The Tax Is Now A Penalty, Again



The five-justice majority argued that, while the fine imposed by the law for not buying health insurance would otherwise be unconstitutional, the fine is actually legal under Congress’ authority to tax. 

Ergo, the fine is officially a “tax” in the eyes of the court. The law stands. 

But in a case of biting the hand that feeds, White House Press Secretary Jay Carney said Friday the fine is still just a “penalty.” 

Calling it a “tax” causes obvious political problems for the White House. Obama fought that label vigorously when selling the bill in 2009. 

Carney went on to say Friday that the “penalty” will affect only about 1 percent of Americans, those who refuse to get health insurance.

“It’s a penalty, because you have a choice. You don’t have a choice to pay your taxes, right?” Carney said. 

Read more: here.

Well, none of us should be surprised that members of this administration are unfamiliar with the taxing and penalties processes.  You see, if you don’t if you don’t pay your taxes, the IRS will fine you.  This is way different than the law that states if you don’t buy insurance, the IRS will fine you. 

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32 Responses to The Tax Is Now A Penalty, Again

  1. kim2ooo says:

    Soooo…Now that the Presidents man has corrected Justice John Roberts – Let’s go back to court.

    Mr Obama has to defend it as either a “penalty” or as a “tax”.

    Mr Obamas “Forward” – is “Barack-ward”

    • suyts says:

      I wish it were that easy. The SCOTUS doesn’t care how Obama phrases it. They’ve spoken. Worse, the minority descent was correct. The individual mandate is key to making Obamacare work. Without the mandate, things would fall apart very quickly and the collapse of our entire health care system would be emanate. It’s essentially and all or nothing proposition. A quick repeal next year or we’re going to have it whether we want it or not.

      • kim2ooo says:

        Hiyas ๐Ÿ™‚
        I dono…my understanding that the “mandate” as a “penalty” – would be / was seen as “unconstitutional”?

        If Mr Obama insists it’s a “penalty”…instead of a”tax”. – It’s unconstitutional…

        This was what the Justices were reviewing… The Constitutionality of an imposed “penalty”.

        Justice John Roberts let Obamacare stand because HE changed the textual meanings / wording of “penality” to mean “tax”.

        As a “penalty” it’s unconstitutional – even Justice John Roberts says
        “If the individual mandate is targeted at a class, it is a class whose commercial inactivity rather than activity is its defining feature.” Nat’l Fed. of Ind. Business v. Sebelius, 567 U.S. ___ (2012).”

        Click to access 11-393c3a2.pdf

        “The mandate primarily affects healthy, often young adults who are less likely to need significant health care and have other priorities for spending their money. ”

        If the Individual Mandate is a tax, Congress may be on fairly firm constitutional ground. Article 1, Section 8 of the Constitution states:

        โ€œThe Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence [sic] and general Welfare of the United States.โ€


        Mr Obama can not have it both ways!

        PS I got my brother to send Mr Romney my money, yesterday.

      • suyts says:

        Hiyas back! ๐Ÿ™‚

        All of what you state is correct. However, it is an argument which cannot be pursued. In fact, I’d much rather be shackled with the health care law than the argument that it couldn’t stand only because it’s a penalty rather than a tax.

        The ruling of Justice Roberts is much more damaging and carries so much more implications than just this one law. Overturning the law is less important than overturn the opinion. Roberts has committed a horrible injury to the history and legacy of this nation and the sacrifices of the millions of people before him. He’s a disgrace to the court and this country. See, my next post. I’m almost done with it. I think it rather good in thought, but, my lack of eloquence blunts the clarity.

        • kim2ooo says:

          I understand what you are saying and have read your article and links. I agree.

          I have to chose my battles…just as everyone must.
          The most dangerous legislation that my age group sees, toward individual freedoms / liberties is that of The Commerce Clause being used to “mandate” behaviors.

          We’ve already seen the attempts by Democrats / leftist / progressives to use the Commerce Clause..(.i.e curly bulbs )….to “mandate” behaviors. Without evidence of claims made.

          What Justice Roberts has done is ruled that “unconstitutional”.

          I agree with you, that Justice Roberts has opened the door to “mandate” by TAX.

          BUT a TAX is a hard sale / casts a large shadow for any Congress…. AND The Commerce Clause, used to “mandate”, has little if any.

          As far as I’m concerned, Justice Roberts, knowingly or not, slammed the door on the most dangerous misuse of legislation. The Commerce Clause to mandate behavior.


