Here is his argument, simple as I can make it.
The health care mandate forces individuals to purchase insurance. This puts it in the vicinity of the commerce clause, which regulates interstate activity. But not buying health care, Roberts wrote, is more like interstate inactivity. And Congress doesn't have the right to regulate us while we're not doing something.
Here's the Chief Justice explaining in fairly simple English why the mandate cannot survive under the Commerce Clause. The most important line is underlined by me:
Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do. The Framers knew the difference between doing something and doing nothing. They gave Congress the power to regulate commerce, not to compel it. Ignoring that distinction would undermine the principle that the Federal Government is a government of limited and enumerated powers.
After stiff-arming the commerce clause, Roberts turns to the power to tax. Recall that if somebody doesn't buy insurance, the health care law requires them to pay a penalty to the IRS. On the one hand, President Obama has said repeatedly that the mandate is not a tax. On the other hand, just because the president doesn't call something a tax doesn't mean it's not protected under the congressional power to tax.
And that's exactly the conclusion that Roberts reached: Paying a penalty, which is calculated based on your revenue, to the IRS, in a way that raises revenue, is essentially like paying a tax. The individual mandate makes going without insurance "just another thing the Government taxes," he wrote, "like buying gasoline or earning income." And if going without insurance is just another thing the government taxes, it is protected by Congress's constitutional power to tax -- even if the administration doesn't want to call it a tax. Here's Roberts with the money graph:
The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The "[s]hared responsibility payment," as the statute entitles it, is paid into the Treasury by "taxpayer[s]" when they file their tax returns. It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. For taxpayers who do owe the pay ment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which--as we previously explained--must assess and collect it "in the same manner as taxes."
Shorter SCOTUS: To count as a tax under the Constitution, a provision must raise revenue (this does), serve the general welfare (this does), not violate fundamental rights (this doesn't), and not be a criminal penalty in disguise. Ergo: tax. This was the argument that Jack Balkin made in The Atlantic a month ago:
To fall within the tax power, a law must raise revenue. And the mandate
certainly does. The Congressional
Budget Office estimated that the mandate will have raised $17
billion by 2019, and that starting in 2017 it will raise approximately
$4 billion a year ... It also doesn't matter that the real purpose of the tax is to regulate
behavior. Lots of taxes are designed to do just that -- think about
polluters as an example -- and federal taxes on drugs are
designed to keep people from buying or selling them
Last question: If Congress can't regulate inactivity, can it constitutionally tax inactivity? Roberts says absolutely: "The Constitution does not guarantee that individuals may avoid taxation through inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution."
The upshot is that the Supreme Court saved the hallmark of the president's first term by calling his principle accomplishment a new tax on the middle class. Whether that's good or bad news for Obama, you decide. But for tens of millions of people who stand to get health insurance from this law, today's decision is an unqualified positive.