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When is a Tax Not a Tax?

When it is created by Mitt Romney of course. On Monday, Romney spokesperson Eric Fehrnstrom said that Romney did not agree with the Supreme Court ruling that the individual mandate was constitutional because of the government’s right to create taxes. “The governor believes that what we put in place in Massachusetts was a penalty, and he disagrees with the court’s ruling that the mandate was a tax.” Pretty clear, no?

Romney only took two days to do a complete flip-flop, declaring Wednesday that the individual mandate is a tax. The “majority of the court said it’s a tax, and therefore it is a tax. They have spoken. There’s no way around that. You can try and say you wished they had decided a different way, but they didn’t. They concluded it was a tax. That’s what it is.” Also clear, but completely contradicting what his spokesperson said Romney believed just two days ago.

So, if the individual mandate is a tax, does that mean that Romney raised taxes in Massachusetts when he imposed an individual mandate? Is he one of those “tax and spend” socialists that conservatives love to hate?

But both of Romney’s contradictory opinions are completely missing the point. It simply doesn’t matter if the individual mandate is a tax or not. Calling it a tax is just a stupid label. The simple truth is that — barring a single payer system — the individual mandate is a very good idea.

If someone doesn’t have health insurance and gets sick or has an accident, they are typically going to end up at an emergency room. Emergency rooms are very expensive ways to treat people, but they are the only option for someone who doesn’t have insurance because they must treat you even if you can’t pay. But if you can’t pay, who pays for it?

We all do, of course. We pay for it in higher insurance rates and in increased taxes. So the individual mandate just says that if you choose to not have health insurance, they you have to pay a penalty to the IRS to cover the fact that you are likely to cost everyone else money. It doesn’t matter if you call it a tax or not.

Of course, it did matter to the Supreme Court — they were trying to decide whether it was constitutional, and the government does have the right to impose taxes to make people pay for things. And collecting the penalty through the IRS makes it close enough to a tax to make it constitutional.

Of course, the only reason it matters to Romney is because Republicans have all signed a pledge that says that taxes are bad. All taxes are bad. Even taxes that pay for things that everyone likes. Of course, that’s pure crazy. If we dropped taxes to zero, our country would fall apart in an instant.

But if Obama raised taxes (by imposing an individual mandate), then the Republican orthodoxy says that he is bad (and a socialist who wants to take your money and give it to someone else).

But if that is true, what does that make Romney?

UPDATE: Romney’s response to the Supreme Court decision, and other missteps, is even pissing off other conservatives. Some (including Rupert Murdoch) are even calling for Romney to replace his campaign staff.



  1. Jonah wrote:

    Thursday, July 5, 2012 at 7:15 am | Permalink
  2. Arthanyel wrote:

    Even then, as was said elsewhere here, the MANDATE is neither a tax nor a penalty. The fine for not buying insurance is a penalty. And since the point of the fine is that since those without insurance are treated in ER’s at our expense, and thery refuse to pasy for themselves, why is it unreasonable to make them pay something?

    Oh, that’s right – its because Obama did it. There is literally NO other reason.

    Thursday, July 5, 2012 at 8:22 am | Permalink
  3. Hassan wrote:

    Can government take tax with no service in return?

    Thursday, July 5, 2012 at 10:07 am | Permalink
  4. Same Anonymous Guy wrote:


    Think of the income tax. 😉

    Thursday, July 5, 2012 at 1:36 pm | Permalink
  5. thelise wrote:

    wait, the majority of the court did NOT say it was a tax. Ginsburg, Kagan, Sotomayor, and Breyer said that Obamacare was constitutional under the Commerce Clause while Roberts was the only one who said that it was valid under the federal government’s taxing authority. The other four said Obamacare was invalid under the Commerce Clause AND in their joint dissent said that calling it a tax would be rewriting the law, so it could not claim to be a tax either. Only ONE justice said that Obamacare was a tax, and that’s nowhere near a majority.

    Thursday, July 5, 2012 at 2:02 pm | Permalink
  6. Dan wrote:

    Doesn’t matter why, but that he did vote to validate the Heritage Foundation conservative think tank law. Personally, I quite enjoy my one payer and government run plans, and oh, yeah, income tax pays to invade places for oil, and pay military pensions, like mine. thanks

    Thursday, July 5, 2012 at 7:27 pm | Permalink
  7. Does Romney think the law is unconstitutional? Because the Supreme Court says it’s constitutional, so that must make it constitutional, right?

    Friday, July 6, 2012 at 1:24 am | Permalink
  8. ebdoug wrote:

    My neighbor with intestinal cancer dropped his health insurance. “The hospital will write it off if I have to go.” Since he isn’t working, living on compensation, my guess is that he doesn’t have to file so won’t be penalized.

    My grandchildren are on free health insurnace. Not so the parents who pay by income. She works at an insurance agency that provides health insurance. She has let their income based health insurance lapse because “I was too busy to fill out the papers” (she works two days a week) “Forgive them Lord for they know not what they do.”

    Friday, July 6, 2012 at 9:02 am | Permalink

One Trackback/Pingback

  1. Taxes as Penalties - BizNax on Saturday, July 14, 2012 at 4:32 pm

    […] As I’ve said before, I don’t think it matters whether the consequence of not having health insurance is a tax or a penalty. […]