Nobody can know what is in the bill until it is voted in.
Odd, the text of the bill was out there and is there now. More importantly many people who were paying attention to the bill seemed to know what was and wasn't in (the scope of the mandate's penalty for example, whether or not the public option was there).
Is it a tax or a penalty.
Generally a penalty is a type of tax. At least in the way we use language these days. If penalty has a specific legal definition no one has yet presented it.
Single-payer or not?
Not. Anyone who actually bothers to learn about health care knows the reform is not a single payer system.
The clarity just is not there, but the socialism seems clear.</I.
It's clear because you've defined socialism to be whatever Obama supports. Kinda like some leftists in the 80's who defined fascism to be whatever the Republican in office supports.
The reason that the individual mandate is a penalty rather than a tax is because no supporter of the bill can honestly say that they feel going voluntarily uninsured is “doing nothing wrong.” Supporters simply don’t believe this. There has been a clear moral opprobrium here, all throughout the legislative history. It’ll be fun to see this demonstrated in court, if the issue comes up.
This is a very interesting concept. You're basically asserting that judges are supposed to measure the 'feelings' of the bills supporters instead of looking at the actual bill itself. Cute. Well suppose the penalty/tax was $1 per year but the bills supporters spouted rhetorical fire in debating the bill, calling people who don't want to buy insurance baby killers, nazis, the scum of the earth. Suppose also, in bizzaro universe Alpha2, the same bill passed but its supporters were calm, rational and fully understanding of thsoe who don't want to buy insurance but calmly made the penalty/tax $100,000 per person per year.
Now I suppose you're going to tell us that in the first Universe the courts should strike down the law but in the second universe the law isn't an effective mandate because of all the 'nice rhetoric' during its passage.
That argument is weak because, semantic questions aside there is no reason why the mandate has to be a tax any more than a penalty. It’s more credible to say it’s really penalty masquerading as a tax than a tax masquerading as a penalty.
Problem, what is the difference between a 'penalty' and a 'tax'? Well semantically the word 'penalty' seems to come up quite a bit in places where most everyone thinks we are talking about taxes. For example, if you take money out of your IRA too soon you're subject to a penalty. Where do you pay that penalty? On your tax form.
If you really try to nail down a definition of penalty it would seem to be a type of tax that the gov't that you have the option to reasonably avoid and the gov't would rather you avoid but you're perfectly free to not avoid it and opt to just pay the penalty.
For example, a lawyer could ethically advise you to cash out your IRA early and just pay the tax penalty. But if it was illegal to cash out your IRA a lawyer couldn't ethically advise you to do that...even if the fine was just the 'penalty' we have in this universe.
If it really is only a minor penalty, healthy people will pay the fine and forgo insurance. At the very least, this should severely compromise the ACA’s effectiveness.
Notice that you're speculating here, if the law is ineffective that is a matter to be judged by a legislature, not a judge. Some time ago Congress passed a 'luxury tax' on expensive items like yachts (I think it happened in Reagan's 2nd term). The idea was a diaster as people simply stopped buying the high priced goods subject to the high tax and the law didn't raise any real revenue and ended up causing job losses in the industries that made the goods. In other words it was ineffective, but the resolution to that came when a future congress repealed the law based on that experience.
The rationale behind forcing everyone to purchase insurance, as I understand it, is that if healthy people are allowed opt-out, they’ll flee insurance companies en masse, leaving only sick people on the rolls and collapsing the industry.
Well there's two extremes here:
1. Everyone gets insurance, since many healthy people will be in the insurance pool insurance rates will be as low as possible. The burden the gov't has of subsidizing those who can't afford insurance is less, more employers will cover employees with insurance (since rates are lower) etc which is good because few people are paying the penalty since almost everyone is covered privately or via Medicare/Medicaid or their employers.
2. Lots of people don't get insurance. Insurance rates are higher because covered people are sicker. But then the gov't is getting more revenue in from those opting to pay the penalty. This makes the higher burden of subsidizing the pools easier.
Reality IMO will likely be something in between and no doubt the law will be tweaked in the future depending upon many factors that simply can't be predicted. For example, Medicare D ended up costing less than expected because of good and bad reasons (good; more seniors using drugs ended up reducing hospital expenses for the other parts of Medicare....grandma not skimping on her diabetes medication means fewer trips to the ER with grandma in a diabetic coma.....bad; drug companies didn't come out with as many new drugs since as before so more and more drugs went generic which meant lower drug prices. That's good for existing drug users but if you think about it for a moment the world would be better if we had more amazing drug breakthroughs, not fewer)
I read it as a feature, not a bug, that the law leaves the system open to continue evolving. Employer based insurance, for example, may continue as the American norm.....or it may weaken and the new norm might become individual Americans buying insurance directly. Libertarian types tend to think the latter is the best ultimate solution but IMO the bill has a conservative virtue of not locking in any particular school of thought regarding what America's health care system will ultimately look like in, say, 50 years.
If, on the other hand, the tax penalty is structured in such a way that makes it prohibitively expensive for healthy people to opt out, it’s effectively a mandate, regardless of your preferred terminology.
