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When is a Tax Increase Not a Tax Increase?

John on July 18, 2010 at 9:56 am

Apparently the answer is whenever it suits the Obama Administration’s goals for it not to be one. Remember this exchange back in September of 2009:

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Obama: “But, George, you can’t just make up that language and decide that that’s called a tax increase…I absolutely reject that notion.”

That was then, this is now:

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes…

The law describes the levy on the uninsured as a “penalty” rather than a tax. The Justice Department brushes aside the distinction, saying “the statutory label” does not matter. The constitutionality of a tax law depends on “its practical operation,” not the precise form of words used to describe it, the department says, citing a long line of Supreme Court cases.

Moreover, the department says the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to the Congressional Budget Office.

In addition, the department notes, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns “as an addition to income tax liability.”

This quote sums it up nicely:

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

Just one more way that the President and his allies lied about this bill to get it passed.

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Category: Health & Education |

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