It’s not a tax

Julie Rovner makes a good point:

So far, the five U.S. District Court judges who have ruled on the merits in the various lawsuits against the Patient Protect Act haven’t agreed on much.

But they do agree on one thing: The penalty for people who don’t get health insurance starting in 2014 is NOT a tax.

That may make things tough for the Justice Department, because arguing that the penalty IS a tax has been Plan B. It’s the argument Justice will pull out of its pocket if it doesn’t prevail on its main argument, which is that the requirement for most people to have health insurance falls under the “Commerce Clause” of the Constitution.

I’m glad they agree, because if you add me, there would be six.

The individual mandate is not a tax. It’s a mandate, with a penalty  if you don’t buy it.  I’m not sure I’d agree to the level that they are “forcing” people to buy insurance, since you can absolutely, positively not buy it – you just have to pay some money. But it’s not a tax.

That’s a pity. Because, as I’ve said before, there’s no reason that the law could not instead have raised everyone’s taxes a little bit and then given everyone who bought insurance a tax credit.  That would be no different, and no more unconstitutional, than any other tax credit or deduction.  Moreover, it would have accomplished the same policy goal as the individual mandate – to discourage healthy people from “gaming” the system.

But because Democrats feared the word “tax” so much, they went with the mandate.  That decision was made for political, not policy reasons. Unfortunately, it’s a decision that may come back to bite them.

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