Penalty or Tax?

OK, so it’s been a few weeks now since the Supreme Court’s landmark decision on ObamaCare, and I am up to my usual rebellious tricks: namely, not relying on what the pundits, media outlets, bloggers, or politicians have to say about it, but rather, reading the damned thing for myself. I know, it’s a radical approach (namely, using one’s own mind rather than being told what to believe) but what the heck, I live on the edge.

So after reading the opinion, the following phrases come to mind as I reflect on the response from the White House to the Court’s decision to agree with the President, and UPHOLD the constitutionality of this signature piece of legislation:

- Biting the hand that feeds you;
- Looking the gift horse in the mouth;
- Respect you in the morning??? Hell, I don’t respect you now, so why would that change in the morning???

If you listen to the pundits, media outlets, bloggers, and politicians you will come away with the feeling that the Supreme Court went rogue. That both sides made their respective arguments, and the Court decided to come up with some novel way to pigeonhole the law into an obscure portion of the Constitution that allowed for taxation. And when White House spokesman, Jay Carney continues to maintain that the individual mandate is a “penalty” not a “tax”, it does nothing to dispel this misleading spin.

The disingenuous nature of the White House just slays me, and here’s why: The Government (i.e. the White House) researched, briefed, and argued to the Court that there were two separate grounds in which the Healthcare Law could be found constitutional. Specifically, they argued that Congress had power to pass the law under the Commerce Clause, which the Court rejected. In the alternative, the Government that the individual mandate was a valid exercise of Congress’ power to levy taxes. Here’s a quote from the opinion

“According to the Government, even if Congress lacks the power to direct individuals to buy insurance, the only effect of the individual mandate is to raise taxes on those who do not do so, and thus the law may be upheld as a tax.”

Here’s another one:

“Instead, the Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product.”

To support their argument that the individual mandate was simply a tax, the Government pointed out the following characteristics of the Act that were similar to taxation to which the Court agreed:

- Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes;
- The condition of not owning health insurance triggers a tax that requires payment to the IRS;
- The mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income;
- It is paid into the Treasury by “taxpayer[s]” when they file their tax returns;
- It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code;
- For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status.
- The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which . . . must assess and collect it “in the same manner as taxes.”
- It produces at least some revenue for the Government.

That’s right! The taxation argument was raised by the Government. It was not created, or pulled out of thin air by the Court; it was argued by the Government. And on that point, and that point alone, the Court agreed with them and upheld the law. Now, if you’re scratching your head wondering why the court would look for a reason to save the law, you have to understand that there are judicial principles at work. Specifically, the court noted that

“[T]he rule is settled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the Act.”

Under this rule, the Court (or, at least 5 of the 9) felt that even though the taxation argument may not have been the strongest, it was nonetheless a viable argument, and the Court had a duty to rule the way it did. In this regard, the Court went out on a limb, so to speak, in favor of the White House, and what does the Court get in return? A swift kick in the teeth. So there you have it, the Government dressed up the argument like a prom date, and agreed with them, and now the Obama Administration acts indignant at their actions.

But you know what I learned from the Court’s decision about the new Healthcare law that I didn’t know before? I learned that the individual mandate does not apply to “undocumented aliens.” Yep, illegal aliens are not required to pay anything if they don’t have health coverage. So they still get it for free. I also learned that even though the “Tax” is to be collected by the IRS, the Healthcare Law bars the IRS from using several of its normal enforcement tools, such as criminal prosecutions and levies. So everyone is required to pay, and if they don’t, there’s not much the IRS can do about it.

OK, I’ll get off my soapbox now.