OK here is where langugage screws up the argument. We agree the tax code can make some decisions very expensive but that in itself doesn't make those decisions a 'mandate'. So this opens up the question of whether the tax for not carrying insurance is so high that it effectively becomes a mandate thereby open to the Constitutional question of whether Congress can mandate citizens to buy insurance (another debate in itself). Well here's a few issues:
1. You have to ask is the penalty so high that it would effectively be impossible to pay for people subject to it? For example a law that said anyone who has more than two kids will have an income tax penalty of $500,000 per year would probably be deemed as a 'two child mandate' rather than just a tax because most people wouldn't be able to pay it. But $500 a year probably wouldn't.
2. You have to ask is the difference in taxes between a hypothetical person who pays the penalty and one who doesn't greater than other examples in the tax code that we don't consider 'effective mandates'. For example consider the tax savings seen by someone who has another kid, has mortgage interest, or puts solar panels on their homes. Is that tax savings a lot less than the tax savings by the guy who buys himself insurance versus the guy who doesn't?
Here your argument falls apart. The penalty in the so-called mandate is $750 per year. If that's an 'effective mandate' then the tax code is also 'effectively mandating' you to have babies, buy solar panels, go into mortgage debt, make charitable contributions etc. Many people have tax bills that will swing by $750 or even more depending on those decisions. In fact when the bill first passed some analysts were concerned that the problem was the 'mandate' wasn't enough of a mandate....opting to pay $750 per year is a lot cheaper than buying a $3000 insurance policy. If you want to void this bill by Judge you have to assert that a many parts of the tax code are likewise unconsitutional....or you're just advocating judicial activism.
A penalty is assessed for failing to comply with the legal obligation to buy health insurance [from a private party, mind you]. The word “mandate” is not necessary for the concept to hold.
OK previously I had someone say to me that "individual mandate" was the operative phrase that made the bill illegal. For the record, that phrase exists only in the minds of pundits who talk about the bill, not the bill itself.
Next, is there a 'legal obligation' to buy insurance in this bill? As I pointed out when you usually hear the world penalty is relates to taxes but is usually something you can legally do. For example, there's a penalty for early withdrawl of your 401K but it's something you can legally do. In this bill if I went to a lawyer or CPA and told him I didn't want to buy insurance but had plenty of money could he tell me "ok just pay the penalty"? If so it's not really a mandate because such professionals are ethically obligated not to advise their clients to break the law.
Had they been able to write the law without the penalty, that everyone except the non-complier gets a tax break, no prob. But that would have defeated the whole purpose, to compel the young and presumably healthy to subsidize the private risk pool.
So this isn't about any principle really here but a rather semantic argument over form. You're saying Congress can pass a $750 penalty on all taxpayers coupled with a $750 credit for all who have coverage or who have a certain level of low income....but Congress can't save some paper and just put a $750 penalty on taxpayers who don't have coverage? Even if you're right this is analgous to those politicians who get candidates kicked off the ballot because the margins on their petitions are a quarter inch off from that specified by law.
Had it been a public risk pool like Medicare, SS, etc., smoother sailing. But the lack of a “public option” was precisely why the bill managed to squeak through in the first place.
Possibly but I don't see why this is important. If a public risk pool is very important then champion it as an addition to the bill. I don't see how it is relevant to the Constitutional question.
I believe the actual text of the 'individual mandate' can be found here around page 325 http://docs.house.gov/rules/hr4872/111_hr3590_engrossed.pdf
Several quick observations:
1. A longish preamble/discussion in the bill talks justifies it based on the interestate commerce clause. How important that is I'm not really sure.
2. The term mandate does not seem to be present, it's in a section called 'individual responsibility'.
In terms of it being a tax, the following strike me on a fast reading:
1. The term used is 'penalty' rather than fine. As I've pointed out the word 'penalty' often appears in terms of taxes (i.e. a 'penalty' for filing late, for taking money out of your IRA too soon etc.) As has also been pointed out the IRS & gov't is specifically prohibited form using it's law enforcement powers to collect this thing if it is really a fine rather than a tax.
2. The individual reports this on their Income Tax Return. An odd place to report something that isn't really a tax.
3. Perhaps most damming of all (see page 329), individuals are exempt from the penalty if they 'cannot afford coverage'. How do you know if you 'cannot afford coverage'? It's based on whether the cost of coverage would exceed 8% of your adjusted gross income. In other words this penalty impacts you if your income goes higher but doesn't if your income goes lower or disappears. In other words it's a damm INCOME TAX. Note that most actual criminal penalties are not income dependent. When we hear of the fine for passing a bad check or speeding we don't think the fine depends upon our income but this penalty does. Now granted it's unlike the regular income tax in that it's a flat amount as opposed to a % of our income, but nothing in the Constitution says income taxes must be based on a percentage of income rather than being flat amounts.
So now the problem with this thread is that there's no real mandate. We can talk about a mandate but legally there's no real mandate there. You are perfectly free to decline coverage and pay the tax (aka penalty). Doing so is not illegal. Without a mandate you're back to an income tax and when you go back to the income tax you're kinda stuck here when it comes to this court nonsense. You are either advocating a very radical reading of the Constitution which would have to undo all 'social policy' based tax deductions and credits or you're advocating pure judicial activism.
And that gets to the heart of the matter… are we objecting to the government using financial incentives? Or the language and methodology around this current incentive (or, really, disincentive)?
The heart of the matter is that the people pushing this do not feel liberty is at stake. IMO they compare unfavorably to Birthers. Bithers, who don't believe Obama is a 'natural born citizen' are wrong in fact but right in principle. The Constitution does seem to restrict the office to 'natural born citizens', their problem is not reading the Constitution honestly but evaluating facts honestly. The argument here though is a lot more like those people who get a candidate kicked off the ballot because his petition was supposed to be submitted on double sided paper instead of single sided. Even if they technically have the law on their side it's hard to feel like they are doing a great service for democracy.
