In his reaction to the U.S. Supreme Court’s decision upholding healthcare legislation, Virginia Attorney General Ken Cuccinelli said, “On the liberty side, we won.” I couldn’t agree more.
By treating the individual mandate as a tax, the Court has shone a spotlight on the regulatory state. Taxation requires a transfer from the people to the government, which in turn requires that the government engage in federal spending to achieve its ends. Regulations enacted pursuant to the commerce clause typically require a transfer from one person to another, which allows the government to achieve its ends through private expenditures. These “hidden taxes” empower the regulatory state by cloaking its costs in the shadows.
The difficulty of tracking and quantifying the costs of regulations shields them from significant public scrutiny. Yet we know their costs are enormous. The Competitive Enterprise Institute’s Ten Thousand Commandments estimates that federal regulations cost taxpayers $1.8 trillion annually, which is nearly 50% of budgeted federal expenditures.
When regulatory costs are transparent, however, taxpayers overwhelmingly reject them. An ABC News poll indicated that two-thirds of Americans believed the Supreme Court should throw out the individual mandate – even though its purpose and design are virtually indistinguishable from many regulations that are already on the books.
The transparency of taxation is its greatest limitation. Congress may have virtually unlimited power to coerce the citizenry through taxation. But, when it exercises that power, the people have the ability to hold the government accountable. Decisions that enhance transparency and accountability are a victory for liberty.