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'Tax': The dirtiest word of them all

Our favorite mother and tax expert thinks it's a tad ironic that the authors of the health care legislation worked so hard to avoid the term 鈥渢ax,鈥 yet taxing is one of the most appropriate things the government can do, and ultimately saved the act.

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Evan Vucci/AP
Claire McAndrew of Washington, left, and Donny Kirsch of Washington, celebrate outside the Supreme Court in Washington, Thursday, June 28, 2012, after the court's ruling on health care. The Supreme Court upheld the act's universal mandate by calling it a tax, and therefore constitutional.

I find it kind of funny that, in the end, what saved President Obama鈥檚 health care reform law was to go ahead and call a tax (the crucial cost-controlling provision previously known as a 鈥渕andate鈥), a 鈥渢ax.鈥 From the Washington Post鈥檚 Robert Barnes (emphasis added):

At the core of the legislation is the mandate that Americans obtain health insurance by 2014.

The high court rejected the argument, advanced by the Obama administration, that the individual mandate is constitutional under the Commerce Clause of the Constitution. Before Thursday, the court for decades had said it gave Congress latitude to enact economic legislation.

But Roberts found another way to rescue it. Joined by the court鈥檚 four liberal justices 鈥 Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan 鈥 he agreed with the government鈥檚 alternative argument, that the penalty for refusing to buy health coverage amounts to a tax and thus is permitted.

Roberts summed up the split-the-difference decision: 鈥淭he federal government does not have the power to order people to buy health insurance,鈥 he wrote. 鈥淭he federal government does have the power to impose a tax on those without health insurance.鈥

Later in the Post story, Justice Kennedy explains that the basic problem was that Congress (and implicitly the Obama Administration as well) wouldn鈥檛 call a tax a 鈥渢ax鈥 (bold added):

Kennedy said Roberts and the justices who joined him rewrote the statute in order to save it.

鈥淭he act requires the purchase of health insurance and punishes violation of that mandate with a penalty,鈥 Kennedy said. 鈥淏ut what Congress called a 鈥榩enalty,鈥 the court calls a tax. What Congress called a 鈥榬equirement,鈥 the court calls an option. .?.?. In short, the court imposes a tax when Congress deliberately rejected a tax.鈥

It鈥檚 seems rather ironic to me that the authors of the health care legislation avoided the term 鈥渢ax鈥 to make the policy seem more acceptable to the American public鈥揳nd in the process called its constitutionality into question.听 Politicians work so hard to avoid that dirty word鈥揳s I鈥檝e noted previously in different contexts.听 Yet, taxing is one of the most appropriate things the federal government can do; it is essential in order to fund the public goods and services (such as 鈥渁ffordable [health] care鈥) that it provides.

Who knows what other things we might be able to accomplish by embracing the federal government鈥檚 taxing authority?!

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