NFIB Sebelius Roberts


. . . does not alter their essential character as taxes”).7

Our cases confirm this functional approach. For ex-
ample, in Drexel Furniture, we focused on three practical
characteristics of the so-called tax on employing child
laborers that convinced us the ““tax”” was actually a pen-
alty. First, the tax imposed an exceedingly heavy bur-
den-—10 percent of a company’s net income-—on those who
employed children, no matter how small their infraction.
Second, it imposed that exaction only on those who know-
ingly employed underage laborers. Such scienter require-
ments are typical of punitive statutes, because Congress
often wishes to punish only those who intentionally break
the law. Third, this ““tax”” was enforced in part by the
Department of Labor, an agency responsible for pun-
ishing violations of labor laws, not collecting revenue.  259
U. S., at 36-–37; see also, e.g., Kurth Ranch, 511 U. S., at
780-–782 (considering, inter alia, the amount of the exac-
tion, and the fact that it was imposed for violation of a
separate criminal law); Constantine, supra, at 295 (same).
The same analysis here suggests that the shared re-
sponsibility payment may for constitutional purposes be
considered a tax, not a penalty: First, for most Americans
the amount due will be far less than the price of insur-
ance, and, by statute, it can never be more.8  It may often
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7  Sotelo, in particular, would seem to refute the joint dissent’’s conten-
tion that we have “”never”” treated an exaction as a tax if it was denomi-
nated a penalty.  Post, at 20. We are not persuaded by the dissent’’s
attempt to distinguish Sotelo as a statutory construction case from the
bankruptcy context.  Post, at 17, n. 5.  The dissent itself treats the
question here as one of statutory interpretation, and indeed also relies
on a statutory interpretation case from the bankruptcy context.  Post,
at 23 (citing  United States v. Reorganized CF&I Fabricators of Utah,
Inc., 518 U. S. 213, 224 (1996)).
8 In 2016, for example, individuals making $35,000 a year are ex-
pected to owe the IRS about $60 for any month in which they do not
have health insurance.  Someone with an annual income of $100,000 a
year would likely owe about $200.  The price of a qualifying insurance


be a reasonable financial decision to make the payment
rather than purchase insurance, unlike the “”prohibitory””
financial punishment in Drexel Furniture. 259 U. S., at
37. Second, the individual mandate contains no scienter
requirement. Third, the payment is collected solely by the
IRS through the normal means of taxation-—except that
the Service is not allowed to use those means most sugges-
tive of a punitive sanction, such as criminal prosecution.
See §5000A(g)(2). The reasons the Court in Drexel Furni-
ture held that what was called a “”tax”” there was a penalty
support the conclusion that what is called a “”penalty”” here
may be viewed as a tax.9

None of this is to say that the payment is not intended
to affect individual conduct.  Although the payment will
raise considerable revenue, it is plainly designed to ex-
pand health insurance coverage. But taxes that seek to
influence conduct are nothing new.  Some of our earliest
federal taxes sought to deter the purchase of imported
manufactured goods in order to foster the growth of do-
mestic industry.  See W. Brownlee, Federal Taxation in
America 22 (2d ed. 2004); cf. 2 J. Story, Commentaries on
the Constitution of the United States §962, p. 434 (1833)
(““the taxing power is often, very often, applied for other
purposes, than revenue””). Today, federal and state taxes
can compose more than half the retail price of cigarettes,
—————— —————–
policy is projected to be around $400 per month.  See D. Newman, CRS
Report for Congress, Individual Mandate and Related Information Re-
quirements Under PPACA 7, and n. 25 (2011).
9 We do not suggest that any exaction lacking a scienter requirement
and enforced by the IRS is within the taxing power.  See post, at 23-–24
(joint opinion of SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting).
Congress could not, for example, expand its authority to impose crimi-
nal fines by creating strict liability offenses enforced by the IRS rather
than the FBI. But the fact the exaction here is paid like a tax, to the
agency that collects taxes—-rather than, for example, exacted by De-
partment of Labor inspectors after ferreting out willful malfeasance-—
suggests that this exaction may be viewed as a tax.