At the end of the day the fact remains that even if everything said here by the anti-mandatites is 100% true the fact remains that a refundable tax credit for buying your own insurance would effectively be the same policy. A major law that was built on debate and real compromise is trying to be repealed not by the results of an election but by playing what are essentially laywer games.
I don't think it would have been very helpful since courts are not limited to such citations. A law may be justified under serveral different clauses, just because Congress cites the wrong one doesn't mean the law itself is unconstitutional or that Congress has to go back and 'rewrite' the laws authority like a kid who got his homework wrong and has a stern teacher who makes him redo it.
You might be surprised that 'mandate' is not actually in the language of the bill (at least in the section regarding what we call the 'individual mandate').
An across the board tax hike wouldn't resolve the issue that the anti-mandatites are expressing here. Look imagine Congress grants a $2,000 tax credit for having a kid. The fact is you can argue that could have been a $1500 tax cut for everyone rather than a $2K cut for those who have kids. By the reasoning here, that would still be a 'mandate to have kids'. Except it's not and no one seriously thinks it is.
Suppose you already had a $2K tax cut for having a kid and congress expanded that to a $2500 tax cut. Again same thing, I don't have a kid and you do but otherwise we are exactly the same. I pay $500 for not having a kid therefore I'm a victim of a 'have a kid mandate'.
Either way you work it, you can't consistently claim that the 'individual mandate' isn't a tax and must be struck down without also striking down almost every piece of 'social engineering' in the tax code.
One problem in making it a “tax” was that all revenue-raising bills must originate in the House, per the Constitution. But it was the Senate bill that passed and was signed by the president.
Problem: The bill also raises the tax cap on earnings subject to Medicare's payroll tax and I haven't heard anyone argue against it on the grounds that it didn't originate in the House. If killing the bill in the courts was that easy you'd think it would have been raised by now.
But the point I’m making here is that nobody’s required by law to buy a house, or take the deduction for that matter. This goes back to Jason’s original point about action and inaction.
But here's the problem. There's nothing in the law that says you have to buy health insurance. If you don't buy health insurance you pay a penalty just as there's a penalty for not having a kid, not buying a house, not making various donations to charity etc. etc. If you want to reimagine Constitutional law to void all social engineering aspects of the tax code then go ahead and advocate that. If you aren't, though, you're just changing the rules to kill on particular bill. In other words what is being advocated is 100% pure judicial activism.
The only reason we are talking about the Constitutionality of an 'individual mandate' is because pundits refer to the tax penalty in the bill as a mandate. Technically, though, there's no reason why you couldn't refer to the tax codes benefits for having kids as a 'mandate to have babies'. Now it's not that pundits are being dishonest, it's that when you are talking about whether or no something is a good policy you care about substance. But law cares a lot about form. A true mandate to, say, 'have babies' would be a very scary thing for a gov't to enact. But in terms of policy discussion people tend to gloss over the fact that there's a difference between a 'mandate' to have babies and a policy that increases the costs of not having babes. In form they are not the same thing at all.
First, it's pretty clear the lawmakers felt they could mandate not only the purchase of a general weapon but very specific types of weapons and ammunition.
Second, the objection is irrelevant. Most people are covered by some type of health insurance. The fact that many would have already been in compliance with the gun law doesn't alter the fact that here you have Congress mandating that they purchase a product from the private sector.
Third and most important is not that the law illustrates the power of the interstate commerce clause (it's almost certainly under the power of Congress to raise a militia), it's that it illustrates the Founding era did not think it shocking that you could have a law mandating the purchase of goods or services.
1. Not designed to raise revenue? The IRS collects it, it goes into the Treasury. That's raising revenue.
2. Game over, once you say the gov't is free to give deductions you can't specify a real difference between this 'mandate' and tax deductions. How do I get a tax deduction for solar panels without buying them? How do I get a mortgage interest or first time homebuyer deduction without buying a home? Or a credit for a super-efficient car without buying one? If you read this bill as an impermissable mandate to buy insurance then how do you not read the tax code as an impermissable mandate to have children, buy homes, buy solar panels, electric cars, donate to churches and charities etc.? The only difference you have is perception. Pundits talk about the 'individual mandate' in the health care bill but don't talk about a 'have babies' mandate in the tax code...even though the cost imposed on the childless in the tax code is a lot more than the health bill.
OK let's say you're free to rewrite the law to 'express' the mandate as a tax. What specifically do you change? Do you drop criminal penalties for not complying with the mandate? Nope, the law already specifically says the IRS can't go after anyone criminally. What specifically makes the mandate not a tax except the shorthand pundits and analysts use in talking about the bill?
I thought we were discussing your question of whether anything could be excluded on the grounds that it's not interstate commerce (such as 'in state' commerce). Settle that question first and then move on an ask another if you wish.
Probably not because I don't think you can construct such a scenario. At best you get once removed and while Justice Thomas is on record of not being a fan of once removed, Scalia is. I hope he enjoyed 'slapping down' those hippies hawking pot for medical purposes. Doing so he's written himself into a corner where he'd either have to let Obamacare stand or be a judicial activist doing what McCain and Palin failed to do in the last Presidential election.
