certainly plausible – perhaps even likely – that many in Congress wanted tax credits for the purchase of health insurance to be broadly available, there is also ample evidence that the ACA was designed to induce states to create exchanges of their own. For example, Section 1311 directs states to create exchanges. Further, as Blumstein notes, under the ACA the federal government could sue to force a state to create an exchange. As in other policy areas, the federal government can't force states to comply, so it uses a combination of positive and negative incentives – in this case, subsidies for creating exchanges and the threat of a federally run exchange if a state does not create one on its own. In this context, limiting the availability of tax credits to insurance purchased in state-run exchanges can be seen as just an added inducement. Much like the Clean Air Act threatens states with the loss of highway funds if they fail to adopt sufficiently stringent pollution control programs, the ACA as written threatens states with the loss of tax credits for state residents if they do not create an exchange. Such a policy may not be wise or fair – and may undermine the goal of getting more people insured – but it takes far more than that to justify ignoring a statute's plain text.
Neither the IRS nor HHS has addressed these concerns as far as I'm aware, nor has anyone else. I'll certainly do a follow-up post if such arguments are out there. I noted that the ACA's text limits subsidies to state exchanges at a conference on health care reform and the states last fall, and no one suggested I was in error, but that does not mean I am right. It's also possible there's some other overlooked provision of the ACA that could be used to solve this problem. If so, I couldn't find it, but I'll also post an update if such a provision is found. In the meantime, the limitation of tax credits to those who purchase their insurance in state-run exchanges could be unwelcome news to those in the majority of states yet to create exchanges of their own.
I should also note that I have not addressed what would happen if the IRS were to just go ahead and finalize regulations providing for tax credits beyond those authorized by the ACA's text. Under such a scenario, standing to challenge the IRS' action in court would certainly be a big issue. As a general matter, there is no standing for a taxpayer to challenge a tax benefit conferred upon someone else. But the IRS, like all federal agencies, has an independent obligation to comply with the law, and I do not know of anyone who has argued that the IRS may create tax credits at will just because it thinks that's what Congress meant to do and such actions are not easily challengable in court. Just imagine the sorts of mischief such a doctrine could unleash.
Let there be Blight — My New Article on Blight Condemnations in New York
My new article, "Let There Be Blight: Blight Condemnations in New York after Goldstein and Kaur" is now available on SSRN. It critiques the New York Court of Appeals' recent controversial blight takings decisions in the Atlantic Yards and Columbia University eminent domain cases. It was part of a Fordham Urban Law Journal symposium on Eminent Domain in New York. Here is the abstract:
The New York Court of Appeals' two recent blight condemnation decisions are the most widely publicized and controversial property rights rulings since the Supreme Court decided Kelo v. City of New London. In Kaur v. New York State Urban Development Corp., and Goldstein v. New York State Urban Development Corp., the Court of Appeals set new lows in allowing extremely dubious "blight" condemnations. This Article argues that the New York Court of Appeals erred badly by allowing highly abusive blight condemnations and defining pretextual takings so narrowly as to essentially read the concept out of existence.
Part I briefly describes the background of the two cases. Goldstein arose as a result of an effort by influential developer Bruce Ratner to acquire land in Brooklyn for his Atlantic Yards development project, which includes a stadium for the New Jersey Nets basketball franchise and mostly market rate and high-income housing. Kaur resulted from Columbia University's attempts to expand into the Manhattanville neighborhood of West Harlem. When some of the landowners refused to sell, Ratner and the University successfully lobbied the government to declare the land they sought to be blighted and use eminent domain to transfer it to them.
Part II addresses the issue of blight condemnation. Goldstein and Kaur both applied an extraordinarily broad definition of "blight" that included any area where there is "economic underdevelopment" or "stagnation." In addition, the court opened the door for future abuses in three other, more novel, respects. First, it chose to uphold the condemnations despite evidence suggesting that the studies the government relied on to prove the presence of "blight" were deliberately rigged to produce a predetermined result. Second, it dismissed as unimportant the fact that the firm which conducted the blight studies had previously been on the payroll of the private parties that stood to benefit from the blight condemnations. Finally, the court refused to give any weight to extensive evidence indicating that Ratner and Columbia had themselves created or allowed to develop most of the "blight" used to justify the condemnations. The court's approach opens the door to future abusive condemnations and violates the text and original meaning of the New York State Constitution.
