So now it’s a tax?

Karen Harned Executive Director, NFIB Small Business Legal Center
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The Administration’s latest attempt to severely scale back freedom in America comes at the expense of small business owners’ concerns over the constitutionality of the new health care law. The government is putting a large amount of time and effort into trying to make an unconstitutional law constitutional by simply choosing to describe the individual mandate in different terms.

After repeatedly promising Americans that the health-care law is not the equivalent of a tax increase, in a motion to dismiss the lawsuit brought by the National Federation of Independent Business and 20 states, the federal government argues that the individual mandate requirement is actually now a tax.

It appears that the government wants to promote the law to the public as one thing and then turn around and sell it to the court as something else. Why are they playing this bait-and-switch game? They are attempting to hide behind a 200-year old law, the Anti-Injunction Act, which prevents courts from determining the constitutionality of taxes.

This legal tactic is transparent at best. The government knows that arguing Congress has authority to force Americans to buy health insurance as a means of “regulating” interstate commerce is insupportable. And when faced with defending it in court, they realized this argument isn’t as fool-proof as the government once claimed.

Distracting the court from the pertinent legal question in this case is not at all convincing. In the text of the health care law, the reasons for passing an individual mandate specifically rely on the effects of uninsured individuals on the national economy and interstate commerce. Nowhere in the law is the mandate referred to as a tax.  It is referred to as an individual requirement under the law and those that fail to meet the requirement of purchasing (or otherwise obtaining) qualified insurance are forced to pay a penalty.

Despite what the government tries to argue, a tax and a penalty are NOT the same thing. Taxes are levied to raise revenues to pay for government expenditures that purportedly benefit the tax payers. Penalties are not paid to benefit the party forced to pay them. Paying a penalty is actually a punishment for breaking the law. There is no benefit for the person paying. In fact, penalties are intended to create a disincentive for the person to engage in a specific behavior. And this is precisely the legislative intent behind the individual mandate.

The text of the health care law repeatedly defines the individual mandate as an individual requirement to obtain and maintain qualified health care insurance. The whole point behind including the individual mandate in the health care law is to force individuals into the health care insurance system. Individuals who don’t get the required insurance, and have to pay the penalty, will be viewed as lawbreakers. There are no benefits attached to paying the penalty. So there isn’t a legitimate argument to be made that this is all of a sudden now a tax, simply because it is often easier for taxes to pass constitutional muster in court.

The Justice Department is now calling it a tax simply to confuse the issue. The inherent question over this law still remains:  Does Congress have authority, under the Commerce Clause, to force individuals to buy a private product simply because they are alive? The answer is no.

The health care law is a direct infringement on the personal freedoms of all Americans. It is unconstitutional no matter how the government tries to spin it.

Karen Harned is the Executive Director of the NFIB Small Business Legal Center, the leading advocacy organization for small business owners in our nation’s courts.