Obama Campaign Spokesman: It’s a Penalty, Not A Tax

Some of us were highly critical of the Roberts decision on health care — finding that the federal government could impose the individual mandate as a tax even if it could not be justified under the Commerce Clause. This followed the Court rejecting the tax status for the purposes of the Anti-Injunction Act and the fact that the Obama Administration — including the President — long denying that it was a tax. The Administration changed its position in court and argued that it was a tax, if the Commerce Clause did not sustain the mandate. That has produced a political backlash after the Court recognized it as a tax all along. However, now Obama campaign spokesman Ben LaBolt said that President Obama denies it is a tax and even denying that the Administration ever said it was.


In an interview with Soledad O’Brien, LaBolt was asked: “The Supreme Court has said it’s a tax. What does he believe?” He responded “That it’s a penalty. You saw our arguments before the Supreme Court…”

O’Brien:”So then he disagrees with the Supreme Court decision that says it’s now a tax?” O’Brien asked.

LaBolt: “That’s right. He said that it’s a penalty. You saw our arguments before the Court.”

When O’Brien correctly noted that Solicitor General, Donald Verrilli, argued before the Court that it is a tax, LaBolt says she is simply wrong: “It never referred to it as a — it never referred to it as a tax,” LaBolt said. “It said that it was a penalty. And that’s under the section of the law that is the tax code, but it said very specifically that it’s a penalty.”

This rhetorical fight is likely to increase with the campaign since the law was saved only by the Administration saying in court what it denied to the public. More importantly, it highlights in my view the problematic aspect of Roberts declaring this to be a tax — and endorsing a “functional” approach to taxation that allows the government to tax people to influence their choices or decisions. Ironically, LaBolt is agreeing with Scalia and the dissenting justices that this is clearly a penalty — a view that would mean the mandate was unconstitutional.

It is a curious position for the President — to take the win but deny the basis for it. It is a lot like winning Wimbledon and following the cup ceremony by noting that your winning shot really was outside the line. Notably, the Solicitor General is supposed to advance the arguments of the Administration — and ultimately the Chief Executive. Here the President is insisting that this is a penalty but his lawyer argued it was a tax. Verrilli would likely respond that the Justice Department is given the authority to frame the legal argument needed to sustain federal law. However, you appear to have both Congress and the President denying that this was ever a tax. In the very least, it will fuel criticism of Roberts who will look a bit foolish if neither the President nor his opponents agree that this was ever a tax.

Source: CNN

64 thoughts on “Obama Campaign Spokesman: It’s a Penalty, Not A Tax”

  1. “Romney is trying to sell the idea that Obama’s health care bill contains a tax because the Supreme Court said it does. And the health care law that he signed in Massachusetts contains a penalty (or a fee) because that’s what he called it at the time and the Court offered no ruling on those state-based laws.

    “Massachusetts’ mandate was a mandate, was a penalty, was described that way by the legislature and by me, and so it stays as it was,” Romney told CBS’s Jan Crawford on Wednesday.

    That’s relatively thin gruel from a policy perspective, but the truth of the matter is that Romney had to find a way to get politically right with his party’s stance on the Court ruling. (And if you wonder whether the Romney campaign was trying to slip the position adjustment in while no one was looking, consider that it decided to make that news on a national holiday.)

    Ed Rogers, a senior Republican strategist, said he was “stunned” by the initial comments from the Romney campaign on the tax vs. penalty debate. “I knew a ‘clarification’ had to be coming,” said Rogers. “I’m surprised we had to wait four days for a Romney correction. What Romney did as governor of Massachusetts is easy to contrast with what he would do as the president of the nation.”

    That sentiment was echoed by others in the Republican strategist community.

    “The most important thing is that the candidate has it right,” said one senior Republican operative granted anonymity to speak candidly about his party’s nominee. “It’s a tax and should be characterized as such. I don’t know why anyone else would have said otherwise. Perhaps some were overthinking how it would be compared to what he did in Massachusetts.”