Part III discusses Goldstein and Kaur's treatment of the federal constitutional standard for "pretextual" takings. In Kelo and earlier decisions, federal courts made clear that "pretextual" takings remain unconstitutional despite the Supreme Court's otherwise highly deferential posture on "public use." Unfortunately, the Supreme Court has been extremely unclear as to what constitutes a pretextual taking. As a result, courts have taken widely differing approaches to the issue. Nevertheless, Kaur and Goldstein are outliers in this area, deferring to the government more than almost any other court that has addressed the question since Kelo. They virtually read the concept of pretext out of existence.
Fourth Circuit Dismisses Two Challenges to the Individual Mandate on Jurisdictional Grounds
On Thursday, the Fourth Circuit Court of Appeals issued two decisions dismissing challenges to the Obama health care plan's individual mandate on jurisdictional grounds. All three judges on the panel were Democratic appointees, including two chosen by President ObamaNeither ruling reached the merits of the question of whether the individual mandate is constitutional. Virginia v. Sibelius is by far the better known case, because it was brought by the Virginia state government. But Liberty University v. Geithner is perhaps more interesting.
In the Virginia case, the Fourth Circuit dismissed Virginia's challenge to the mandate because they ruled that the state lacked standing to challenge it. Virginia had based its standing on argument on the grounds that it had passed a state law exempting Virginians from being forced to buy health insurance. Normally, states automatically have standing to challenge federal laws that supersede their own legislation. But the Fourth Circuit ruled that the Virginia law was not a genuine exercise of state sovereignty, but merely a symbolic protest against the federal individual mandate. In my view, Virginia's motives for passing the law should have been irrelevant to the question of how it affected standing. Moreover, a decision not to regulate is just as much an exercise of sovereign authority as a decision to impose a regulation. In addition, I think Virginia should also have gotten standing on entirely unrelated grounds. It could have taken advantage of the "special solicitude" for state governments that the Supreme Court established in Massachusetts v. EPA. Virginia probably erred in putting all of its standing eggs in one basket. It should have emphasized Massachusetts v. EPA as well as its anti-mandate law.
Be that as it may, this decision is unlikely to matter much in the long run. Even if the Supreme Court also rejects Virginia's suit for lack of standing, there are lots of other anti-mandate plaintiffs — both state governments and individuals — who clearly do have standing, as the Fourth Circuit admits (at least in the case of the individuals). So the issue will get to the Supreme Court one way or another.
Liberty University v. Geithner is more interesting because it is the first court decision to endorse the federal government's argument that the individual mandate is a tax. Up till now, that argument has been consistently rejected by every judge who has ruled on it, including several who concluded that the mandate is constitutional on other grounds. The majority opinion only ruled that the mandate qualifies as a "tax" as defined by the Anti-Injunction Act, which forbids court challenges to "taxes" prior to the time when the IRS tries to actually collect the money. According to the majority, the AIA defines taxes more broadly than the Constitution, and encompasses all fines that are collected by the IRS through the normal tax enforcement system. I think Judge Andre Davis' dissenting opinion does a good job of rebutting this extremely broad interpretation of the AIA. And I think it likely that the Supreme Court will side with him and the other nine judges who have ruled the same way than with the Fourth Circuit majority. However, if the latter prevails, it could make it impossible for individuals to challenge the mandate until it takes official effect in 2014.
In a concurring opinion, Judge James Wynn goes further than the majority (which he also joined), and argues that the mandate is a tax not just under the AIA, but under the Constitution. He has thereby become the first of the eleven federal judges who have considered this question who endorsed the tax argument. The other ten judges (including Judge Davis) all concluded that the mandate is a regulatory penalty, not a tax. Obviously, if the federal government wins on this point, the mandate would be constitutional even if it is not authorized by the Commerce Clause or the Necessary and Proper Clause.
On balance, I think Wynn's argument is wrong. For reasons I explain here, the federal government's Tax Clause argument (which Wynn echoes) is unpersuasive:
As recently as 1996, the Supreme Court reiterated the crucial distinction between a penalty and a tax. It ruled that "[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government," while a penalty is "an exaction imposed by statute as punishment for an unlawful act" or — as in the case of the individual mandate — an unlawful omission. The individual mandate is a clear example of a penalty, where Congress requires people to purchase health insurance, and then punishes them with a fine if they fail to comply.
In September 2009, President Obama himself noted that "for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase." He was right. If the mandate qualifies as a tax merely because it punishes violators with a fine, then Congress could require Americans to do almost anything on pain of having to pay a fine if they refuse. It could use this power to force citizens to buy virtually any product, including broccoli, General Motors cars, or anything else.
Even if the individual mandate does somehow qualify as a tax, it is not one of the types of taxes that Congress is authorized to impose. The Constitution gives Congress the power to enact several types of taxes: Excise taxes, duties and imposts, income taxes, and "direct taxes" that must be apportioned among the states in proportion to population.
