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Is it a Penalty or a Tax?

July 18, 2010

While promoting ObamaCare legislation, the President defended the individual mandate to buy health insurance by insisting it was not a tax.  It’s a penalty for anyone who doesn’t make the responsible choice to enroll in a health plan.

Now that the legislation has been signed into law, Attorneys General and Governors of 14 states, including Pennsylvania’s AG and gubernatorial candidate Tom Corbett,  have challenged the constitutionality of the insurance mandate.  In response Obama’s Justice Department has filed a brief in response defending the mandate as constitutional because it is a tax!  Here’s an explanation of the defense from a NYT’s article:

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

It seems clear to me that the insurance mandate is both.  Hey- you got your penalty on my tax!  You got your tax on my penalty!  Unfortunately – unlike delicious peanut butter cups – the mandate tastes like bullshit.

Let’s apply a little common sense to the issue.  Taxation is about commerce.  If you buy or sell something, the government takes a little bit of that transaction as a tax.  If you get paid or pay someone for performing a service the government takes a tax.  The mandate requires you to buy a service OR pay money to the government.  Does that sound like a tax?  No.  It’s a punishment for disobeying the law.  A fine.  Not buying health insurance is a crime.  If you disobey, you will pay.

Does that sound constitutional to you?  Is that the American way?  It is not.  It will never be.

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