Paul Revere by Cyrus Dallin, North End, Boston

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Friday, June 29, 2012

Is The Mandate a Tax?




Is The Mandate a Tax?


"There’s a technical and a subjective answer. The technical answer is yes. The Court found that, by requiring people to either buy insurance or pay money to the IRS, the mandate functions like a tax, and is thus a valid exercise of the taxing power.

'The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,' the controlling opinion reads. 'Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.'

But the taxing power also justifies other Obama-era measures like his 2009 cigarette tax — an incentive for people to quit smoking — and only the most fervent anti-tax activists characterize that as a 'tax increase on the American people' or the middle class.

The mandate is even less direct than the cigarette, and both the Court and Democrats have been clear that the intent is not to raise revenue by raising people’s taxes, but to provide people an incentive to buy subsidized health insurance. In other words, unlike income and payroll taxes, it’s a penalty.

And indeed, the Court relied on this more subjective understanding of the mandate’s intent in deciding to rule on the merits of the case at all. A 19th century law called the Anti-Injunction Act protects the government from challenges to taxes that have yet to be assessed. But even though the mandate doesn’t take effect until 2014 — and even though the majority declared it a valid use of the taxing power — they held that the Anti-Injunction Act did not apply.

The Anti-Injunction Act applies to suits 'for the purpose of restraining the assessment or collection of any tax,' the Court determined. 'Congress, however, chose to describe the ‘[s]hared responsibility payment’ imposed on those who forgo health insurance not as a ‘tax,’ but as a ‘penalty.’ … There is no immediate reason to think that a statute applying to ‘any tax’ would apply to a ‘penalty.’ Congress’s decision to label this exaction a ‘penalty’ rather than a ‘tax’ is significant because the Affordable Care Act describes many other exactions it creates as taxes.'

Intent matters. And the Court essentially held that the law’s authors created something that functions like a tax, but serves the purposes of a penalty."

**********


"The health insurance mandate upheld today by the Supreme Court will impact roughly 26 million Americans, or 8 percent of the population, according to a recent study by the Urban Institute and an independent analysis by MIT economist Jonathan Gruber, who advised both Mitt Romney and President Obama on health care law.

Those individuals will be required to obtain coverage or pay a fine starting in 2014.

Not everyone will be forced to pay out of pocket, however. Here’s how it breaks down – courtesy of the Urban Institute:

– 8.1 million will be eligible for free/close-to-free insurance through expansion of Medicaid under the law.

– 10.9 million will have to purchase coverage but receive subsidies to help with premiums

– 7.3 million (2 percent of population) will not be eligible for any assistance and will simply have to buy a plan or pay the penalty.

Look at it the other way, the mandate will not directly impact most Americans. Two hundred fifty million out of 268 million non-elderly folks, or 94 percent, of Americans already have insurance coverage through an employer or the government and don’t face the penalty or having to buy a new plan." ---ABC News



 "...the ruling is both a political and a constitutional landmark. It bestows a measure of validation on President Obama's legislative achievement after two years of relentless attacks and casts a new light on Chief Justice Roberts—a George W. Bush appointee whom some Democrats had pegged as a Republican partisan—reaching across the ideological divide even while reinforcing some long-standing conservative principles." --Wall Street Journal



Who's Exempt From the 2014 Mandate?


The mandate is not a tax on the middle class or anyone else who is responsible and has health insurance coverage.  It is a tax penalty for those who act irresponsibly and do not purchase health insurance and use the emergency room of a hospital while everyone pays for that service.  Those who cannot afford coverage will receive help.

I thought conservatives were for individual responsibility.  This forces people to be responsible and not pass the onus of providing health care to people who do the responsible thing and obtain health coverage.


Last note:

Here are a couple of observations by the loyal opposition.  The apocalypic language these two characters use illustrates the extent of their infantile colic in extremis, not the end of America.