No one, including the federal government, claims that the individual mandate is a duty or an impost. The individual mandate is not an income tax because an income tax must target some "accession to wealth," in the words of Commissioner of Internal Revenue v. Glenshaw Glass Co., the leading Supreme Court case on the subject. The fine imposed by the mandate does not target any accession to wealth or flow of income. It simply forces individuals to pay a penalty if they disobey the federal government's regulatory requirement. The fact that low-income individuals are exempted does not change this analysis. A fine for jaywalking would not become an income tax if low-income individuals were exempted from it.....
It is even more implausible to suggest that the mandate is an excise tax. Excise taxes apply to economic transactions or the use of property of some kind. For example, a tax on the sale of alcoholic beverages qualifies as an excise. The individual mandate does not tax any kind of activity, use of property or economic transaction....
If the mandate is not a tariff, impost, income tax, or excise tax, it is either a direct tax or no tax at all. And if it is a direct tax, it would be an unconstitutional one, because it is not apportioned among the states in proportion to population as the Constitution requires.
The Supreme Court may well end up endorsing the individual mandate, though the anti-mandate plaintiffs also have a real chance to win. If the pro-mandate side wins, it probably won't be on the tax argument.
September 8, 2011
Does requiring the people of a state to vote on tax increases violate the Republican Form of Government guarantee?
That's the question raised by a lawsuit in Colorado's federal district court, in the case of Kerr v. Hickenlooper. In an amicus brief, I suggest that the answer is "no." The brief relies heavily on the scholarship of my Independence Institute colleague Rob Natelson, who happens to be the leading scholarly expert on the Guarantee clause.
In short, the Founders defined a "republic" to include governments such as those of ancient Athens, Carthage, and Sparta, all of which included elements of direct democracy. According to Minor v. Happersett (U.S. 1875), the decision of Congress to admit a state to the Union is conclusive proof that, at the time, the state had a Republican Form of Government. Massachusetts and Rhode Island had referenda when they were admitted. The progressive movement for initiative and referendum began in the last 19th century. Congress chose to admit Oklahoma (1907) which had very strong I&R provisions in its state constitution, and New Mexico (1911), whose statehood constitution specifically provided for the creation of a citizen initiative system.
Courts have held that the Republican Form of Government issue is not justiciable, and enforcement is up to Congress. The amicus brief, however, addresses the merits of the issue.
"Gh" Pronounced as "P"
In what English word (which is not a proper name) is "gh" pronounced as "p"? For a possibly not very helpful hint, see below.
The more common alternative spelling of this word does indeed render the sound using the letter "p." But the "gh" spelling is still common enough to be listed in dictionaries, and to get hundreds of thousands of Google hits.
Why Black Women Don't Marry Non-Black Men
Tuesday I explained that black women often remain unmarried, and yesterday that they frequently marry less educated or lower earning men.
Today, we turn another puzzle that is explored in my book, Is Marriage for White People?: why black women don't marry men of other races. Black women are only half or less as likely as black men to marry across race lines, and only a third or less as likely as Asian Americans and Latinos to marry across race lines. Black women's intimate segregation is often compared to that of Asian American men, but in fact Asian American men marry interracially much more frequently than do black women.
Although the gender gap in African American intermarriage is generally assumed to be longstanding, it is not. As recently as 1960, according to census data, black women were as likely as black men to wed across the race line. (At that time, intermarriage was legal in most states, though Loving v Virginia did not make it legal in all states until 1967.)
So why have black men become so much more likely than black women to wed a person of another race?
The answer comes in two parts: supply and demand. Simply put, there is less demand for black women on the part of potential other race partners. Practically every study of internet dating, for example, has found that black women are the least preferred group of partners in the view of nonblack men.
But lack of demand is not the entire explanation. Even if say, half of nonblack men declined to date or marry black women, there are still more potential nonblack partners for black women than there are black women. Indeed, the internet dating studies confirm that the possibilities for interracial romance are greater for black women than for black men!
A big part of the reason that black women do not intermarry is that they do not want to. In the book I unravel the multifaceted desires and fears that keep black women the most segregated group of people in the nation, but in this brief post I emphasize only one factor: for many black women, to marry across the race line feels like a betrayal of the race, as though they are leaving behind black men who, these women know all too well, are among the most disadvantaged group of people in society. Many successful black women want not to abandon black men, but instead to lift as they climb. For these women, the personal is most definitely political.
Eugene Volokh's Blog
- Eugene Volokh's profile
- 7 followers
