As set forth in my prior post, IRS The New Health Care Enforcer, the new tax provisions in the Senate and House draft health care bills tax people for failing to obtain acceptable health coverage. These taxes are crucial to implementing a health care mandate (which Barack Obama said during the primary he was against) whereby the power to tax compels people to obtain coverage.
This tax, though, is unlike any other tax. Normally, the federal government taxes income, the purchase and sale of goods and services, and other economic behavior. To the extent the tax laws address non-economic behavior, i.e., one’s mere existence, those laws grant credits or deductions (for example, for a dependent).
I am aware of no other tax resulting from one’s failure to engage in economic activity. Under these draft bills, if you exist, the government taxes you unless you engage in economic activity (and the government may tax that activity as well, as in the case of expensive employer-provided health care plans).
Even the per capita taxes which exist in some states or municipalities do not tax the failure to engage in economic behavior; each person pays the same tax regardless of what they do or do not do.
What a bizarre concept is a tax to enforce a health care mandate. If you buy a computer at a store, you expect to pay a sales tax; but do you expect to pay the tax for not buying a computer? If you earn income at a job, you expect to pay taxes on the income; but do you expect to pay taxes for not working?
Rather, this is a political issue. Does the American public truly understand the impact of allowing the federal government to tax individuals based on what such individuals do not do, the equivalent of a tax on one’s mere existence?
Taxing inaction destroys our right to be left alone, which is one of the foundations of liberty in this country. The implications of such a tax as a tool of political coercion truly are revolutionary.
UPDATE 8/22/09: An interesting op-ed in The Washington Post arguing that a mandate is unconstitutional.
But can Congress require every American to buy health insurance?
In short, no. The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.
But see this response from Jonathan Adler at Volokh Conspiracy:
As much as I oppose the various health care reforms promoted by the Obama administration and current Congressional leadership (and as much as I would like to see a more restrictive commerce clause jurisprudence), I do not find this argument particularly convincing.
Health Care Tax Insanity Chronicles, Part 3 (IRS To Decide Amount of Taxation)
IRS The New Health Care Enforcer