Another constitutional challenge to health care reform

Tax Notes ($) reports a fascinating challenge to the constitutionality of the penalty tax portions of the health care reform.  The paper is authored by a law professor Steven J. Willis and recent law grad Nakku Chungand , and is a bit tedious even for lawyers. But I loved this summary at the beginning:

The healthcare act is unconstitutional, at least to the extent of its tax provisions.³ We focus on Article I, section 9 of the U.S. Constitution, which provides:

No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census⁴ or⁵⁶ Enumeration herein before directed to be taken.

We demonstrate the following:

• The act's penalty provision is styled as a tax. Congress arguably did this to finesse commerce clause problems. We assume it is a tax and therefore focus on the consequences of its being a tax -- what we call the lack-of-health-insurance tax.
• It is not an excise, which need merely be uniform.⁷
• If it is an excise tax, it is not uniform.
• It is not and cannot be a new kind of unenumerated tax, heretofore undetected.
• It is not an income tax.
• If it is an income tax, it is not a tax on derived income, as required by the 16th Amendment.
• If it is a tax, it is a capitation or other direct tax.
• It is not apportioned.
• The apportionment requirement for capitation taxes is alive and well.
• The constitutional objection to the unapportioned capitation tax will be ripe, and taxpayers will have standing to assert it, by April 1, 2014, if not earlier.⁸

How does this relate to wealth management marketing?  We've already published articles on the portfolio management implications of the income tax surtaxes included in health care reform.  If the bill falls on constitutional grounds, those advisories will need amendment.