Contemplating Health Care Reform

Tuesday, September 22, 2009

When is a Tax Not a Tax?

When is a tax not a tax?

Apparently, when President Obama says so.

On the Sunday shows this weekend, Mr. Obama continued his sale of health reform. Among his comments on ABC’s “This Week” program was the statement “For us to say you’ve got to take responsibility to get health insurance is absolutely not a tax increase.”

George Stephanopoulos, to his credit, pressed Mr. Obama on this, looking up the definition of tax in the Merriam-Webster dictionary.

[full exchange available here.]

President Obama seems confused by this health care tax increase, because those who would be required to purchase insurance would receive some benefit in return. But The Wall Street Journal observed, “what doesn't count as a nontax under Mr. Obama's definition? All taxes can be justified in the name of providing some type of service, however wasteful.”

[Obama’s Nontax Tax, WSJ, 9/21/09]

As we (and many others) previously remarked, requiring people to spend their money is absolutely a tax. And because many of the affected people currently pay $0, choosing not to carry health insurance, it is an increase. So if the reform proposal backed by Mr. Obama passes, including mandatory coverage, it will be a tax increase.

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