How did the Supreme Court uphold the individual mandate under Congress’s taxing power?

In the 2012 case National Federation of Independent Business v. Sebelius, the Supreme Court upheld the Affordable Care Act’s individual mandate by interpreting it as a tax rather than a regulatory penalty.12

Chief Justice John Roberts, writing for the majority, rejected the government’s argument that the mandate was a valid exercise of power under the commerce clause or the "necessary and proper" clause, reasoning that these powers do not allow Congress to compel individuals to engage in commercial activity.3

However, Roberts concluded that the mandate could be reasonably construed as a tax under Congress’s taxing and spending power (Article I, Section 8 of the U.S. Constitution). Although the statute labeled the payment a "penalty," the Court held that it was functionally equivalent to a tax. Under the principle that courts must adopt any reasonable interpretation of a statute necessary to preserve its constitutionality, the Supreme Court upheld the mandate as a valid exercise of the federal taxing power.13