"This is the greatest destruction of individual liberty since Dred Scott. This is the end of America as we know it. No exaggeration."
— benshapiro (@benshapiro) June 28, 2012

Yeah, right ben.  No exaggeration. 




"Republican from Indiana Mike Pence, a gubernatorial candidate, “likened the Supreme Court’s ruling upholding the Democratic health care law to the Sept. 11 terrorist attacks, according to several sources present” reported Politico. In other words, it was an act of terrorism and ranked up there with killing several thousand people."

Really.  They need to go to a quiet room and suck on a binky.


Michael Savage, a much admired conservative radio hate jockey had this to say today about Chief Justice Roberts:

"Let's talk about Roberts," Savage said. "I'm going to tell you something that you're not gonna hear anywhere else, that you must pay attention to. It's well known that Roberts, unfortunately for him, has suffered from epileptic seizures. Therefore he has been on medication. Therefore neurologists will tell you that medication used for seizure disorders, such as epilepsy, can introduce mental slowing, forgetfulness and other cognitive problems. And if you look at Roberts' writings you can see the cognitive disassociation (sic) in what he is saying..."


We can always count on Savage to say the most jaw-dropping, cringe-inducing moronic rant.  But today, the darling of the conservatives outdid himself by mocking the Chief Justice's illness and suggesting he's lost his mental abilities.  Because in the oatmeal gruel that passes for his brain, that's the only reason for Roberts' decision.

Andrew Breitbart would have been so proud.  This is the sort of political discourse he loved. 

Question:  Has Bill O'Reilly apologized yet for being an idiot?

O’Reilly predicted that the law would be struck down: “It’s going to be five-to-four. And, if I’m wrong, I will come on and I will… apologize for being an idiot.”

37 comments:

Les Carpenter said...

Interesting. Cute baby too...

dmarks said...
This comment has been removed by the author.
dmarks said...

Concerning the Ben Shapiro quote. He might have been right had the Court supported a certain interpretation of the Commerce Clause that many thought would be upheld. But it did not.

I'm not sure what to make of yesterday's Supreme Court Decisions. While I think about this today, I will polish the trophy I recelved for valor during the Civil War, and afix the Purple Heart I earned in the Battle of Helms Deep to my jacket.

skudrunner said...

This is a flawed law and does more harm than good, unless you are in poverty. Healthcare needed to be reformed just as tax law. The normal way our government does something is make things so difficult and expensive that it is designed to fail. Instead of trying to provide reasonable insurance to those who don't have it, the tax the middle again to support the poor.

This does affect the middle class more than any other group. It is the poor and middle class who smoke cigarettes, it is the middle class who will have to pay for insurance or pay the fine. As you stated the poor are taken care of, the rich take care of themselves and the middle class takes the brunt for both groups but they always have no matter which elite group is in charge.

Companies decide to not pay for insurance so the employee has to either pay or pay the TAX. They still do not have insurance so the taxpayer foots the bill.

This helps Obama's base and that is all because most large companies and Unions are exempt.

Hopefully this will re-energize the conservative base to put a leader in office for All Americans not just a chosen few.

Anonymous said...

I suppose Romney is the man for all the people

dmarks said...

Skud said; "This is a flawed law and does more harm than good, unless you are in poverty."

Umm. To me, saying that a program helps the poor is actually an argument for a program, not against it.

"This helps Obama's base and that is all because most large companies and Unions are exempt."

This is indeed a kind of corruption. And by exempting his friends from the program, Obama sends a message that it is something bad.

Paul said...

We pay twice as much as any other country for health care, yet, we are ranked 37th in health care.
One big reason we cannot compete, is those other countries do not put the expense of health care on the employer.
It's not rational, that our corporations are against taking the expense of health care off their backs.
What is driving that irrational position by our employers?

KP said...

"Look at it the other way, the mandate will not directly impact most Americans. Two hundred fifty million out of 268 million non-elderly folks, or 94 percent, of Americans already have insurance coverage through an employer or the government and don’t face the penalty or having to buy a new plan." ---ABC News"

The first thing I thought of after reading that quote was "Then why do we need a 2700 page bill that is 2.5 times as long as War and Peace? Why not simply insure the poor and improve other areas?"

