President Barack Obama is seen on a monitor as he appeared on CBS's "Face the Nation" in Washington, on Sunday.
(Karin Cooper/CBS Face the Nation/AP)Photos (1 of 1)
Healthcare mandates: Are they a tax or not?
A tax expert says Obama's plan could cost some families more money. Whether that is a tax is largely a matter of semantics.
By Mark Trumbull | Staff writer/ September 22, 2009 edition
The debate over healthcare reform is now also a debate over what the meaning of “tax” is.
Opponents of President Obama and congressional Democrats say that a mandate for Americans to buy insurance – or else pay a penalty to the government – would amount to a new tax on much of the middle class.
The semantic debate has gathered steam since Sunday, when Mr. Obama tried to deflect a dictionary-wielding TV anchor on the subject.
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama told ABC’s George Stephanopoulos.
But even if one calls this “responsibility” a “mandate,” rather than a tax, the penalties for families that don’t comply would be owed to the Internal Revenue Service. Some experts say that portion, at least, qualifies as a tax.
Conservatives circle the wagons
At any rate, Obama’s verbal efforts have only served as fuel for conservative critics.
Fox News host Bill O’Reilly went so far as to bring on an expert at parsing body language.
“That’s when the finger – yes, that’s when the finger stops being aggressively pointed,” Tonya Reiman told Mr. O’Reilly as they replayed tape of Obama on ABC.
“A tax by any other name still leaves a hole in the wallet,” blogger Bobby Eberle wrote on GOPUSA Tuesday.
The tax debate raises challenges for the White House on two fronts:
1. It complicates the White House’s already difficult challenge of winning support from core middle class voters – many of whom would have to devote more of their paychecks to healthcare under the plan, whether they call it a tax or not.
2. The plan could represent a violation of a campaign pledge by Obama not to raise taxes families making less than $250,000 a year.
“The $750-a-person tax for not having health insurance is a tax,” former Bush adviser Karl Rove told the Washington Post. “Its imposition will break Obama’s pledge.”
So is it tax?
“You get into a lot of semantics here,” says Eric Toder, an expert at the nonpartisan Tax Policy Center in Washington. But he says if money is owed to the IRS, “I supposed you would call that a tax.”
Obama likened the mandate for individuals to rules requiring drivers to have automobile insurance. That may be a useful analogy, but Mr. Toder says it’s not a perfect parallel, since people can choose not to drive cars.
Separate from the question of what is technically a tax, there’s also the question of what affects family pocketbooks like a tax.
The answer may be nuanced, Toder says, because the government will be offering subsidies in addition to laying down the mandate. Some families might get a product they want – the insurance – thanks to the subsidy. Others, who get a smaller subsidy or who don’t want as much insurance, may feel taxed.
The debate over taxes, in the end, is part of a larger puzzle: How to pay for expanded access to healthcare in America. That will mean tough choices, experts say, including some parties paying money they’d rather not. It also means solving the problem of fast-rising medical costs, an issue where current bills in Congress may make only modest headway.
The “tax” issue resonates after all, because voter pocketbooks are only so deep.
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Comments
2. Marie Rehbein | 09.22.09
One wonders how such a mandate affects the religious freedom of those who do not avail themselves of the services of the medical community but take their health concerns only to God in prayer.
3. Alex Brant-Zawadzki | 09.22.09
Even if it WAS a tax, which I don’t believe it is (though clearly you could argue from both sides), the cost would be dwarfed by the amount families would save due to businesses saving money on their health care and being able to pass those savings on to consumers. If you have a little imagination, you can figure out dozens of ways in which families will save money if everyone’s health care costs are dropped and coverage is extended to all. Businesses will lose less workers to illness, allowing them to be more productive and profitable.
Everybody wins.
With respect,
Alex Brant-Zawadzki
Volunteer
Organizing for America
4. nb | 09.23.09
Why not ask first if the “mandate” is Constitutional or at least in the spirit of America? Basically, a “mandate” takes away liberty - but then of course so do oppressive taxes.
Ben Frankly wrote: “Any society that would give up a little liberty to gain a little security will deserve neither and lose both.” - But hey, he’s been dead over 200 years and couldn’t possibly comprehend life today…
5. Terence Conklin | 09.23.09
Tax or no tax, Obama is missing the opportunity to find a “responsibility” for us all to buy a GM car. If we don’t, we get fined. But wait! He may discover that yet.
6. Dave | 09.23.09
Alex, there’s no guarantee that anybody (businesses or consumers) will be paying any less than they do now and in fact there is evidence to the contrary. Look at Romneycare (which this is essentially a nationalized version of it) with how the mandate drove costs up rather than down, so by your logic, nationalized Romneycare should be opposed for its negative affects on businesses and consumers.
