Congress, Constitutional Law, Courts, Politics, Society, Supreme Court

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. “… 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.” — Jonathan Turley

    I can see where you might have a theoretical problem with the “functional” approach to taxation, Professor, but the practice seems so deeply ingrained in American society as to have become a moot point. For example, we have all sorts of “sin” taxes — like on alcohol and tobacco consumption, for example — that ostensibly seek to discourage people from enjoying themselves through ingesting various narcotic substances. And then we have the almost infinite “tax cuts” that aim to provide “incentives” to people who otherwise wouldn’t work quite so hard to make even more money than they would otherwise without government encouragement. And I assume that you know of the income tax deduction for home mortgage interest which seeks to influence people towards becoming “stable” property owners rather than renters or homeless wanderers. So, using the U. S. tax code to influence behavior, either as “punishment” or “incentive” seems almost too common for comment.

  2. Do we want a single payer system?

    Game this system so it becomes one.

    Arrange for a movement with sites where you can pledge to arrange for the lapse of your health insurance on an agreed date. Give the businesses, who parasite on us, notice that we are quitting their alternative.
    They will run to Congress and say DO SOMETHING. And Obama will have to order it planned to take care of us under the tax/penalty alternative.

    This could result, if many do this, say circa 150,000,000, then there will indeed be panic in the health care, pharma, and health industry.

    We will all be taxed/penalized through our tax returns, eventually. The poor will be handled in a prescribed fashion but the Repubican governmors can not opt out.

    There were to be 30 million new covered persons. Instead there will be 250 million.

    Results: A single payer system.
    ================================

    Government will do it like they now do with Medicare and Medicaid. Only instead of the current millions covered, we ALL can be covered by the penalty/tax alternative.

    Hallelujah for Saul Alinsky.

  3. BarkinDog here. Boy that eye doctor charged a lot of money for some peptobismo. The penalty imposed if one does not join up for medical care is a tax penalty. If one does not show up for the draft the penalty is jail. That Choice Not An Echo statment out of the Romney internment camp is a phrase from 1964 and the Barry Goldvasser campaign, It is fitting that they would bring back Barry on the issue of medical care. That is where Willard is on the healthcare issue now that he has done his job in Massachusetts. ObamaCare is a choice of the Dems not an echo of RomneyCare.

  4. Mike S:

    Not questioning you, but curious I am about what your view of the health care system in Switzerland might be.

    I think looking into their system as an example to which we might learn a few things.

    1. “curious I am about what your view of the health care system in Switzerland might be.”

      Darren,

      I’m awaiting the arrival of a power cord for my laptop and my Kindle is a lousy research tool. I will look into it and get back to you. I have seen studies though that rate our healthcare 14th or 15th in the world. I’m sure you’ll agree that is far from acceptable, whichever health care insuring method you would prefer. In my life I have been blessed with excellent health insurance from work. Given my 30 years of severe heart disease I would not be going to extremes to say that my insurance saved my life and that is especially true about Medicare. I’m doing fine, but I’ve got children and grandchildren who perhaps won’t be as lucky if we don’t change the system.

  5. SantoBernardoDog here. Sittin in for BarkinDog who is taking his pal to the eye clinic. The Willard Milton Romney folks said yesterday that his medical care program for Massassachusetts was “A choice, not an echo”. I dont know where they get that phrase or where it comes from but FartinDog says that a tax is like a choice if one pays it and like an echo if one pays it year after year.

  8. Pingback: Ben LaBolt Lies On CNN Once Again For Obama Campaign (Video) – Red Alexandria

  10. I realize that relying on politicians to be accurate isn’t very wise. However, it’s one thing to dissemble about something that’s arguable. It’s another to lie shamelessly about a factual matter and claim that the US government never argued that the penalty is a tax. Quite apart from the short segment of oral argument in the Supreme Court devoted to this issue, if you look at the briefs of the federal government on the merits in the 11th Circuit (April 1, 2011 Brief for Appellants) and in the Supreme Court (Jan. 6, 2012 Brief for Petitioners (Minimum Coverage Provision), 2012 WL 37168), the government clearly and unambiguously argued at length that the penalty is a tax. Here are some samples from the Supreme Court briefs:

    “The practical operation of the minimum coverage provision is as a tax law. The only consequences of a failure to maintain minimum coverage are tax consequences: non-exempted federal income taxpayers will have increased tax liability for those months in which they fail to maintain minimum coverage for themselves or their dependents. That additional tax liability will be calculated on the basis of the taxpayer’s household income (subject to a floor and a cap), reported on the taxpayer’s federal income tax return, and collected by the IRS.”

    “The practical operation of the minimum coverage provision is as a tax law. It is fully integrated into the tax system, will raise substantial revenue, and triggers only tax consequences for non-compliance.”