I realize it is more complicated than that but I also know there is a better way to reform health care than Obamacare.

One thing over looked in many discussions: most physicians dislike the bill. If you want good care it is important to have a happy doctor; and I don't mean just money. We are going to have doctors and their staffs who are overworked and overwhelmed. The quality of care will absolutely, definitely go down because of that. It will also go down as government tells insurance companies what tests and drug treatments are to be reimbursed and what tests are not, and how long care can last or what type of rehab for how many days. That removes some of what make the best doctors the best doctors; that is, their deep experience coupled with the art of medicine.

skudrunner said...

"Umm. To me, saying that a program helps the poor is actually an argument for a program, not against it."

They are already taken care of so the only people this bill hurts are the middle class.

The statement that no one making under 250K will have a tax increase, not a dime. So far we have cigarette tax increase, now healthcare tax. So much for that lie.

This whole bill is far to complicated and has far to many excepted groups. If it is good for some why isn't it good for all including our royalty politicians.

Anonymous said...

Obama has destroyed this country in 4 short years.We cannot give him 4 more

a nice anonymous said...

Anonymous,

Tell us how Mr. obama has "destroyed" this country.
\
Facts, please, not feverish rantings.

Republican Racism said...

Destroyed?
We are all still here and better off than we were 4 years ago.
You just cannot stand a black man being President of the United States.

The Griper said...

all i can say is "Congratulations, Shaw, you now have the totalitarian government you have fought so hard for all of these years. i hope you will enjoy the fruits of your victory in the coming years."

Republican Racism said...

Griper,
Get educated. Start with a dictionary.
Get a grip on reality.
Have you always been a reactionary fool?

skudrunner said...

RR
You may be better off and good for you. Don't tell the millions of unemployed that are caught in the Obama recession with no end in sight.

Can't you do better than saying if someone doesn't like the incompetent Obama it is because he is black. That excuse has worn itself out and you should be able to do better.

Les Carpenter said...

KP, Well said.

The Griper said...

RR,
a fool i may be, this i'll admit. and if found to be a fool i have only myself to blame.

now, will you explain your ignorance that you have shown so eloquently here this day?

Paul said...

KP,

Most doctors don't appreciate the way they are being treated by insurance companies. Doctors are dictated to by insurance companies. The result is insurance companies are deciding what treatment (what they will pay for) a patient gets.
It is a small % of people, but that small % of the population, are causing huge expenses for all of us.
Then lets put more people to work, as doctors. Another job producing bill.

KP said...

I hear what you are saying Steve. I have an thirty year initmate experience with this subject. I said somrthing similar on SF's blog last week:

What happens to costs when a system is put in place that is intended to "insure" you against loss, turns into over untilized care?

Here is an example of a system run amok: patient is over weight, will not excericise and eats crap (maybe drinks too much) and that results in:

Blood Pressure too high? Take this Linsinopril and Hydrochlorothiazide.

Cholesterol too high? Here is some Zocor.

Developing diabetes? Lets treat your pancreas and liver with a long list of drugs because you refuse to alter lifestyle.

Sex not so good or no longer is an option? Lets fix that with this.

Who is paying for this BS? This is our system. This is what was just expanded as a tax. It results in slow, early death that is extremely expensive. Our system is under funded and over ultilized.

As you say, the last two years of end of life care is more expensive than all those before it, often because of our choices.

My best advice, and I am paid to give it professionally, people better get their selves together and practice prevention. There will not be enough doctors to treat you. Start treating yourself.

Paul said...