7. Andrea | 09.23.09
For individuals and families that don’t have insurance at work and simply don’t earn enough to purchase it on their own, a ‘fine’ will only make the situation worse by leaving them with even less money than before.
8. RHarrisonScott | 09.23.09
This brings back memories of Bill Clinton - “depends on what the meaning of ‘is’ is.” Does the President really think anyone except the mentally challenged fails to recognize that this is, in fact, a tax? Let’s see. If you don’t participate, the IRS will enforce a fine. Hmmmm….
10. Lyssinka | 09.23.09
Right Marie!
Is there an “opt out” for those who do not partake in any way of the medical care community’s resources??
11. greg Jarvis | 09.23.09
Of course there’s an “opt out” provision to all this horrible taxation– just MOVE to Canada, er, France, er England, er Germany, or Switzerland or … sorry, I’m at a loss to find a developed country that doesn’t TAX its citizens and provide some level of health care. Maybe one of you refuseniks can find a country where everything is free and everyone gets to earn and spend all they want without any government interference– maybe on an island??
Get real, it’s time to stop expecting a mobile workforce, trained workers, and modern services without government involvement. Business won’t do it. And we can collectively do more than if we all act like we’re on an island alone.
12. James | 09.24.09
I can agree with 7. Andrea. This subject can be put on hold until after the other problems are corrected. - And pay a fine to the IRS. That is part of the false Federal Reserve of which we owe nothing to them for printing our fiat money. No more Health Care debate until these other very important issues are fixed CORRECTLY.
13. Marie Rehbein | 09.24.09
Lyssinka, there should be a religious exemption. However, for everyone else putting some money toward their medical expenses is a responsibility, even if they do not find themselves needing medical care very often, since no one is immune to illness and accident. The amount of money that is reserved for this should be a reasonable percentage of income rather than a guess of what might possibly be needed.
However, insurance is insurance, not a way to pay for medical care. It insures against not having put enough away for medical expenses, but it is expensive, and paying for it takes money away from having enough to actually pay for doctors and medicines. It protects one’s wealth from the unpredictability of one’s health, but it is not designed to substitute for paying typical medical costs associated with keeping or getting oneself well.
Therefore, mandating that people buy insurance and using taxpayer money to buy insurance for people is the same as enslaving people to the health insurance companies.
14. Susan | 09.25.09
All Insurance is basically gambling; Insurance companies are betting policy holders won’t use the policy, and policy holders are betting they will.
Mandating that Americans carry PRIVATE insurance is the same as mandating we all by a certain car, as the previous commenter stated, or mandating that we all enrolled in the private banking system, or mandating that we all shop at Walmart, or whatever other FASCIST scheme they have to direct profits to select corporations.
First they mandate that you have health insurance, then they mandate that you have certain health tests and screenings, then vaccines, etc… It’s a slippery slope they climb.
Wingers are shouting “SOCIALISM” from every pulpit right now, but that only shows their ignorance. What we’re talking about is Fascism. Pure and simple.
From Merriam-Webster’s Collegiate Encyclopedia: Fascism: “A philosophy of government that stresses the primacy and glory of the state … obedience to its leader, subordination of the individual will to the state’s authority … suppression of dissent. Martial virtues are celebrated, while liberal democratic values are denigrated … led by charismatic leaders who represented to their publics the strength that could rescue their nation from political and economic conditions.”
And from FDR: The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group,
But Mussolini said it best when he said: Fascism is best described as “Corporatism” because it is a merging of corporations and the state.
Wake up America. You are being conned.
15. Dr. Don | 09.28.09
It comes down to this.
Do you believe that health care is a privilege or a right?
If its a privilege then if you abuse it, that privilege should be taken away.
If its a right, then we should do all we can to provide it for all.
We are a nation of privilege after all. We work for all that we have and we feel we deserve the best
of all possibles. As a privilege The honor of having that privilege is a result of the work you do to maintain that privilege. Stop working for it (don’t pay for it), abuse it (drugs, eating bad food, suicide etc), or sabotage others privilege then it should be removed from you, much as a Driver will have privileges removed for drunken driving.
And on the last point if you choose not to enjoy that privilege then you may not partake of it without paying for it.
Our current system, having a fatal flaw of treating HC as a privilege while taking care of people who have opted themselves out.
As a right this changes somewhat. A right is an entitlement. It means that we should all receive equal care regardless of what we contribute and or how we treat ourselves or others. In healthcare is a right, then we should all pay equal share as we are all equally indebted to each other. This is not currently what we have setup, although it seems that is what many are pushing for.
So what do you believe? Privilege or Right?
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1. Sid | 09.22.09
Carefully nuanced answers are called spin and I’m getting tired of it.
Automobile insurance is not a valid analogy because automobile insurance is intended to financially protect somebody you may harm with your vehicle. If your claim is that I’m harmed by my having to pay for somebody else’s medical bills, then drop the mandate for free emergency room services.