If you purchase health insurance, you receive a reward in the form of reduced tax liability. What do I win?
No. The only way that could be true is if, in fact, Congress raised income taxes on everyone (which they certainly did not) and then give a tax break to those who purchase insurance. That did not happen. The “tax” or penalty is only applied to those who do not engage in commerce with a private company.
Words have meaning and, contrary to what many here seem to think, the law does distinguish between a tax and a penalty. Twisting the words like you and others have done is not sufficient to be able to use the terms tax and penalty interchangeably.
Actually, they did raise income taxes on everyone and give a tax break to those who purchased insurance.
You are correct: the law distinguishes between a tax and a penalty. This particular enactment is called a penalty, but functions like a tax.
The actual term is “shared responsibility payment”. But you can call money you have to pay to the government whatever you like.
You got a cite for that? Just saying that does not make it so.
The actual term is “penalty” - it is used again and again in that section of the law.
The Supreme Court said something about it recently. Perhaps you haven’t heard.
Yes, the supreme court rewrote the law and substituted “tax” for “penalty”. That was equally absurd.
ETA: I guess the word “They” in your post referred to the Supreme Court?
No matter how many people say this, no matter how angrily they say it, and no matter how often they repeat it, this will still not be true. The ruling changed nothing about the penalty. It did not change the way it is applied, how it is collected, or how it’s handled. The court found that the Constitution allows for the creation of the penalty because it falls within Congress’ authority to levy taxes even if the penalty does not behave exactly like a tax. Thousands of analogies were deployed as people argued about the law (broccoli, interstate commerce, drivers’ insurance, the list goes on. This is one of them.
Yes, they do. Sometimes it’s possible to say exactly the same thing using different words: “I am ten years older than I was in 2002” and “In 2002, I was ten years younger than I am today.”
It would be an insane legal system that treated the two statements differently. What matters is not the specific words that are used to describe a situation, but rather the situation itself.
Do you seriously advocate a system in which it’s the words used to describe a situation, not the situation itself, that pertains?
If you purchase an object you pay less tax. You are just falling into the same weird mental-block that Magellan is.
Suppose that, due to write-offs and legal cleverness, prior to assessing either the housing credit or the insurance penalty, my total tax bill is zero dollars.
If I did not buy a house, this does not mean anything for me–I lose no money.
But if I did not buy insurance, this does mean something to me–I will lose money.
So then, there does appear to be a functional distinction between the two policies.
But am I misunderstanding something?
There is no functional distinction. Your beginning premise obscures what’s happening.
Your total tax burden prior to writeoffs etc. is X. You have writeoffs equal to Y. If you have insurance, you gain an additional writeoff, Z, that may be sufficient to bring your equation to X-(Y+Z)=0.
Or you may express it this way: Your total tax burden prior to writeoffs etc. is X. You have writeoffs equal to Y. If you do not have insurance, you gain an additional tax burden equal to Z. If your writeoffs are sufficient, your equation may be (X+Z)-Y=0.
I have to admit I still don’t understand your point.
Forget about writeoffs. Below a certain level of income, you don’t have to pay any taxes at all. So say I make that small amount of money. And say I don’t buy a house. In that case, nothing happens. I pay zero dollars. But say I didn’t get insurance. (It probably could have been had for free through medicaid or through subsidies or whatever, but just say I never bothered to go through the process.) In that case, something happens–I pay a penalty.
That’s the functional distinction. The rules about insurance can add liability in a type of case in which the rules about housing can not add liability.
I’m obviously not pro-Obama and wasn’t pro-Obamacare. Obamacare is fine if you think the most important thing is everyone has health insurance, my position has always been you need those death panels that Sarah Palin was talking about or something akin to them to control costs or I don’t care how much health insurance you give the country we will not be able to afford it long term.
Anyway, that’s neither here nor there–I was pretty sure the individual mandate would be struck down because it was essentially a fine levied by the Federal government on individuals in an area not covered by any of the Federal government’s enumerated powers or covered by any prior interpretation of the Commerce Clause. FWIW, after reading Robert’s opinion, he changed my mind–I agree with him it can reasonably be seen as part of the taxing power.
(I do wonder how this fits in with some of the crazier liberals on these boards opinions that the SCOTUS is invariably conservative now, with guys like Roberts being nothing but front men for the GOP.)
(Following up to my previous post)
There are exceptions to the penalty granted for “financial hardship” so whether my particular example works depends to some exten on how the exceptions are calculated.
But the concept should be clear enough–the insurance rules penalize, while the housing rules don’t, because the insurance rules serve to increase liability in cases where the housing rules do not. Low-income situations may or may not turn out to be relevant examples, but the general principle still holds so far as I can see.
And, controversially, I’d say that even if there are no actual relevant situations (i.e. in the real world) where the insurance rules add liability and the housing rules don’t, nevertheless, what makes for the difference between a penalty and a reward isn’t only what actually happens but what would happen under various hypothetical circumstances. (Similarly, what makes for the distinction between an animal with a backbone and an animal with a heart isn’t just which animals actually have them–those are the same animals in each case–but also what would be true about hypothetical heartless and/or backboneless animals as well. That probably came out completely confusing didn’t it. Never mind. I should delete it.)
No, they did what they have always done, and construed the law in such a way as to render it constitutional. Constitutional avoidance is among the court’s most firmly established rules of construction.
No, that’s false. The mandate would not apply to you at that income level, even if you forswore Medicaid. You would pay zero dollars.
I just don’t see the principle. There are similarly situations where, if you have a mortgage, you owe zero taxes, but if you don’t have a mortgage, you have a tax liability. How is this functionally different from a situation where, if you have health insurance, you owe zero taxes, but if you don’t have health insurance, you have a tax liability?
Yeah, you guys are more right than I thought. I worke d it out using a mental chart this morning on the way to work…
There is a difference, but it’s not a functional one. Functionally, they’re the same.
But they differ in what is said about what causes the outcome to be what it is. In the case of housing, what you owe is said to be the result the money you made that year. In the case of insurance, what you owe is said to be the result of not buying insurance.
Functionally equivalent, so that should be conceded. But I don’t think the difference that there is (the difference in how the two calculations are articulated to the taxpayer) is meaningless.
And it turns out (in my opinion) the distinction between a penalty and a reward lies in exactly this–what is said about what causes the outcome to be what it is.