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Government

The ongoing ObamaCare debate

Jun. 29, 2012 3:24pm Meredith Jessup

Tax vs. penalty.

In many ways, Nick and my agreements and disagreements mirror the key questions which the Supreme Court considered. If Congress calls a tax a “penalty,” does that ultimately mean it’s not a tax? My opinion is no.

With all due respect to Mr. Levin’s legal team, the argument that “Had Congress determined the penalty provision constituted a tax, it would have labeled it a tax” doesn’t hold much water, especially in a town like Washington — where “revenue raisers” translate into taxes and “investments” are actually expenditures. While it would be ideal for the Obama administration and congressional Democrats to have labeled their penalty as a “tax,” they knew as well as we did the political implications of such a move. And just because Congress “did not judge it as a tax” in theory doesn’t mean it isn’t, in fact, a tax in practice.

This is the conclusion that John Roberts came to in looking at the law as written. Despite the fact that Democrats and Republicans alike claim the mandate penalty was never meant to be construed as a tax, Roberts’ opinion is that as the law is written, the mandate is effectively</> a tax, even though it’s never explicitly called a tax.

I also want to point out some nuanced consequences of your last point, which was this: “If Roberts thought the mandate would have passed constitutional muster as a tax, then he could have struck it down and suggested it be rewritten and re-passed as one.” This is true, and it’s exactly the conclusion liberal Justice Ruth Bader Ginsberg came to in her opinion. If the Congress retains such taxing authority, then the law should be upheld. Why bother looking past that argument at things like the Commerce Clause?

This is an area of the ruling which I think shows Roberts’ judicial finesse. If Roberts thought the mandate would have passed constitutional muster as a tax, struck it down and instead suggested it be rewritten and re-passed as a tax, there would’ve been be no limits placed on the Congress’ authority under the Commerce Clause. Hypothetically, if Roberts hadn’t ruled in the way he did and these limits hadn’t been placed, what authority would states now have to opt-out of ObamaCare’s encroaching provisions? I, too, am not a lawyer, but I’m pretty sure the answer would be… none.

As the bill is written, it’s clear that Congress anticipated that many people would opt-out of the health care mandate — that’s why they included the penalty in the first place. But in anticipating that Americans would opt-out of the mandate, they instituted the penalty which they knew would generate government revenue. And as we all know, government revenue — in any form — is considered to be a tax.

Finally, to close my arguments, I’d just like to draw your attention to this amazingly awesome image from Reason (via Hot Air):

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Comments (7)

rickroland
Posted on June 30, 2012 at 5:48pm
Roberts construed it as a tax by judicial fiat. He re-wrote the law from the bench, which is, not only a big, but a huge abomination of what the judiciary is supposed to be doing. No matter the outcome, it was a bit fat judicial fail on Roberts’ part. One small silver lining is that, as a tax, can be repealed by the Senate with a simple majority (51), which doesn’t bode well for the law continuing to exist with the individual mandate after 20 January 2013. Now, if we could get an amendment to the Constitution which clearly defines the bounds of the Commerce Clause, to prevent both Dems and Reps from trying to pull a fast one on the citizenry, then I will consider the whole ObamaCare fiasco a “lesson learned”.

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Cosmos102
Posted on June 29, 2012 at 10:34pm
We have a Sociopath-in-Chief and he was just given his proverbial rope by the Supreme Court ruling. Let the Left brag and smile about this ruling all they want. Americans need to see them exposed for the Communists they really are. (Side note: Notice how Republicans are handling it without protests and vandalism, the way the Left does when it doesn’t get what it wants) Our day will come in Nov.

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Keep Your Skepticals On
Posted on June 29, 2012 at 5:12pm
Sorry for a 4th post, but think really got me thinking…

The important thing to distinguish is Congresses power to tax is not a power to penalize.

Taxation (fees) is a tool of revenue to fund government facilities and programs. When a tax is sucessful it generates revenue to fund these programs.

Fines and penalties are not a tool to generate revenue, though they often do, for one simple reason. When a penalty or fine is sucessfull it generates ZERO revenue.

This is because the entire intent is, in a perfect world, the behavior ceases completely. In a perfect scenario, no one would pay the penalty to fund the ACA since everyone would participate, so it’s not accurate to call it a tax since, if it were, the more effective the program become the LESS it would be funded, which is not a characteristic of taxation.

All revenue is not tax. Just like a voluntary donation to the federal governemtn would not be considered a tax, it is in fact revenue. Fines and penalties are incidental revenue, not an obligation or duty as collected tax is.

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Individualism
Posted on June 29, 2012 at 5:04pm
Romneycare stop giving Obama credit for copying his work.

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Keep Your Skepticals On
Posted on June 29, 2012 at 4:38pm
Maybe a better way to look at it…

“Go to bed without dinner!” is a penalty and a tax.

“Come help do the dishes!” is a tax, but not a penalty.

This ruling effectively claims “tax” and “penalty” are synonyms, but they are not. There is strong language beyond these two words in the bill that support this differentiation, it just wasn’t recognized by the ruling.

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Keep Your Skepticals On
Posted on June 29, 2012 at 4:31pm
Also:

I think the point is that Roberts had voted to strike down the law it in no way means he would have had to say the law would pass constitutional muster if it was just rewritten as a tax.

It is not a matter of wether they used to word “penalty” or used the word “tax” – which is what the arguement to uphold seemd like it was. It is a matter of intent. You can call fees and penalties a tax, but you can’t call all taxes fees or call all taxes penalties. Fees are paid for a service, penalties are punishment to prohibit behavior.

This is how the “they would have framed it that way” arguement is very important. If you light up a cigarette in a resturant, you pay a “penalty” or “fine” since no one is supposed to do it, ever. If you light up a smoke in a resturaunt and were to pay a “fee”, that means anyone who wants to do it simply has to purchase the priveledge.

Call it nuance, but it was very clearly the intent of the law to punish persons for non-compliance to aim for complete participation. It was never the intent or purpose of the law as written to simply allow any person to purchase special priveledge to not participate for whatever reason.

Think of handicapped parking – the intent is for no one except the handicapped to park there. Of course, if someone was willing, could park there for the convenience and just pay the “fine” as if it were just a “fee”, but that is clearly not the purpose of the law.

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Keep Your Skepticals On
Posted on June 29, 2012 at 3:58pm
Amazingly. Awesome. Image.

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