ObamaCare: A Tax or Not A Tax?

The answer to that question would seem to be settled.  Chief Justice Roberts sided with the liberal members of the Court and ruled that, if walks like tax and talks like a tax, it is a tax. I vehemently disagree with what Chief Justice Roberts did. In my opinion, he should have ruled ObamaCare unconstitutional and told Congress if you want this to be law you can only do it if it is a tax. But, Roberts did what he did. ObamaCare is now law and the Court has defined the mandate penalty as a tax.

Obama, in spite of the Court’s ruling, claims it is not a tax but a penalty that is collected by the IRS. Mitt Romney, like me, believes the Court was wrong to make the decision it made; but now we must accept the court’s decision and the penalty is by law a tax. So, if it is a tax, who pays this tax? Well, those that don’t pay federal income tax (nearly 50%) won’t be paying it and the well to do already have insurance and, therefore, they won’t be paying it. That leaves the middle class to pay the largest tax increase ever. I snagged this chart from the Questions and Observations blog, which breaks down who will pay the tax.

Taxmandate

From the chart it is clear that 75% of the tax, at least, falls on the middle-class. This exactly why Congress avoided calling it at tax in the first place. As it was, the Democrats only managed to pass the bill by one vote. Had they called it a tax, the bill would never have passed. Nobody in their right mind would propose and pass a massive tax bill while the country was in the midst of a horrible recession. (If Romney can’t make hay with this,  he doesn’t deserve to win in November.)

But, here is a question. If the ObamaCare penalty is a tax, as the Court has said, what happens if a citizen decides not to pay this tax?

I am a graduate of a small engineering college. We use to joke about what we had learned. There were three things we learned:

  1. Don’t piss  into the wind.
  2. Don’t push on a rope.
  3. Never screw with the IRS.

That last lesson is one that Al Capone, not an engineer, learned the hard way. If you don’t pay your taxes, the IRS will come after you. They can freeze your bank accounts, they can confiscate your property and sell it to recover the taxes due plus penalties, and they can even send you to jail. But, according to Jon N. Hall at American Thinker, the ObamaCare law has a twist:

Under  the original ObamaCare, Congress commanded us to own insurance.   But under the new ObamaCare, Congress taxes us for not owning  what Congress cannot command us to own.  (My CPU is still collating,  Dave.  I need more data.)  In any event, one thing most Americans  know is that you don’t mess with the IRS.  So if the penalty in ObamaCare  is now a tax, what is the penalty for not paying that new tax?   Well, on page 170 of the actual  law, we read:

(A)  WAIVER OF CRIMINAL PENALTIES.-In the case of

any  failure by a taxpayer to timely pay any penalty imposed

by  this section, such taxpayer shall not be subject to

any  criminal prosecution or penalty with respect to such failure.

(B)  LIMITATIONS ON LIENS AND LEVIES.-The Secretary

shall  not-

(i)  file notice of lien with respect to any property

of  a taxpayer by reason of any failure to pay the penalty

imposed  by this section, or

(ii)  levy on any such property with respect to such  failure.

I wonder if Chief Justice Roberts read that part of the law? Mr. Hall continues:

… But with ObamaCare, there’s no enforcement — it’s a toothless tax.  And  the lack of enforceability was known about before the bill was  signed.  In 2010, Fox News reported:

The  use of liens and seizures otherwise authorized for collection of taxes does not  apply to the collection of this penalty,” according to the non-partisan Joint  Committee on Taxation.  “Non-compliance with the personal responsibility  requirement to have health coverage is not subject to criminal or civil  penalties under the code and interest does not accrue for failure to pay such  assessments in a timely manner.

So, is it really a tax? Maybe Obama is right. Maybe engineering schools need to revise their curriculums.

Well, that’s what I’m thinking. What are your thoughts?

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22 thoughts on “ObamaCare: A Tax or Not A Tax?

  1. Maybe not liens, but how about any tax returns? Will it not be assessed as a tax due? I see your point. What is the purpose of 16000 agents?

  2. I’ve read and heard described in many places that the Obamacare mandate penalty is “the largest tax increase ever”… but have yet to have anyone tell me how much that tax increase is and where I can verify the figures.

    Can anyone direct me to that information.

    I’d just like to know if it really is the largest tax increase ever.

    I already know that Taxmageddon 2013 will be the largest known tax increase ever if nothing is done between now and the start of next year. That increase is around $500 billion and 3.8% of GDP.

    I seriously doubt that the Obamacare mandate penalty tax comes close to Taxmaggedon 2013.

    1. I wish I could help you, AZ. I have been able to find anything either. I’ve seen numbers from $500 nillion to $1.2 trillion. Whatevver it is, it is too much. As for taxmaggedon, I find it humorous that Obama wants to continue the current (Bush) tax rate for 98% of the people when he has beenn crying for three years that those tax rates are why the recovery has been so bad.

  3. I agree with you…SCOTUS screwed US…Robert’s is a pawn…we’re fucked until we US ride again…

    PLU from SSF

  4. This is a very interesting revelation to say the least Jim. If there is no penalty the IRS can levy on a person for not paying the penalty is it really a tax? It make you wonder what the hell John Roberts was thinking! This should have been thrown out and now I am more angry at Roberts than ever before!

  5. That’s one of the major problems with this bill. No one really knows or understands what will happen if insurance is not purchased. Along those same lines, no one knows what will happen if the tax or penalty is not paid either. My bet is they are making it up as they go along. That’s usually a dangerous thing for us, the taxpayers.

  6. That is an interesting point Jim. If there is no enforcement, it might be hard to collect the tax in the first place.

    I still go, by the way, with the solicitor general, who argued that it was a tax before the court.


  7. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty,” according to the non-partisan Joint Committee on Taxation.

    Hehehe. That’s rich!

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