Health Care Decision Dangerously Invites Congress to Expand Taxing PowerEileen J. O'Connor • June 29, 2012 • 10:40 am
The Supreme Court ruled yesterday that the Affordable Care Act’s individual mandate is not unconstitutional because it does not exceed Congress’ taxing power. While requiring individuals to buy health insurance policies they don’t need (more on that later) was not within Congress’ power under the Commerce Clause, apparently nothing is beyond Congress’ power to tax.
The decision asserts that no one would argue that Congress could not impose a tax on a homeowner for failing to install energy efficient windows. Really?? If lawmakers thought they could have imposed a tax on homeowners for failing to install energy efficient windows, they probably would have tried something like that long ago. Until now, however, Congress has limited itself to providing deductions and credits for activity it wants to encourage, and providing excise taxes on, or no deductions or credits for, activity it wants to discourage (or profit from).
The Internal Revenue Code imposes income taxes on income, alternative minimum taxes on alternative minimum taxable income, social security and Medicare taxes on wages, estate taxes on the value of estates, gift taxes on the value of gifts, and excise taxes on a mindboggling variety of things and activities. The Affordable Care Act represents the first time the Tax Code has imposed a requirement to buy something and provided a penalty – now, according to the Supreme Court, a tax – on not doing so.
The Court decided that the penalty for failure to buy the mandated insurance coverage was a tax, notwithstanding that its proponents swore it wasn’t a tax, the law doesn’t call it a tax, and unlike any other tax, no criminal penalties can be imposed for failing to pay it, and the IRS cannot file liens or levy on the property of anyone who fails to pay it.
To make matters worse, what the Supreme Court okayed yesterday was Congress imposing a penalty – excuse me, tax – on people for failing to buy insurance they do not need. It has long been lost in the debate over “affordable care” that among the details buried in those thousands of pages of legislation is a requirement you carry insurance coverage for the treatment of conditions you could not possibly encounter. The health insurance policy of an unmarried man, for example, must cover maternity and infant care services. So must the policy of a post-menopausal woman. So must everyone’s, in fact. The policies of teetotalers must cover treatment for alcohol addiction and other substance abuse problems. So must everyone’s. Don’t smoke? No matter, your policy must cover smoking cessation programs. These are just a few of the requirements of “minimum essential coverage.”
So while we gnash our teeth about the Supreme Court holding that Congress can, using its taxing power, penalize you (by imposing a tax on you) for not buying something you don’t want, let’s not forget that the holding also means you can be penalized – excuse me, taxed – for not buying something you do not need.
Yesterday’s holding is a dangerous invitation for Congress to further expand a taxing power it already has been abusing for years, using the tax code to do more than merely raise the revenue required to fund legitimate government functions. Congress has used the Tax Code to reward behavior it favors, punish by comparison that which it disfavors, curry favor with constituents, and reward contributors.
And now, it looks like the Supreme Court has given lawmakers carte blanche to use it to impose responsibilities and punish failure to comply.