Constitutionality Of Obesity Mitigation Fee
Constitutionality of an Obesity Mitigation Fee
At issue is whether the potential bill containing an “obesity mitigation fee” on food producers whose revenue from the sale of unhealthy foods exceeding 20% of total revenue violates Congress’s taxing and spending powers. Article I Section 8 gives Congress the “power to lay and collect taxes.” The taxing power may be used to tax activities that it does not have power to regulate under its other powers. Furthermore, the constitution contains explicit limits to the taxing power: (1) Congress may not tax exports (Art. I Sec. 9), (2) indirect taxes may not discriminate among the states (Art. I Sec. 8), and (3) direct taxes must be levied in such a way that each state’s proportion of the total revenue produced by the tax is the same as each state’s proportion of the total population of the nation (Art. I Sec. 2) The “obesity mitigation fee” (OMF) does not trigger the explicit limits of the taxing power. The OMF is an indirect tax since it is triggered by the specific circumstances of selling a prohibited amount of highly processed foods and the cost can be passed to consumers through higher prices and it does not discriminate among the states. There are judicial limits on the taxing power but they are less clear and harder to apply. In National Federation of Independent Business v. Sebelius, Chief Justice Roberts noted that “there comes a time in the extension of the penalized features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment.” Additionally in NFIB, Chief Justice Roberts noted that his decision “need not decide the precise point at which an exaction becomes so punitive that the taxing power does not authorize it.” The holding in NFIB does not outline a bright-line rule or clear test for distinguishing a tax from a penalty but it does rely on three “practical characteristics” that distinguish the
At issue is whether the potential bill containing an “obesity mitigation fee” on food producers whose revenue from the sale of unhealthy foods exceeding 20% of total revenue violates Congress’s taxing and spending powers. Article I Section 8 gives Congress the “power to lay and collect taxes.” The taxing power may be used to tax activities that it does not have power to regulate under its other powers. Furthermore, the constitution contains explicit limits to the taxing power: (1) Congress may not tax exports (Art. I Sec. 9), (2) indirect taxes may not discriminate among the states (Art. I Sec. 8), and (3) direct taxes must be levied in such a way that each state’s proportion of the total revenue produced by the tax is the same as each state’s proportion of the total population of the nation (Art. I Sec. 2) The “obesity mitigation fee” (OMF) does not trigger the explicit limits of the taxing power. The OMF is an indirect tax since it is triggered by the specific circumstances of selling a prohibited amount of highly processed foods and the cost can be passed to consumers through higher prices and it does not discriminate among the states. There are judicial limits on the taxing power but they are less clear and harder to apply. In National Federation of Independent Business v. Sebelius, Chief Justice Roberts noted that “there comes a time in the extension of the penalized features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment.” Additionally in NFIB, Chief Justice Roberts noted that his decision “need not decide the precise point at which an exaction becomes so punitive that the taxing power does not authorize it.” The holding in NFIB does not outline a bright-line rule or clear test for distinguishing a tax from a penalty but it does rely on three “practical characteristics” that distinguish the