If I take money out of my 401K I incur a penalty on my taxes. If I file my tax return late I incur a penalty as well.
It seems to me the world 'penalty' exists not as a legal term but a policy one. Legally/policy wise 'penalty' seems to mean a type of tax that I have the option of choosing either accepting and paying or avoiding by doing something different.
Herein is the problem with this whole mandate argument. The bill ACTUALLY DOESN'T HAVE A MANDATE! There is no crime of refusing to buy insurance. The individual is not commanded to buy insurance. The worse that happens is your tax bill may be a bit higher, exactly the same thing that happens if you don't have kids, don't have mortgage interest, don't make lots of contributions to charity or don't put solar panels on your home. You can't logically challenge this as a mandate unless you want to argue all 'social engineering' aspects of the tax code is likewise an unconstitutional mandate.
Even better, consider the Earned Income Tax Credit. If you have a kid it can be as much as $3K. If you don't I think the best you can get is $500 or so.
Guess what. You're a Buddhist monk living in a monestary doing a light, min. wage job. It's Feb., you do your taxes and discover you're getting $500 back due to the EITC. Your fellow monk, though, is taking care of a kid he had before he decided to join. He's exactly like you but gets back $3K.
OMG, the Federal Government has just MANDATED people to have kids!
You know if you simply had passed a $2,000 refundable tax credit for anyone who buys their own insurance you'd have effectively the same thing as this so-called mandate!
Now explain to me why this huffing and puffing is about something of substance rather than trying to dither about form?
I suspect it's because for large companies the cost of health insurance is basically the cost of the people covered plus an administrative fee. For a terminated employee on COBRA, if they end up paying more than they use then that's great for the employer. It helps lower the cost for all their remaining employees. But if they cost more than they pay then that just raises the cost to remaining employees.
Now how do they know? They don't but they figure if you're laid off your money is probably very tight, why would you be so eager to keep coverage with what little you have? Maybe 'cause you know more about your health than they do. Hence better safe than sorry, make you jump thru some hoops.
As a thought experiment: Suppose we levy a tax on everyone. You can get out of it by spending two days a week breaking rocks in a quarry, in leg irons. The beneficiary is a multinational mining corporation
Wouldn't this be effectively the same thing as the gov't saying everyone is taxed, say $5,000 but if you work two days a week in a big mine you'll get paid $5,000 a year? Is this functionally different from saying, say, that military pay in combat zones is immune from income tax?
It’s just a tax, I’m sure you’ll have to admit — not a penalty in any sense at all.
What exactly is a 'penalty'? Think about it. On my taxes withdrawing early from an IRA incurs a 'penalty', filing late has a penalty and so on. I suppose you can say the death penalty or 20 yrs to life is a 'penalty' for murder but we don't often talk like that, we usually talk sentences or punishments.
It would seem that 'penalty' is not a legal term but a policy term to denote a tax that is optional. Optional in the sense that you can avoid it or opt to embrace it. If, for example, you're in a financial bind you can take money out of your IRA and simply pay the penalty (aka tax). or if you're having trouble filing your CPA can advise you to pay the penalty for filing late.
A Professional (meaning someone like a lawyer or CPA who is under ethical obligation to uphold the law) can ethically advise you to take a penalty, but cannot advise you to break a law. The lawyer can say "file this form late and pay the $50 penalty" but I don't think he can ethically advise you to "write this guy a bad check, then pay the $50 fine for passing bad checks". The first is an option the law says is an ethical option the second is an illegal, but with a realtively minor punishment.
Likewise:
The purpose of a tax is to raise revenue for the government.
No problem there, last I checked the money collected by the IRS goes to the gov't.
As such, taxes should be applied generally, and according to some standard of justice (this is what the “general welfare” clause requires, as I’ve already explained). A nearly ideal standard here is individual apportionment, conditioned on the ability to pay. The income tax and the state-level sales taxes are both plausible efforts in this direction, although neither is perfect, of course.
Here it would seem the charitable deduction is a good analogy. Two people look exactly alike, same job, same income etc. One guy, though, donates a lot and the other donates nothing. One has a smaller tax bill. You got 'general application' of tax liability but the deduction can be justified on the grounds that such donations reduce the demands on the gov't for relief therefore the more charitable taxpayer has a lower tax burden. That would seem to apply here where those buying health insurance are reducing the gov'ts need to subsidize those who don't have it as well as cover their own expenses rather than appealing to the gov't should they need it.
Actually not quite. The two laws that were struck down (a law about domestic violence and another law about having a gun near a school) were built on that 'more than twice removed' argument over commerce. That law that stood was the Federal law prohibiting pot even when a state passed a law permitting it for medical purposes and took pains not to involve 'interstate commerce' by demanding the pot be grown and sold in state only. Even though the Feds were trying to prohibit interstate commerce in pot and the state law seemed consistent in that, congress's ability to regulate interstate commerce still extends to trumping such state laws that simply 'effect' the interstate market by, say, reducing a state's demand to buy pot.
*Comment archive for non-registered commenters assembled by email address as provided.
On “The Mandate Double-Bind”
The nomencalture is actually pretty simple once you consider defining penalty as a particular type of tax.
On “Legislating from the bench”
Nobody can know what is in the bill until it is voted in.
Odd, the text of the bill was out there and is there now. More importantly many people who were paying attention to the bill seemed to know what was and wasn't in (the scope of the mandate's penalty for example, whether or not the public option was there).
