Is not invalidating
The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.” Pp. (b) Nor can the individual mandate be sustained under the Necessary and Proper Clause as an integral part of the Affordable Care Act’s other reforms. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective. The most straightforward reading of the individual mandate is that it commands individuals to purchase insurance. (b) Such an analysis suggests that the shared responsibility payment may for constitutional purposes be considered a tax. Neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Federal Government “is acknowledged by all tobe one of enumerated powers.” That is, ratherthan granting general authority to perform all the conceiv-able functions of government, the Constitution lists, or enumerates, the Federal Government’s powers. The enumeration of powers is also a limitation of pow-ers, because “[t]he enumeration presupposes something not enumerated.” , at 405. The States thus can and do perform many of the vital functions of modern government—punishing street crime, running public schools, and zoning property for development, to name but a few—even though the Constitution’s text does not authorize any government to do so. This case concerns two powers that the Constitution does grant the Federal Government, but which must be read carefully to avoid creating a general federal authority akin to the police power. Our precedents read that to mean that Congress may regulate “the channels of interstate commerce,” “persons or things in interstate commerce,” and “those activities that substantially affect interstate commerce.” , at 609 (internal quotation marks omitted). Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” U. Our deference in matters of policy cannot, however, become abdication in matters of law. The Act, however, bars the IRS from using several of its normal enforcement tools, such as criminal prosecutions and levies. And some individuals who are subject to the mandate are nonetheless exempt from the penalty—for example, those with income below a certain threshold and members of Indian tribes. On the day the President signed the Act into law, Florida and 12 other States filed a complaint in the Federal District Court for the Northern District of Florida. The District Court determined that the individual mandate could not be severed from the remainder of the Act, and therefore struck down the Act in its entirety. The Court of Appeals for the Eleventh Circuit affirmed in part and reversed in part. The panel unanimously agreed that the individual mandate did not impose a tax, and thus could not be authorized by Congress’s power to “lay and collect Taxes.” cl. According to the majority, the Commerce Clause does not empower the Federal Government to order individuals to engage in commerce, and the Government’s efforts to cast the individual mandate in a different light were unpersuasive. The majority therefore determined that the plaintiffs could not challenge the individual mandate until after they paid the penalty. By 1982 every State had chosen to participate in Medicaid. And because there is a reasonable argument that the Anti-Injunction Act deprives us of jurisdiction to hear challenges to the individ-ual mandate, but no party supports that proposition, we appointed an II Before turning to the merits, we need to be sure we have the authority to do so. Because of the Anti-Injunction Act, taxes can ordinarily be challenged only after, 370 U. The present challenge to the mandate thus seeks to restrain the penalty’s future collection.Each of this Court’s prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service to, a granted power. But, for the reasons explained, the Commerce Clause does not give Congress that power. In pressing its taxing power argument, the Government asks the Court to view the mandate as imposing a tax on those who do not buy that product. (a) The Affordable Care Act describes the “[s]hared responsibility payment” as a “penalty,” not a “tax.” That label is fatal to the application of the Anti-Injunction Act. The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation. And Congress’s choice of language—stating that individuals “shall” obtain insurance or pay a “penalty”—does not require reading §5000A as punishing unlawful conduct. Congress may, for example, “coin Money,” “establish Post Offices,” and “raise and support Armies.” Art. Today, the restrictions on government power foremost in many Americans’ minds are likely to be affirmative pro-hibitions, such as contained in the Bill of Rights. are reserved to the States respectively, or to the people.” U. Our cases refer to this general power of governing, possessed by the States but not by the Federal Government, as the “police power.” See, , 505 U. 144, 181 (1992) (internal quotation marks omitted). The independent power of the States also serves as a check on the power of the Federal Government: “By denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power.” , 564 U. The Constitution authorizes Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. The power over activities that substantially affect interstate commerce can be expansive. “The powers of the legislature are defined and limited; and that those lim-its may not be mistaken, or forgotten, the constitution is written.” , 1 Cranch 137, 176 (1803). Those plaintiffs—who are both respondents and petitioners here, depending on the issue—were subsequently joined by 13 more States, several individuals, and the National Fed-eration of Independent Business. The court affirmed the District Court’s holding that the individual mandate exceeds Congress’s power. Judge Marcus dissented, reasoning that the individual mandate regulates economic activity that has a clear effect on interstate commerce. That statute bars suits “for the purpose of restraining the assessment or collection of any tax.” 26 U. The second provision of the Affordable Care Act directly challenged here is the Medicaid expansion. Federal funds received through the Medicaid program have become a substantial part of state budgets, now constituting over 10 percent of most States’ total revenue. We granted certiorari to review the judgment of the Court of Appeals for the Eleventh Circuit with respect to both the individual mandate and the Medicaid expansion. The Anti-Injunction Act provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any courtby any person, whether or not such person is the per-son against whom such tax was assessed.” 26 U. contends that the Internal Revenue Code treats the penalty as a tax, and that the Anti-Injunction Act therefore bars this suit.We have thus applied the Anti-Injunction Act to statutorily described “taxes” even where that label was inaccurate. Congress can, of course, describe something as a penalty but direct that it nonetheless be treated as a tax for purposes of the Anti-Injunction Act. The individual mandate, however, is not in subchapter 68B of the Code.Nor does any other provision state that references to taxes in Title 26 shall also be “deemed” to apply to the individual mandate.
That interpretation is consistent with the remainder of §5000A(g), which instructs the Secretary on the tools he may use to collect the penalty.
See, §§860(h)(1), 6324A(a), 6601(e)(1)–(2), 6602, 7122(b). There would, for example, be no need for §6671(a) to deem “tax” to refer to certain assessable penalties if the Code al-ready included all such penalties in the term “tax.” Indeed, ’s earlier observation that the Code requires assessable penalties to be assessed and collected “in the same manner as taxes” makes little sense if assessable penalties are themselves taxes.
In light of the Code’s consistent distinction between the terms “tax” and “assessable penalty,” we must accept the Government’s in-terpretation: §6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes.
The Medicaid expansion thus violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion. Congress would have wanted the rest of the Act to stand, had it known that States would have a genuine choice whether to participate in the Medicaid expansion. Even absent §1303’s command, the Court would have no warrant to invalidate the funding offered by the Medicaid expansion, and surely no basis to tear down the ACA in its entirety.
A State could hardly anticipate that Congress’s reservation of the right to “alter” or “amend” the Medicaid program included the power to transform it so dramatically. (c) The constitutional violation is fully remedied by precluding the Secretary from applying §1396c to withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion. The other provisions of the Affordable Care Act are not affected. But given the majority view, she agrees with finds the withholding—not the granting—of federal funds incompatible with the Spending Clause, Congress’ extension of Medicaid remains available to any State that affirms its willingness to participate.The Affordable Care Act expands the scope of the Medicaid program and increases the number of individuals the States must cover. When Congress threatens to terminate other grants as a means of pressuring the States to accept a Spending Clause program, the legislation runs counter to this Nation’s system of federalism. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.