Mandatory insurance: Yes, it’s a tax

Posted on: December 22, 2009
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IT WAS A PERFECTLY straightforward question. The answer was anything but.

President Obama vows not to raise taxes on any American family earning less than $250,000 a year. Yet he backs legislation that would force every American to carry health insurance or pay a hefty penalty to the IRS. Such an “individual mandate’’ is included in all the major health care bills making their way through Congress, including the legislation unveiled by Senate Finance Committee Chairman Max Baucus last week. So when ABC’s George Stephanopoulos interviewed the president on Sunday, he raised the obvious challenge:

“Under this mandate, the government is forcing people to spend money [to buy insurance], fining you if you don’t. How is that not a tax?’’

Obama replied that the individual mandate “is absolutely not a tax increase,’’ since, in his view, there is good reason to impose it. He stuck to that position even when confronted with Merriam-Webster’s definition of “tax’’ – “a charge, usually of money, imposed by authority on persons or property for public purposes.’’

“George,’’ chided Obama, “the fact that you looked up Merriam’s Dictionary . . . indicates to me that you’re stretching a little bit right now.’’

But the only one “stretching’’ was the president, whose position was at odds with the legislation itself. “The consequence for not maintaining insurance would be an excise tax,’’ notes the committee staff report on the Baucus bill. “The excise tax would be assessed through the tax code and applied as an additional amount of Federal tax owed.’’

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