Is it a tax or a penalty.
Generally a penalty is a type of tax. At least in the way we use language these days. If penalty has a specific legal definition no one has yet presented it.
Single-payer or not?
Not. Anyone who actually bothers to learn about health care knows the reform is not a single payer system.
The clarity just is not there, but the socialism seems clear.</I.
It's clear because you've defined socialism to be whatever Obama supports. Kinda like some leftists in the 80's who defined fascism to be whatever the Republican in office supports.
On “The Mandate Double-Bind”
The reason that the individual mandate is a penalty rather than a tax is because no supporter of the bill can honestly say that they feel going voluntarily uninsured is “doing nothing wrong.” Supporters simply don’t believe this. There has been a clear moral opprobrium here, all throughout the legislative history. It’ll be fun to see this demonstrated in court, if the issue comes up.
This is a very interesting concept. You're basically asserting that judges are supposed to measure the 'feelings' of the bills supporters instead of looking at the actual bill itself. Cute. Well suppose the penalty/tax was $1 per year but the bills supporters spouted rhetorical fire in debating the bill, calling people who don't want to buy insurance baby killers, nazis, the scum of the earth. Suppose also, in bizzaro universe Alpha2, the same bill passed but its supporters were calm, rational and fully understanding of thsoe who don't want to buy insurance but calmly made the penalty/tax $100,000 per person per year.
Now I suppose you're going to tell us that in the first Universe the courts should strike down the law but in the second universe the law isn't an effective mandate because of all the 'nice rhetoric' during its passage.
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Koz
That argument is weak because, semantic questions aside there is no reason why the mandate has to be a tax any more than a penalty. It’s more credible to say it’s really penalty masquerading as a tax than a tax masquerading as a penalty.
Problem, what is the difference between a 'penalty' and a 'tax'? Well semantically the word 'penalty' seems to come up quite a bit in places where most everyone thinks we are talking about taxes. For example, if you take money out of your IRA too soon you're subject to a penalty. Where do you pay that penalty? On your tax form.
If you really try to nail down a definition of penalty it would seem to be a type of tax that the gov't that you have the option to reasonably avoid and the gov't would rather you avoid but you're perfectly free to not avoid it and opt to just pay the penalty.
For example, a lawyer could ethically advise you to cash out your IRA early and just pay the tax penalty. But if it was illegal to cash out your IRA a lawyer couldn't ethically advise you to do that...even if the fine was just the 'penalty' we have in this universe.
"
If it really is only a minor penalty, healthy people will pay the fine and forgo insurance. At the very least, this should severely compromise the ACA’s effectiveness.
Notice that you're speculating here, if the law is ineffective that is a matter to be judged by a legislature, not a judge. Some time ago Congress passed a 'luxury tax' on expensive items like yachts (I think it happened in Reagan's 2nd term). The idea was a diaster as people simply stopped buying the high priced goods subject to the high tax and the law didn't raise any real revenue and ended up causing job losses in the industries that made the goods. In other words it was ineffective, but the resolution to that came when a future congress repealed the law based on that experience.
The rationale behind forcing everyone to purchase insurance, as I understand it, is that if healthy people are allowed opt-out, they’ll flee insurance companies en masse, leaving only sick people on the rolls and collapsing the industry.
Well there's two extremes here:
1. Everyone gets insurance, since many healthy people will be in the insurance pool insurance rates will be as low as possible. The burden the gov't has of subsidizing those who can't afford insurance is less, more employers will cover employees with insurance (since rates are lower) etc which is good because few people are paying the penalty since almost everyone is covered privately or via Medicare/Medicaid or their employers.
2. Lots of people don't get insurance. Insurance rates are higher because covered people are sicker. But then the gov't is getting more revenue in from those opting to pay the penalty. This makes the higher burden of subsidizing the pools easier.
Reality IMO will likely be something in between and no doubt the law will be tweaked in the future depending upon many factors that simply can't be predicted. For example, Medicare D ended up costing less than expected because of good and bad reasons (good; more seniors using drugs ended up reducing hospital expenses for the other parts of Medicare....grandma not skimping on her diabetes medication means fewer trips to the ER with grandma in a diabetic coma.....bad; drug companies didn't come out with as many new drugs since as before so more and more drugs went generic which meant lower drug prices. That's good for existing drug users but if you think about it for a moment the world would be better if we had more amazing drug breakthroughs, not fewer)
I read it as a feature, not a bug, that the law leaves the system open to continue evolving. Employer based insurance, for example, may continue as the American norm.....or it may weaken and the new norm might become individual Americans buying insurance directly. Libertarian types tend to think the latter is the best ultimate solution but IMO the bill has a conservative virtue of not locking in any particular school of thought regarding what America's health care system will ultimately look like in, say, 50 years.
If, on the other hand, the tax penalty is structured in such a way that makes it prohibitively expensive for healthy people to opt out, it’s effectively a mandate, regardless of your preferred terminology.
OK here is where langugage screws up the argument. We agree the tax code can make some decisions very expensive but that in itself doesn't make those decisions a 'mandate'. So this opens up the question of whether the tax for not carrying insurance is so high that it effectively becomes a mandate thereby open to the Constitutional question of whether Congress can mandate citizens to buy insurance (another debate in itself). Well here's a few issues:
1. You have to ask is the penalty so high that it would effectively be impossible to pay for people subject to it? For example a law that said anyone who has more than two kids will have an income tax penalty of $500,000 per year would probably be deemed as a 'two child mandate' rather than just a tax because most people wouldn't be able to pay it. But $500 a year probably wouldn't.