        • suyts says:

          I do agree that the commerce clause has been neutered. …… for now. The other 4 of the assent maintained that it was allowable under the commerce clause. Interesting days ahead.

      • Greg locke says:

        James, see my comment on the Tax is Now a Penalty post. With all due respect, I think you fail to recognize the beauty of Roberts’ opinion. He guts the Commercde Clause, forces the left to admit it when they levy taxes, and has preserved the integrity of the Court to fight another day without being derided as partisan hacks. While I hate the ACA as much as you (it is an abomination and could bankrupt this country), this decision will invigorate the Right, and give Romney a fighting chance at winning the election. Of course, if Mr. Obama is re-elected, well, in that case I’m glad I’m in my 60s and won’t live to see the rubble.

        • Jim Masterson says:

          Because of your age (I’m in my 60s too), you may see the health care system deny you simple pain meds and procedures. It will be a h*ll of a way to go–with or without rubble.

      • leftinbrooklyn says:

        ‘ The individual mandate is key to making Obamacare work. Without the mandate, things would fall apart very quickly and the collapse of our entire health care system would be emanate.’

        I think it falls apart very quickly even with the mandate. Just don’t see a new tax being enforced on those already unemployed, on welfare, and or on food stamps. The very groups that are most likely to not have insurance through their jobs. Do you really believe this White House is going to enforce it?
        Naw, those of us do currently pay taxes will be footing an ever increasing bill for someone else’s healthcare. Until it collapses under the weight of it’s own debt. But by then, the wealth will be spread. Spread so thin no one can find it. Certainly not the poor.

  2. DirkH says:

    Worst thing is, if you refuse the tax or the penalty, law enforcement will throw things at you.

    • suyts says:

      That’s a short-sighted interpretation. The author forgot to look at the converse of the argument. Roberts essentially held that the federal government can compel us to do anything they wish, as long as they attach a tax to it.

      • Greg locke says:

        James, while what you say is true, you must agree that taxes are very unpopular with the electorate at all times and in all places. What Roberts has done is force the left to admit that they are fleecing the citizens of this country to pay for their silly programs, rather then hiding behind regulation of “commerce”, a concept most don’t understand. I think Congress will balk at saying, “here’s a new program for you, and by the way we’re raising your taxes to pay for it.” The ACA decision takes away a tool the the left has relied for years–telling the idiots that they’re getting something for nothing just because the guvmint is providing it.

      • suyts says:

        Greg, I would readily agree that this places the argument squarely where it needed to be, but I think the cost was too dear. Yes, this will invigorate the right, and conservatives will likely win this election. But, the fact that taxes are unpopular brings me little solace. I don’t know how many times taxes have been initiated and raised in this country, but the occurrence is frequent. The body politic of this country regard taxes as a way to modify behavior already.

        • Greg locke says:

          Now you’ve touched on one of my true pet peeves–the use of the tax code as a Skinnerian behavior modification scheme as opposed to a a mechanism for generating revenue for legitimate government functions. Yes, that is a horrible problem that has resulted in a tax code of thousands of pages. But this, I think, supports my earlier point–much of the tax raising you rightly decry has been masked and hidden as “regulation”, or “investment.” I hope that now Congress will be more and more forced to be clear when they are raising taxes. They will then pay the political price of that action, which is how the Founders intended the system to work.

        • suyts says:

          Yes. It’s also an issue which drives me up a wall. I’ll have to give this some more thought. The problem is most of us think about how to best apply this ruling, but, we all know that once the feds truly come to understand how to apply it, the worst legislation will spring from it.

          One step at a time, I suppose.

  3. LLAP says:

    “To understand healthcare in America, you have to think about bananas”:

  4. kelly liddle says:

    โ€œItโ€™s a penalty, because you have a choice. You donโ€™t have a choice to pay your taxes, right?โ€ Carney said.

    To me this is a very strange argument because there are many choices that can be made not to pay tax. EG. don’t work, invest money overseas and leave it there, invest in US in a business that recieves subsidies (ok that one still techically pay tax but it is less than money recieved). So thinking logically Tax or Penalty are synonyms.

  5. kelly liddle says:

    Also forgot about the tobacco and alcohol users penalties.

  6. philjourdan says:

    You do have a choice in what you pay in taxes. it is called deductions. Carney is just FOS. It is a tax.

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