The most highly publicized portion of the complex Patient Protection and Affordable Care Act (which is better called by PPACA since it is really neither) is the individual mandate that imposes a financial exaction on those who do not take out health care. I purposely used the term “exaction” to avoid answering the question of whether this exaction is either a tax or a penalty, because it turns out that a great deal is at stake in the choice of the word. Call this a tax and it has to go through certain Congressional committees. Call it a tax and it upsets the no new tax pledge. So call it a penalty and you can get it through Congress. But once you get into court, and you call it just a penalty, it is less clear that Congress has the power to impose penalties but much clearer that it has the power to “tax and spend” for the general welfare of the United States,” which under a suitably broad interpretation provides some additional cover for the legislation.
The best of both worlds for the President is to let this exaction lead a dual existence, so that the Court sees "tax" when the Congress speaks "penalty". The problem is that each side can hear the other. The courts thus far have not allowed the administration to speak out of both sides of its mouth. It is probable that the Supreme Court will not let it do so in the future either. But occasionally a government slips, as did Jeffrey Zients, the President’s Acting Budget Director, in testimony before Congress. It is a small but telling episode in the longer battle over legislation that should have never passed at all. The betting here is that it will soon be forgotten. I have done my share in writing briefs to overturn the PPACA. The tax/penalty issues were not part of that discussion.
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Dec '10
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
Perhaps the Obama Administration can send the relevant actors to Room 101 of the Ministry of Love until the master the Newthink skill of seeing the exaction as both a tax AND a penalty at the same time.
Nov '10
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
It was a telling episode, and even after watching it a couple of times I couldn't be sure if Zients was trying to be careful and calculating, or if he was simply befuddled and did not recognize the potential impact of his answer. When you begin down the path of lying, it becomes more and more difficult to remember what you said to whom, and you lose track of what the truth was in the first place.
Thank you for all of your efforts to dismantle this monster, Professor Epstein.
Edited on Feb 16 at 9:23amOct '11
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
It's easy, the "extraction" is what ever it needs to be to take money out of my wallet!
Jul '11
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
Exactly. En Francais exactement, which sounds like excrement, because this exacting law is just that.
May '11
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
There are two, and only two, methods by which the government can impose universal health insurance. Either the government pays for the coverage out of taxes, or the government coerces individuals to pay for it in the marketplace. There actually is a difference between the two, although that difference does not lie in the sophistry of calling the method of coercion a tax rather than a penalty.
If there must be universal coverage, then I would choose the mandated marketplace over total government control. I would actually be willing to live with something like Obamacare, if it were the only way to stave off single-payer. But the devil really is in the details here. The much bigger problem with Obamacare is that it is vastly overcomplicated, with thousands of pages in the statute and tens of thousands of pages of regulations to come. Nobody can understand it, and it will inevitably become a cesspool of coruption.
The Constitutional point is interesting, but it is not the core of the problem.
May '10
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
Perhaps the solution to the administration's dilemma is something we might call the Schödinger's Tax. We'll put it inside a box, and according to the Copenhagen interpretation, until we open it again to observe what it is, its dual states remain entangled at the quantum level, and thus it is both a tax and a non-tax.
Whether Joe Biden has the self-discipline to resist peeking into the box is another question entirely.
Jun '11
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
Now, connect this thought with the troubling First Amendment issues over the contraception/abortifacient mandate. If religious organizations (non-profit/tax-exempt) are hit with this penalty, is it really a tax? Will the government tax the tax-exempt? We're about to find out.
Apr '11
Re: Now You See It, Now You Don't: The ObamaCare Penalty Morphs Back into A Tax
" Call this a tax and it has to go through certain Congressional committees"
Since the bill is passed, what does this mean?