2. You have to ask is the difference in taxes between a hypothetical person who pays the penalty and one who doesn't greater than other examples in the tax code that we don't consider 'effective mandates'. For example consider the tax savings seen by someone who has another kid, has mortgage interest, or puts solar panels on their homes. Is that tax savings a lot less than the tax savings by the guy who buys himself insurance versus the guy who doesn't?
Here your argument falls apart. The penalty in the so-called mandate is $750 per year. If that's an 'effective mandate' then the tax code is also 'effectively mandating' you to have babies, buy solar panels, go into mortgage debt, make charitable contributions etc. Many people have tax bills that will swing by $750 or even more depending on those decisions. In fact when the bill first passed some analysts were concerned that the problem was the 'mandate' wasn't enough of a mandate....opting to pay $750 per year is a lot cheaper than buying a $3000 insurance policy. If you want to void this bill by Judge you have to assert that a many parts of the tax code are likewise unconsitutional....or you're just advocating judicial activism.
On “The Mandate”
Change water filter to solar panels.....then think about those tax credits TurboTax briefly mentions to you every year....
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tom
A penalty is assessed for failing to comply with the legal obligation to buy health insurance [from a private party, mind you]. The word “mandate” is not necessary for the concept to hold.
OK previously I had someone say to me that "individual mandate" was the operative phrase that made the bill illegal. For the record, that phrase exists only in the minds of pundits who talk about the bill, not the bill itself.
Next, is there a 'legal obligation' to buy insurance in this bill? As I pointed out when you usually hear the world penalty is relates to taxes but is usually something you can legally do. For example, there's a penalty for early withdrawl of your 401K but it's something you can legally do. In this bill if I went to a lawyer or CPA and told him I didn't want to buy insurance but had plenty of money could he tell me "ok just pay the penalty"? If so it's not really a mandate because such professionals are ethically obligated not to advise their clients to break the law.
Had they been able to write the law without the penalty, that everyone except the non-complier gets a tax break, no prob. But that would have defeated the whole purpose, to compel the young and presumably healthy to subsidize the private risk pool.
So this isn't about any principle really here but a rather semantic argument over form. You're saying Congress can pass a $750 penalty on all taxpayers coupled with a $750 credit for all who have coverage or who have a certain level of low income....but Congress can't save some paper and just put a $750 penalty on taxpayers who don't have coverage? Even if you're right this is analgous to those politicians who get candidates kicked off the ballot because the margins on their petitions are a quarter inch off from that specified by law.
Had it been a public risk pool like Medicare, SS, etc., smoother sailing. But the lack of a “public option” was precisely why the bill managed to squeak through in the first place.
Possibly but I don't see why this is important. If a public risk pool is very important then champion it as an addition to the bill. I don't see how it is relevant to the Constitutional question.
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I believe the actual text of the 'individual mandate' can be found here around page 325 http://docs.house.gov/rules/hr4872/111_hr3590_engrossed.pdf
Several quick observations:
1. A longish preamble/discussion in the bill talks justifies it based on the interestate commerce clause. How important that is I'm not really sure.
2. The term mandate does not seem to be present, it's in a section called 'individual responsibility'.
In terms of it being a tax, the following strike me on a fast reading:
1. The term used is 'penalty' rather than fine. As I've pointed out the word 'penalty' often appears in terms of taxes (i.e. a 'penalty' for filing late, for taking money out of your IRA too soon etc.) As has also been pointed out the IRS & gov't is specifically prohibited form using it's law enforcement powers to collect this thing if it is really a fine rather than a tax.
2. The individual reports this on their Income Tax Return. An odd place to report something that isn't really a tax.
3. Perhaps most damming of all (see page 329), individuals are exempt from the penalty if they 'cannot afford coverage'. How do you know if you 'cannot afford coverage'? It's based on whether the cost of coverage would exceed 8% of your adjusted gross income. In other words this penalty impacts you if your income goes higher but doesn't if your income goes lower or disappears. In other words it's a damm INCOME TAX. Note that most actual criminal penalties are not income dependent. When we hear of the fine for passing a bad check or speeding we don't think the fine depends upon our income but this penalty does. Now granted it's unlike the regular income tax in that it's a flat amount as opposed to a % of our income, but nothing in the Constitution says income taxes must be based on a percentage of income rather than being flat amounts.
So now the problem with this thread is that there's no real mandate. We can talk about a mandate but legally there's no real mandate there. You are perfectly free to decline coverage and pay the tax (aka penalty). Doing so is not illegal. Without a mandate you're back to an income tax and when you go back to the income tax you're kinda stuck here when it comes to this court nonsense. You are either advocating a very radical reading of the Constitution which would have to undo all 'social policy' based tax deductions and credits or you're advocating pure judicial activism.
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And that gets to the heart of the matter… are we objecting to the government using financial incentives? Or the language and methodology around this current incentive (or, really, disincentive)?
The heart of the matter is that the people pushing this do not feel liberty is at stake. IMO they compare unfavorably to Birthers. Bithers, who don't believe Obama is a 'natural born citizen' are wrong in fact but right in principle. The Constitution does seem to restrict the office to 'natural born citizens', their problem is not reading the Constitution honestly but evaluating facts honestly. The argument here though is a lot more like those people who get a candidate kicked off the ballot because his petition was supposed to be submitted on double sided paper instead of single sided. Even if they technically have the law on their side it's hard to feel like they are doing a great service for democracy.
