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Source Dormant Commerce Clause Complete Constitutional Law List Matched to this deck.

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0 tracked cards Constitutional Law

Congress required businesses with more than 25 employees either to maintain cyber-insurance coverage or to make an annual payment with their federal income-tax return. The payment is calculated as one percent of payroll up to a fixed cap, is collected by the IRS, and raises revenue for the Treasury. The statute says that a business without insurance has not acted unlawfully and faces no consequence other than owing the payment.
A business without insurance argues that the payment is an unconstitutional penalty rather than a tax. Which statement is most accurate?

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The payment is invalid because Congress may never tax a decision not to engage in commerce. The payment is valid only if the business's servers or employees crossed state lines during the tax year. The payment is more likely a valid tax because it is reported with federal tax returns, collected by the IRS, produces revenue, is modest in amount, and does not make noninsurance unlawful. The payment is necessarily a penalty because it applies only to businesses that decline to buy a product.

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