Tax v. Penalty
posted by Tom Patterson
at 8 July, 5:51 PM 0
Is it a tax? Or is it a penalty? Does it make any difference? The debate has raged ever since Chief Justice John Roberts ruled that the money paid to the government in lieu of buying health insurance was a tax and since the government has the authority apparently to do anything so long as it involves a tax, then the individual mandate is constitutional, even though it would not have been otherwise. Romney try to walk the tightrope, saying it was now a tax, in fact a middle-class tax for which Obama deserves criticism, even though in his personal opinion it was still a penalty. Though there may (or may not) be some logic there, it was a political nonstarter. Obama agreed that it was a penalty, no matter what some stupid Chief Justice said. He seemed unaware that this put him in the awkward position of claiming that his own signature initiative was unconstitutional. Apparently that was preferable to admitting that he raised taxes on non-millionaires. But this is all dancing on the head of a pin. It may make a difference to the politicians with the “thing” is called, but economically it doesn’t matter in the real world. Money is taken from the private sector and transferred to government and the hapless citizen has less of his own money to use as he sees fit, no matter what you call it. How could it be otherwise? Obamacare is the most expensive possible way to deliver medical care. It is universally mandated health insurance administered by a private bureaucracy which is regulated and controlled by government. No wonder over 20 fees, taxes and penalties are in the legislation. But those won’t be enough to cover the cost of this colossal bad idea. We’ll all pay and pay some more for our rationed care. Whether we pay penalties or taxes is immaterial.
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