At the end of the day the fact remains that even if everything said here by the anti-mandatites is 100% true the fact remains that a refundable tax credit for buying your own insurance would effectively be the same policy. A major law that was built on debate and real compromise is trying to be repealed not by the results of an election but by playing what are essentially laywer games.
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I don't think it would have been very helpful since courts are not limited to such citations. A law may be justified under serveral different clauses, just because Congress cites the wrong one doesn't mean the law itself is unconstitutional or that Congress has to go back and 'rewrite' the laws authority like a kid who got his homework wrong and has a stern teacher who makes him redo it.
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You might be surprised that 'mandate' is not actually in the language of the bill (at least in the section regarding what we call the 'individual mandate').
An across the board tax hike wouldn't resolve the issue that the anti-mandatites are expressing here. Look imagine Congress grants a $2,000 tax credit for having a kid. The fact is you can argue that could have been a $1500 tax cut for everyone rather than a $2K cut for those who have kids. By the reasoning here, that would still be a 'mandate to have kids'. Except it's not and no one seriously thinks it is.
Suppose you already had a $2K tax cut for having a kid and congress expanded that to a $2500 tax cut. Again same thing, I don't have a kid and you do but otherwise we are exactly the same. I pay $500 for not having a kid therefore I'm a victim of a 'have a kid mandate'.
Either way you work it, you can't consistently claim that the 'individual mandate' isn't a tax and must be struck down without also striking down almost every piece of 'social engineering' in the tax code.
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One problem in making it a “tax” was that all revenue-raising bills must originate in the House, per the Constitution. But it was the Senate bill that passed and was signed by the president.
Problem: The bill also raises the tax cap on earnings subject to Medicare's payroll tax and I haven't heard anyone argue against it on the grounds that it didn't originate in the House. If killing the bill in the courts was that easy you'd think it would have been raised by now.
But the point I’m making here is that nobody’s required by law to buy a house, or take the deduction for that matter. This goes back to Jason’s original point about action and inaction.
But here's the problem. There's nothing in the law that says you have to buy health insurance. If you don't buy health insurance you pay a penalty just as there's a penalty for not having a kid, not buying a house, not making various donations to charity etc. etc. If you want to reimagine Constitutional law to void all social engineering aspects of the tax code then go ahead and advocate that. If you aren't, though, you're just changing the rules to kill on particular bill. In other words what is being advocated is 100% pure judicial activism.
The only reason we are talking about the Constitutionality of an 'individual mandate' is because pundits refer to the tax penalty in the bill as a mandate. Technically, though, there's no reason why you couldn't refer to the tax codes benefits for having kids as a 'mandate to have babies'. Now it's not that pundits are being dishonest, it's that when you are talking about whether or no something is a good policy you care about substance. But law cares a lot about form. A true mandate to, say, 'have babies' would be a very scary thing for a gov't to enact. But in terms of policy discussion people tend to gloss over the fact that there's a difference between a 'mandate' to have babies and a policy that increases the costs of not having babes. In form they are not the same thing at all.
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First, it's pretty clear the lawmakers felt they could mandate not only the purchase of a general weapon but very specific types of weapons and ammunition.
Second, the objection is irrelevant. Most people are covered by some type of health insurance. The fact that many would have already been in compliance with the gun law doesn't alter the fact that here you have Congress mandating that they purchase a product from the private sector.
Third and most important is not that the law illustrates the power of the interstate commerce clause (it's almost certainly under the power of Congress to raise a militia), it's that it illustrates the Founding era did not think it shocking that you could have a law mandating the purchase of goods or services.
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1. Not designed to raise revenue? The IRS collects it, it goes into the Treasury. That's raising revenue.
2. Game over, once you say the gov't is free to give deductions you can't specify a real difference between this 'mandate' and tax deductions. How do I get a tax deduction for solar panels without buying them? How do I get a mortgage interest or first time homebuyer deduction without buying a home? Or a credit for a super-efficient car without buying one? If you read this bill as an impermissable mandate to buy insurance then how do you not read the tax code as an impermissable mandate to have children, buy homes, buy solar panels, electric cars, donate to churches and charities etc.? The only difference you have is perception. Pundits talk about the 'individual mandate' in the health care bill but don't talk about a 'have babies' mandate in the tax code...even though the cost imposed on the childless in the tax code is a lot more than the health bill.
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OK let's say you're free to rewrite the law to 'express' the mandate as a tax. What specifically do you change? Do you drop criminal penalties for not complying with the mandate? Nope, the law already specifically says the IRS can't go after anyone criminally. What specifically makes the mandate not a tax except the shorthand pundits and analysts use in talking about the bill?
On “Florida Judge Voids Affordable Care Act”
I thought we were discussing your question of whether anything could be excluded on the grounds that it's not interstate commerce (such as 'in state' commerce). Settle that question first and then move on an ask another if you wish.
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Probably not because I don't think you can construct such a scenario. At best you get once removed and while Justice Thomas is on record of not being a fan of once removed, Scalia is. I hope he enjoyed 'slapping down' those hippies hawking pot for medical purposes. Doing so he's written himself into a corner where he'd either have to let Obamacare stand or be a judicial activist doing what McCain and Palin failed to do in the last Presidential election.