    “Congress placed the minimum coverage provision in the Internal Revenue Code (in Subtitle D, covering ‘Miscellaneous Excise Taxes’), gave the IRS enforcement power over it, and used the federal income tax return as the reporting *58 mechanism. In addition, Congress’s taxing power was expressly invoked to defeat constitutional points of order against the minimum coverage provision in the Senate. See 155 Cong. Rec. S13,830, S13,832 (daily ed. Dec. 23, 2009); see also 2010 House Report Pt. 1, at 265 (describing minimum coverage provision as a ‘tax on individuals who opt not to purchase health insurance’). And during the debates, congressional leaders defended the provision as an exercise of the taxing power. E.g., 156 Cong. Rec. H1882 (daily ed. Mar. 21, 2010) (Rep. Miller); id. at H1826 (daily ed. Mar. 21, 2010) (Rep. Slaughter); 155 Cong. Rec. S13,751, S13,753 (daily ed. Dec. 22, 2009) (Sen. Leahy); id. at S13,581-13,582 (daily ed. Dec. 20, 2009) (statement of Sen. Baucus); see also Staff of Joint Comm. on Taxation, Technical Explanation of the Revenue Provisions of the ‘Reconciliation Act of 2010,’ As Amended, in Combination with the ‘Patient Protection and Affordable Care Act,’ 31 (Mar. 21, 2010).”

  11. Some “sheeple” think that private enterprize and the “free market” have given the U.S. a good health care system. Then again, some people think FOX is actually a News network. Generally anyone, anywhere on the political spectrum that uses the term “sheeple” is a smug elitist whose dim wit bespeaks a vast over estimation of their own intellectual gifts.

  13. D 1, July 5, 2012 at 12:04 pm

    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.
    ==================================
    Folks below a certain income level will be exempt.

  16. They’re all FOS. Roberts’s bending over backwards to justify changing his vote is an example of political maneuvering. Whatever his goal was, who knows. But he is now no longer a “principled jurist,” but a political hack, an opportunist, just another government bureaucrat.

    Perhaps we need to ditch this federal monopoly in territorial control and decentalize, and allow competition, and enforce valid contracts. (http://www.lewrockwell.com/hoppe/hoppe26.1.html)

    When will the sheeple finally realize that central planning just doesn’t work? And it can’t be made to work.

    The Supreme Court doesn’t even care about the Constitution anymore, when an incoherent decision such as this occurs, and when they vote 8-1 to allow police to break into people’s homes without a warrant, when they vote to allow police to strip-search people arrested for parking tickets or walking dogs without a leash!

    What a crazy, country, Amerika. “You will buy an insurance policy! And you will enjoy it!”

  17. Call it what you will, both sides are doinig so, using “tax” and “penalty”
    Its working in Mass. http://seattletimes.nwsource.com/html/nationworld/2017846045_massmandate27.html

    http://mittromneycentral.com/resources/romneycare/#5 (Mitt Romney central which supports Romney 2012

    5 – Is RomneyCare bankrupting the state of Massachusetts?
    Not at all. Numerous unbiased organizations such as FactCheck.org and The Massachusetts Taxpayers Foundation – a think tank funded by business – determined that the cost of Romneycare is “relatively modest” and “well within initial projections.” FactCheck.org also concludes “Claims that the law is bankrupting the state are greatly exaggerated.” Massachusetts Taxpayers Foundation goes on to say:
    “Despite claims to the contrary, the Foundations recently released analyses of the cost to taxpayers of achieving near-universal access to healthcare showed that the average yearly increase was only $88 million, well within original estimates. Critics ignore the fact that the fundamental problem is not the costs of Romneycare but rather the unprecedented collapse of state tax revenues.”

  19. I only do this for I am ROTFLMAO with these folks and the kanipshins they are going through over “wording”,so with out further ado here’s the head exploding guru on this issue.

    These Clueless Republicans Must Stop Willfully Ignoring the Substance of This Unconstitutional Obamacare Disaster
    July 03, 2012

    BEGIN TRANSCRIPT

    RUSH: If this keeps going this way, we’re going to lose it all, folks. Unless some people get their heads in the game and focus on what really happened here and what really is happening, we’re going to go down the tubes. (interruption) No, no, no! This silly debate about whether it’s a penalty or a tax. Looking for silver linings. What the heck does it matter? All that is irrelevant! And you’ve got Romney’s guy going on MSNBC saying, “No, no, no, no, no! We don’t think what the court said is a tax. It’s a penalty.”

    http://www.rushlimbaugh.com/daily/2012/07/03/these_clueless_republicans_must_stop_willfully_ignoring_the_substance_of_this_unconstitutional_obamacare_disaster

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