    The political reward of Romney’s new — or, at the very least, clarified — position on the health care ruling is obvious. Republicans have long scored political points by bashing Democrats as lovers of big government who want to finance growth in the size of the bureaucracy by raising taxes. That the key provision of Obama’s health care law was upheld due to a tax provision, then, fits perfectly into an advantageous political frame for Romney — and Republicans more broadly.” Chris Cillizza, Washington Post

  2. We should not be concerned or surprised by political posturing, no matter which side it comes from. The bottom line is that the Supremes have declared it constitutional. Time to implement it.

  3. I wonder if this will fall the way of the eminent domain issue a couple years ago, where the SCOTUS ruled local governments could steal private property and provide it to developers to build commercial and retail areas whereupon various state legislatures enacted laws prohibiting such practices. I hope congress will just repeal it in its entirety as it was such a dubious act of smoke and mirrors to begin with it cannot be trusted.

    All the rhetoric aside, the pols have to admit the republicans swept into congress significantly due to the majority of the public’s hatred of this law.

    To me this whole affair makes similarities with why The Occupy movement targeted the financial and other sectors of society. The financial industry became mostly self serving but this time it was to the great expense and detriment to investors. And, it lead to the meltdown beginning in 2007.

    The obamacare disaster has similar effects. To me an unacceptably high number of politicians serve ONLY their own self interests to the detriment of the citizens. But we are to blame for this happening.

    We seem as a society to believe politicians and government are the answer. If they believe Jones is a horrible politician they put all their faith in Candidate Brown to come along and save the day. The cycle then continues. Hence the political class retains its grip on the throat of Americans. I wish I knew how, but somehow we find a way to reign them in and significantly limit the damage they can do to our country.

    The frustration in our state is that people here HATE taxes yet the politicians always find a way to make us one of the highest taxed states in America. We twice formed initiatives and approved them on the ballot to limit the increase in property taxes per year only to have the legislature file a lawsuit overturning the law or writing their a new law to go against our wishes. Sadly, we keep voting the status quo in every election.

  4. What’s in a name? That which we call a rose
    By any other name would smell as sweet.

    ~Romeo & Juliet, Act II, Scene II

  5. Bill H.,

    It’s a damn distinction without a difference……. Remember Bastille Day is right around the corner……. Nine days from today….. Then there’s that War with Mexico….. I think July 7th……. But the battle or skirmish in Jacksboro…… Also known as the Red River was fought on July 12th….. It had another name too….. But it’s still the one that was during the Civil War……

  6. “Mitt Romney suggested in a Wednesday interview he would no longer nominate a judge like John Roberts, now that the U.S. chief justice has cast the deciding vote to uphold the Affordable Care Act.

    On his campaign website, Romney states that as president he “will nominate judges in the mold of Chief Justice Roberts and Justices Scalia, Thomas, and Alito.” But apparently Roberts no longer makes the cut.

    CBS reporter Jan Crawford asked the Republican nominee if he’d still nominate a justice like the Bush-appointed Roberts, knowing what he knows now.

    “Well, I certainly wouldn’t nominate someone who I knew was gonna come out with a decision I violently disagreed with — or vehemently, rather, disagreed with,” Romney said. “And he reached a conclusion I think that was not accurate and not an appropriate conclusion. But that being said, he’s a very bright person and I’d look for individuals that have intelligence and believe in following the Constitution.”

    Asked if he’s troubled that Roberts is said to have switched his vote, Romney echoed the criticism — quickly becoming an article of faith on the right — that the chief justice’s vote was cast on the basis of external political pressure.” TPM

  7. I do get the purpose of today’s article. To further politicize the healthcare decision and give RomneyCare a boost. It is all in names: tax, tax penalty, penalty excise tax. RomenyCare, ObamaCare, same thing, different day. Is this the WillardBlog? Last week Obama was the “Imperial President” because he took executive action to save college kids who have lived here their whole lives from being deported.

    I have decided that if Obama wins that I will support the Turley Court Packing Plan. If Willard wins I am taking all of my money out of the stock market.