On “The Two Obfuscations of Obamacare”
If I take money out of my 401K I incur a penalty on my taxes. If I file my tax return late I incur a penalty as well.
It seems to me the world 'penalty' exists not as a legal term but a policy one. Legally/policy wise 'penalty' seems to mean a type of tax that I have the option of choosing either accepting and paying or avoiding by doing something different.
Herein is the problem with this whole mandate argument. The bill ACTUALLY DOESN'T HAVE A MANDATE! There is no crime of refusing to buy insurance. The individual is not commanded to buy insurance. The worse that happens is your tax bill may be a bit higher, exactly the same thing that happens if you don't have kids, don't have mortgage interest, don't make lots of contributions to charity or don't put solar panels on your home. You can't logically challenge this as a mandate unless you want to argue all 'social engineering' aspects of the tax code is likewise an unconstitutional mandate.
On “The Mandate”
The problem with the discussion about the mandate is the uncomfortable fact that there is no actual mandate in the law.
On “The Two Obfuscations of Obamacare”
Even better, consider the Earned Income Tax Credit. If you have a kid it can be as much as $3K. If you don't I think the best you can get is $500 or so.
Guess what. You're a Buddhist monk living in a monestary doing a light, min. wage job. It's Feb., you do your taxes and discover you're getting $500 back due to the EITC. Your fellow monk, though, is taking care of a kid he had before he decided to join. He's exactly like you but gets back $3K.
OMG, the Federal Government has just MANDATED people to have kids!
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You know if you simply had passed a $2,000 refundable tax credit for anyone who buys their own insurance you'd have effectively the same thing as this so-called mandate!
Now explain to me why this huffing and puffing is about something of substance rather than trying to dither about form?
On “Florida Judge Voids Affordable Care Act”
I suspect it's because for large companies the cost of health insurance is basically the cost of the people covered plus an administrative fee. For a terminated employee on COBRA, if they end up paying more than they use then that's great for the employer. It helps lower the cost for all their remaining employees. But if they cost more than they pay then that just raises the cost to remaining employees.
Now how do they know? They don't but they figure if you're laid off your money is probably very tight, why would you be so eager to keep coverage with what little you have? Maybe 'cause you know more about your health than they do. Hence better safe than sorry, make you jump thru some hoops.
On “The Two Obfuscations of Obamacare”
As a thought experiment: Suppose we levy a tax on everyone. You can get out of it by spending two days a week breaking rocks in a quarry, in leg irons. The beneficiary is a multinational mining corporation
Wouldn't this be effectively the same thing as the gov't saying everyone is taxed, say $5,000 but if you work two days a week in a big mine you'll get paid $5,000 a year? Is this functionally different from saying, say, that military pay in combat zones is immune from income tax?
It’s just a tax, I’m sure you’ll have to admit — not a penalty in any sense at all.
What exactly is a 'penalty'? Think about it. On my taxes withdrawing early from an IRA incurs a 'penalty', filing late has a penalty and so on. I suppose you can say the death penalty or 20 yrs to life is a 'penalty' for murder but we don't often talk like that, we usually talk sentences or punishments.
It would seem that 'penalty' is not a legal term but a policy term to denote a tax that is optional. Optional in the sense that you can avoid it or opt to embrace it. If, for example, you're in a financial bind you can take money out of your IRA and simply pay the penalty (aka tax). or if you're having trouble filing your CPA can advise you to pay the penalty for filing late.
A Professional (meaning someone like a lawyer or CPA who is under ethical obligation to uphold the law) can ethically advise you to take a penalty, but cannot advise you to break a law. The lawyer can say "file this form late and pay the $50 penalty" but I don't think he can ethically advise you to "write this guy a bad check, then pay the $50 fine for passing bad checks". The first is an option the law says is an ethical option the second is an illegal, but with a realtively minor punishment.
Likewise:
The purpose of a tax is to raise revenue for the government.
No problem there, last I checked the money collected by the IRS goes to the gov't.
As such, taxes should be applied generally, and according to some standard of justice (this is what the “general welfare” clause requires, as I’ve already explained). A nearly ideal standard here is individual apportionment, conditioned on the ability to pay. The income tax and the state-level sales taxes are both plausible efforts in this direction, although neither is perfect, of course.
Here it would seem the charitable deduction is a good analogy. Two people look exactly alike, same job, same income etc. One guy, though, donates a lot and the other donates nothing. One has a smaller tax bill. You got 'general application' of tax liability but the deduction can be justified on the grounds that such donations reduce the demands on the gov't for relief therefore the more charitable taxpayer has a lower tax burden. That would seem to apply here where those buying health insurance are reducing the gov'ts need to subsidize those who don't have it as well as cover their own expenses rather than appealing to the gov't should they need it.
On “Florida Judge Voids Affordable Care Act”
Are you saying 'everything' because you can't think beyond commerce?
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Actually not quite. The two laws that were struck down (a law about domestic violence and another law about having a gun near a school) were built on that 'more than twice removed' argument over commerce. That law that stood was the Federal law prohibiting pot even when a state passed a law permitting it for medical purposes and took pains not to involve 'interstate commerce' by demanding the pot be grown and sold in state only. Even though the Feds were trying to prohibit interstate commerce in pot and the state law seemed consistent in that, congress's ability to regulate interstate commerce still extends to trumping such state laws that simply 'effect' the interstate market by, say, reducing a state's demand to buy pot.
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