Taxes: Where Political and Constitutional Expediency Collide

Mark of New Jersey

Mark is a Founding Editor of The League of Ordinary Gentlemen, the predecessor of Ordinary Times.

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17 Responses

  1. EngineerScotty says:

    Maybe Obama is being clever… and is hoping the individual mandate, which the insurance companies like (and which the left, generally, does not), gets thrown out by the courts. (Does the bill contain any provisions wherein if the idividual mandate is held to be unconstitutional, all of health care reform is likewise discarded?)
    The Kossacks are screaming bloody murder about the whole thing, but I think the Pres, for all his faults, is shrewder than the whole lot of ’em. 🙂Report

    • ” (Does the bill contain any provisions wherein if the idividual mandate is held to be unconstitutional, all of health care reform is likewise discarded?)”

      I don’t know – as I said, I’ve been out of pocket for the last week and half. But without some sort of mechanism to strongly incentivize the purchase of insurance, whatever minimal good the proposed reforms would actually do goes out the window. The mandates are that mechanism.Report

      • EngineerScotty in reply to Mark Thompson says:

        One thing they could have done, I suppose, is structure it AS a tax–a poll tax (or even a income surtax) which insurance premiums are 100% deductible from.

        I was under the impression that the purpose of the mandate is to manipulate the risk pool–to make sure that “choice” buyers (the ones who don’t think they need insurance) get it anyway, in order to subsidize the folks who aren’t healthy; not to simply encourage good behavior. Big Insurance would be most unhappy were they forced to only cover high-risk patients, without having low-risk patience to balance things out.Report

        • The structure as a tax you suggest would be a pretty good idea, and would pass constitutional muster without any debate to boot.

          As for the purpose of the mandate, I view it as having both purposes.Report

        • The mandate is a risk pool adjustment that’s also supposed to make things like guaranteed issue, spread and MLR limits palatable for insurers. Otherwise they’d just jack up premiums for those people who really need and can’t get health insurance and get the government to pass subsidies for those. (And do you think there’d be a lot of crying of bloody murder there from the Kossacks if that ever happened? Oh yeah…the Administration I think was flirting around with letting something like that happen so that congress would have to revisit the issue and fix it later)Report

  2. greginak says:

    The thing is the word “tax” has become so loaded with meaning. For some it is a curse word that implies quasi tyranny. Pol’s don’t want to use the word because is has been demonized and obsessed over to the point where it is hard to have a serious discussion about taxes.Report

    • Mark Thompson in reply to greginak says:

      True. This, of course, does not exactly inspire confidence in politicians’ ability to tell the truth. Then again, in the context of this debate, what do you call the penalty for failing to comply with the mandate, and how do you structure it? The word “tax” strikes me as no more politically poisonous than any of the other possible options.Report

  3. Mark-
    I wonder why you view the tax as regressive, given the subsidies? I assume you don’t believe the subsidy structure is as progressive as it ought to be. But, assuming that the subsidies are broadly progressive, I suppose there is still an argument for the folks clustered near the end point of subsidies (400% of FPL). But this wouldn’t make the entire regime regressive.
    [I actually oppose mandates without a public backstop, so I am sort of playing a bit of Devil’s Advocate here.]Report

  4. Scott says:

    Clearly Obama will say anything to get this legislation passed. Just look at his recent statements that the US will go bankrupt unless the health care legislation is passed.Report

  5. Here’s a question, and not an entirely facetious one, I hope: Is a government-enforced tithe a tax?

    Such creatures hardly exist anymore, but they used to be common in Europe. In a compulsory tithe, one must pay a sum (perhaps in kind) directly to the Church. The state makes sure it happens, but it doesn’t get to manage the proceeds.

    If you answer is “yes,” that this setup is a tax, then clearly it is an unconstitutional tax, thanks to the First Amendment.

    But what about a forced transfer to one (non-religious) corporation, or a particular subset of them? And what if it’s a forced transfer that other industries, those outside the insurance sector or those uncompliant with federal regulations, don’t get to benefit from? I would suggest that these are also unconstitutional, but then, I realize that this view wouldn’t get five votes on the Supreme Court.

    My view of the “general welfare” clause is exceedingly narrow compared to the consensus view today. I would say, for example, that this clause certainly does not empower Congress to advance the particular welfare of individual corporations or favored industries. It only empowers Congress to do those things that would benefit everyone about equally. This should be a real test, not a toothless platitude, in our legal thinking.

    I am also strongly convinced that Wickard v. Filburn was wrongly decided. Given that consideration, a compulsory transfer to subsidize a single industry is obviously unconstitutional for a second reason.

    As I said, though, I realize I’m in the minority here.Report

    • Jaybird in reply to Jason Kuznicki says:

      At least it’s a vocal minority.

      (Great post, couldn’t find a single thing to disagree with… AND I LOOKED!!)Report

    • Jason:

      I probably agree with you on all of this. This post should not be taken in the spirit of my expressing agreement with the state of post-New Deal law, but instead in the spirit of recognizing that post-New Deal precedent exists and isn’t about to be reversed (even as I fancifully dream of the Court siding with the privileges and immunities argument in the Chicago gun case).Report

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