  8. How are they going to tax people that have no insurance if ther are Federal tax exempt. and decide not to get insurance. I talked to my insurance company about the rule that allows up to 26 year olds on insurance. I was told 2500 dollars per year per dependant. Who can afford that.

  9. “The sad truth is that Republican governors and state legislators have been claiming ever since ACA was enacted that the expansion, even with the “sweet” super-matches, would bankrupt their budgets. And the even sadder truth is that many of these solons don’t think of this as primarily a fiscal issue, but as an ideological test of their hatred of the “welfare state.” There’s a reason southern Republicans, perhaps even more than their compatriots elsewhere, love Paul Ryan’s Medicaid “block grant” proposal. They want significant reductions in the existing Medicaid program, along with structural changes that would make it unrecognizable as a low-income entitlement. This involves a philosophical objection to giving poor people free health insurance, not just a budgetary concern.” NPR

  10. “It is a curious position for the President — to take the win but deny the basis for it.” (JT)

    Curious position? For a politician during an election campaign?

    I said it before and I’ll say it again … Roberts presented Obama with a poison pill.

    And what Bob Esq. said.

    And … talk about legislating from the bench …

    And … time to implement JT’s suggestions regarding a restructuring of the supreme Court.

  11. If it’s not a tax then why is the IRS involved. The IRS will be involved in healthcare now. They can’t do the jobs they have now right. This program takes from Medicare and taxes the companies that make medical equipment. Where do you think those costs are going to be passed to. That’s right us.

  12. Romney’s problem is that he pays so few taxes…….way too many off shore investments.

  13. I researched andwrote about this at length almost three years ago.

    On George Stephanopolous’ “This Week”, Senators Grassley and Baucus were interviewed along with Joint Committee on Taxation chief of staff, Thomas Barthold. Barthold offered up the following tidbit on the mandate’s “penalty excise tax”:

    “Senator Grassley, the penalty proposed in the Chairman’s mark, is as you observed, it’s structured as a penalty excise tax, we have other penalty excise taxes in the internal revenue code. ”

    So it has been known in political circles for some time that the mandate’s penalty in effect is what’s known in IRS parlance as a “penalty excise tax.”

    Any protestations by Obama or other democrats that they in fact did not pass a tax is simply politics.

  14. A tax is not a penalty, but penaltys can be taxing, and so on, and so forth. …

  15. In classical logic, the law of non-contradiction (LNC) … is the second of the three classic laws of thought. It states that contradictory statements cannot both be true in the same sense, e.g. the two propositions “A is B” and “A is not B” are mutually exclusive.

    http://en.wikipedia.org/wiki/Law_of_noncontradiction

    The only way the law can be deemed constitutional, under the SCOTUS ruling, is to deem the mandate a tax.

    For the administration to argue that it will be enforcing a penalty instead of a tax, under the SCOTUS decision, is to openly admit that it will be acting in an unconstitutional manner.

  16. Disappointing but not surprising.
    While Mr. Romney clearly has similar problems with this issue, one has to wonder if the President has learned anything from his decision to adopt a Republican idea he rejected for good reason then accepted in the naive hope that Republicans would support health care reform of any type.
    Single payor was the way to go but he did not choose wisely and the rest of us will suffer for it.

  17. “… finding that the federal government could impose the individual mandate as a tax even if it could not be justified under the Commerce Clause …”

    Actually it is not a tax, it is a tax penalty that anyone, circa 2014, can choose to pay instead of securing health care insurance.

    If they choose the penalty instead of a health care policy, the penalty is to be calculated and then placed on the 1040 tax return, then sent in like any other tax penalty, such as filing late.

    Those who already have health care coverage need not worry about it.

    The semantical word storm going around is mostly much ado about nothing, because a tax and a tax penalty are different concepts, calculated differently, and placed on different lines on the tax return.

  18. It’s called “having your cake and eating it too,” and Obama does it all the time. Such as saying in court that the drone program is so secret that we cannot even admit that it exists, and then issuing a news release that the top Al Queda leader was killed by one of our drones.

Comments are closed.