Now Obama Says the Health Insurance Mandate is a Tax
“Tax: A sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.”
It was a staple of Barack Obama’s campaign that he would not raise taxes on anyone making less than $200,000. During the health care debate, critics claimed he was doing just that with the individual mandate. George Stephanopoulos had a lively discussion with Obama about it back in 2009:
George Stephanopoulos: “Probably the most definitive promise you made in that no one in the middle class will get a tax increase… [some Democrats think the health care bill] is a big middle class tax increase. Do you agree and does that mean you can’t sign it?”
Barack Obama: “Well I don’t agree. I think what they are referring to is… whether or not this is actually affordable. If you’re saying to people ‘you got to get health insurance’ but they can’t actually afford it and they have to pay a penalty if they don’t get it, then that’s a pretty big burden on middle class families. That’s a concern I share, making sure that this is affordable.”
After what amounted to Obama comparing rising health care costs to taxes, Stephanopoulos followed up:
“Under this mandate the government is forcing people to spend money and fining you if you don’t. How is that not a tax?”
A little more dilly dally and Obama finally made his case:
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.”
Never mind that driving is—as the nice lady at the DMV told me—not a right, but a privilege you must earn. There’s also no federal mandate to drive and thereby no mandate for each individual to buy car insurance. Finally, the only car insurance you are required to buy if you choose to drive is liability insurance (in case you hurt others). Regardless, the argument is pretty straight forward; it’s not a tax, simply a requirement to buy health insurance (I’m sure the insurance companies hate that).
Today however, the Obama administration is facing lawsuits from 21 states over the mandate. So how do they defend it? Under the taxing powers of Congress of course. As Robert Pear in The New York Times explains:
“When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.””
The Justice Department claims that its taxing power extends “even for purposes that would exceed its powers under other provisions” of the Constitution. And since the Justice Department expects the government to receive $4 billion a year from penalizing those who don’t buy health insurance, I don’t know what else to call it other than a tax.
Overall, it’s just another case of the Constitution and campaign promises being irrelevant to both the Democrats and Republicans; they just find a way to twist the wording around to justify (or propagandize) whatever they want.
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Still, it’s not a tax. It’s a fine. A fine is punishment for violation of law.
A tax is collection of money levied upon wealth.
Wealth is anything that can be exchanged for anything else. Basically, if you can answer these in the affirmative, you know that you’re dealing with wealth.
• Can it be bought and sold?
• Can it be swapped for an unlike thing?
• Can its (instantaneous) worth get expressed as a value as measured in money?
• Is it wanted by others when and where they are?
A fine is a levy, arbitrarily decided, decreed and enforced upon persons who do not comply with law, e.g., no littering, no smoking.
ObamaCare imposes FINES not taxes.
I agree the penalty for not complying with the individual mandate is a fine. More generally it is a receipt. Whether it’s a tax, fine, or fee, it’s revenue.
Regardless of whether it’s a fine or a tax (I personally think it’s irrelevant), the Obama administration is trying to have it both ways.
I tend to think the easiest way to justify the mandate constitutionally is to tax everybody in the nation a flat amount as a “healthcare tax,” and then give them a tax credit in the amount of that tax if they have qualifying insurance.
However, that isn’t how the bill structured it, nominally.
I think the DOJ is probably trying to ignore some of the political posturing and legislative history, as well as the actual text of the bill, to get this under the taxing power because that IS the best way to use Supreme Court precedents to justify this type of “fine.”
All in all, political grandstanding has created quite a constitutional pickle for the drafters of this bill.
I’m pretty bummed right now about how the whole healthcare debate and drafting process was handled, and figured these issues were going to rear their head and expose some of the cracks.
This kind of reminds me of how FDR sold Social Security as an “insurance program” and not a new tax on the American people. But as soon as it went to court (1960 supreme court case Flemming v. Nestor) the government decided it really was a tax after all and “in no sense a federally administered insurance program”. What was even worse is that they continued referring to it as insurance even after they admitted in court that it was a tax. Will the abuse ever stop?
So you can fine someone for not doing something? That’s a novel approach.