KP,

"prevention" is the key and part of what's necessary to confront the problems you described, but people who do not have insurance show up in emergency rooms, at ten times the cost to the system. We pay for that, and it would be cheaper just to pay for them to see a doctor, to practice preventative (proper) care.
Changing the habits of our culture to be healthier is a great idea, that will take decades.
Meantime what do we do to pay for preventative care? Seem to me it's cheaper to pay for the preventative care, certainly cheaper than emergency rooms.
If we decide strictly by costs, it's cheaper to make sure people see a doctor.

KP said...

@Steve -- we agree.

Silverfiddle said...

Yes. It's a tax. The mullahs in black robes said so.

Government has spoken!

Jerry Critter said...

It is a tax...that the vast majority of people will not have to pay.

Silverfiddle said...

We will all pay Jerry.

I know you understand that nothing is free.

Jerry Critter said...

Just what not free stuff are you talking about, SF?

Paul said...

KP,
ACA gives access to doctors for 30 million more Americans. Republicans don't even offer an alternative to ACA, nor do they have a plan on how tens of millions of Americans could get access to a doctor.
So we are back to the arguments of years ago.
Tort reform - the CBO says tort reform at best would be 2-3% of our health care costs. No solution there.
"Death panels" described by the left as insurance companies, described by the right as government. Someone has to set limits. Which is more open to protecting individual (patient) rights?
Costs. Yes, universal care like Canada, or England put caps on costs. That has not put their suppliers into bankruptcy. The free market argument dies when Americans pay twice as much as other countries for similar care, but get worse (USA-37th in health care) results. What happened to the free market supporters claiming free markets would bring down the costs?
Communal taxation - to better all society - for that which individuals alone cannot afford (schools, roads, libraries, police, fire, etc) has had wildly tremendous positive effects, which for generations has put America on top in almost all categories. We have lost ground in most of those categories, since we started cutting taxes and building multi-trillion dollar debts, because of those tax cuts. America and its high standards (which we should support) are more expensive.
Insurance. To spread the costs making a system viable. What about the sick people denied insurance under the free market system? A system that puts profit above servicing people, is not a viable system. Try getting insurance form a private provider, if you have diabetes, a heart condition, or other ailments. You are denied. Even if you have money, you will be denied coverage and must enroll in a State financed system to get coverage.
I have no kids, but MUST pay school taxes. Why? For the betterment of the whole society.
Vouchers (for education, health care, etc.) are useless, if they can buy nothing. Not to mention that voucher money, is tax money.
I would certainly change what most would call my liberal thinking, if Republicans come up with viable, effective plans that would service people and solve cost problems. To date, they have not.

Shaw Kenawe said...

John Adams, Founding Father and 2nd President; Thoughts on Government, 1776:

“Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men."


Without affordable health care no citizen can attain any form of happiness nor safety, nor prosperity.

The ACA is not perfect, but it is a first step in realizing the ideals of our Founding Fathers.

KP said...

@Steve
Progressives are not evil, nor are conservatives. Some on the far left and far right are not helpful; maybe even hurtful; and some of them (both sides) have found their way into office. But lets not stain Republicans or Democrats that way. About 70-80% of us agree on most things. This is not the Civil War; this is not the Bloods and Crips, despite the red and blue state BS. Most states are purple.

John Patterson said...

...passed by Congress, signed by the President and validated by the Supreme Court... so what ever happened to Republicans' claim to "The Rule of Law." They seem virtually lawless on this one. Especially the Governors who refuse to implement this law.
Here's a framing suggestion to anyone who is in a position to use it, when debating these issues between now and November.
WE want to repeal Citizens United... THEY want to repeal Healthcare for Millions.
Not "Obamacare" or the "ACA" but "Healthcare for Millions".

Les Carpenter said...

Governors can opt out of the expansion of Medicare. Supreme court decision allows them to do so without penalty. Or am I missing something?

Jerry Critter said...

"WE want to repeal Citizens United... THEY want to repeal Healthcare for Millions. "

Excellent distinction between Democrats and republicans!

Jerry Critter said...
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Shaw Kenawe said...
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Paul said...
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Silverfiddle said...
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Jerry Critter said...
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Silverfiddle said...
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