Health Care Decision Dangerously Invites Congress to Expand Taxing Power
June 29, 2012The 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. Read More »