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Yes, It's a Tax


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"Absolutely not a tax increase."

"You can't just make up that language and decide it's a tax increase."

"My critics say everything is a tax increase."

--President Barack Obama

"The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax."

--Chief Justice John Roberts

The individual mandate to purchase health insurance and President Obama have an interesting relationship history. When he was a candidate on the campaign trail, Obama decried a mandate to purchase insurance. In debates, he ridiculed Hillary Clinton for including it as part of her health care plan.

After the election, President Obama embraced the individual mandate as a sensible way to force individuals to do the responsible thing and purchase insurance. The IRS was given the power to assess a "penalty" on people who could not prove that they had purchased federal government approved health insurance.

The IRS enforces tax law, but the President insisted that the penalty was not a tax. The first three quotes above come from an interview the President conducted with ABC's George Stephanopoulos. Every time the news anchor challenged the President over whether the individual mandate was a tax, Obama denied it. He even mocked Stephanopoulos for trying to read the Webster's dictionary definition of a tax.

The final quote is from Supreme Court Chief Justice John Roberts' opinion in NFIB v. Sebelius, this week's ruling on the constitutionality of the law. I don't agree with Justice Roberts' conclusion, but it is fascinating that the only way he could find to declare the individual mandate constitutional was to treat it as a tax.

President Obama knew that calling the individual mandate a tax would turn many Americans against the bill. However, when it came time to defend the law in court, he directed the Solicitor General to argue that it was a tax.

When it was politically inconvenient to say it was a tax, the President denied the truth about the individual mandate. When it was judicially prudent to claim it was a tax, he did so without reservation.

The fact is that this is a tax increase on millions of middle class Americans. Lower income citizens will be eligible for Medicaid and tax subsidies to purchase insurance. Those with higher incomes are likely to face a catch-22: pay a moderate tax penalty or purchase expensive insurance.

Insurance isn't getting less expensive. In fact, since passage of the so-called Affordable Care Act, the average premium for those in the individual insurance market has gone up by $2,313.

This fall, the federal government will issue regulations dictating the minimum level of coverage for insurance plans in federal exchanges. In all likelihood, these requirements will push premiums even higher. For obvious political reasons, the administration is holding back on issuing these regulations until after the election.

Health reform was sold to the American people as a way to reduce the cost of health care in our country. The Congressional Budget Office could find no evidence that the provisions in the bill would actually lower the cost of care in the first ten years. Even in the second decade of the bill, it is uncertain whether there will be any real monetary benefits to giving the federal government unprecedented control of health insurance.

The Affordable Care Act was a classic bate and switch. We were promised no tax increases on the middle class. Now, the Supreme Court confirms that the mandate is a tax. We were promised savings for both families and the government. Instead, both government and independent studies show that the law will increase the federal deficit.

Just because the court says something is constitutional, does not mean that it is wise. If we want real reform, if we want to balance our federal budget, if we want to restore economic rights, we have to fully repeal the President's health care law.

I am afraid that with this ruling, the Supreme Court has given Congress an almost unlimited power to order the American people to purchase something as long as it is done through the tax code. It is a terrible precedent, but a wise legislature and a prudent president can reject this power and protect our rights.

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