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Just because the penalty is “collected in the same manner as a tax doesn’t automatically make it a tax,” he said.
“What is the parade of horribles that you see occurring” if the court rules it isn’t a tax, Justice Sonia Sotomayor asked.
To which Justice Antonin Scalia joked, “There will be no parade of horribles because all federal courts are intelligent.”
Alito also noted concerns that forcing people to wait until after they’ve paid a penalty on the individual mandate puts people in a position of having to disobey the law to make a claim.
Long, when pressed whether Congress meant the penalty to be a tax or not, said the best interpretation is that it is a tax and subject to the 1867 law.
But he allowed, “I would not argue that this statute is a perfect model of clarity” to chuckles.
Attorney Gregory Katsas also argued that the states should have standing in the case regardless because the requirement that people buy insurance would prompt people now eligible for Medicaid but who have not yet signed up to do so, even though they would not be subject to the tax penalty. That will cost states hundreds of millions of dollars a year, he said.
Several justices seemed skeptical of that line of argument, however.
The first 90 minutes of arguments opened up a rare three days of argument on the sweeping law, with the debate over the constitutionality of the individual mandate itself planned for Tuesday.
It attracted a high-profile audience in the packed courtroom, including Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, and a number of Members of Congress, including Reps. John Larson (D-Conn.), Diana DeGette (D-Colo.) and Tom Price (R-Ga.) and Sen. Jeff Sessions (R-Ala.). Hundreds of people protested for and against the law outside the building.
DeGette, a lawyer herself and a prominent backer of the law, called the 1867 concerns a “sleeper issue” but said she expects the court to rule on the broader case and find a way around it.
Otherwise, she said, she doesn’t think the court would have taken up the case in the first place.