Question for Freepers (HCRA Legal Challenges)

Vaniy | 24 MAR 10 | 724th

[DrC]

“The feds can’t call it a “tax” because the amount collected in any State would be determined by the number of residents in that jurisdiction who didn’t buy health insurance, not by that State’s total population.”

I’m no lawyer, but what about federal excise taxes on cigarettes and alcohol? Those surely are taxes, but their apportionment across states depends on the extent of smoking and drinking and hence would not end up being apportioned by population.

[Hawthorn]

>> what about federal excise taxes on cigarettes and alcohol? Those surely are taxes, but their apportionment across states depends on the extent of smoking and drinking and hence would not end up being apportioned by population <<

Those are excise taxes — that is, taxes on things rather than taxes on persons.

(A poll or capitation tax is a tax on persons.)

[DrC]

“Those are excise taxes — that is, taxes on things rather than taxes on persons.”

Got it. But one’s exposure to such taxes depends on personal behavior: if I don’t drink, I won’t be paying liquor taxes etc. So it seems that this would establish the precedent of taxes that vary with behavior.

The individual mandate admittedly is a “tax” on “non-behavior” i.e., failure to do something, as opposed to purchasing a good or service. But is that any different than many income tax exemptions? The tax exclusion for health benefits, for example, could be viewed as a tax on people who don’t buy health insurance since their taxes are higher than they otherwise would be had they elected to do so. Same with the mortgage interest deduction.

Both are implemented through the income tax, but have effects on defined classes of individuals who do NOT do something society views as beneficial—i.e., get employer-provided HI or borrow to buy a house etc. An individual mandate seems very similar.

A related point is that many taxes have exemptions of one sort or another. Thus, we tax-privilege those who get employer-provided insurance, but don’t provide the equivalent tax deduction for those who may have purchased the identical coverage in the non-group market. So why can’t an individual mandate be framed as a universal head tax for which we are awarding an exemption to selected individuals, i.e., those who purchase qualified HI plans?

[Hawthorn]

>> one’s exposure to such taxes depends on personal behavior: if I don’t drink, I won’t be paying liquor taxes etc. So it seems that this would establish the precedent of taxes that vary with behavior <<

Yes, but two points distinguish these taxes from “poll” or “capitation” taxes:

1. The tax is on the liquor. It’s not directly on a person, nor on his behavior.

2. The amount of liquor tax paid will vary from person to person, while a capitation tax is the same for everybody who pays it.

>> The individual mandate admittedly is a “tax” on “non-behavior” i.e., failure to do something, as opposed to purchasing a good or service. But is that any different than many income tax exemptions? <<

Still very different, because in the case of exemptions, different people qualify for different levels, depending on total income, other exemptions, amount of mortagage interest paid, etc.

>> Both are implemented through the income tax, but have effects on defined classes of individuals who do NOT do something society views as beneficial—i.e., get employer-provided HI or borrow to buy a house etc. An individual mandate seems very similar. <<

It might be possible to structure the individual mandate “tax” or “exemption” in such a way that it wasn’t a captitaion tax. For example, you could be charged a higher penalty (or given a smaller exemption) depending on your income, age, eating habits, substance abuse, etc. But I have come across no suggestion that the Dhimmis would ever want to do such. My impression is that they’re pretty much locked in to the idea of charging the same “penalty” to all non-purchasers.

(And let’s not give them any ideas!.)

>> A related point is that many taxes have exemptions of one sort or another. Thus, we tax-privilege those who get employer-provided insurance, but don’t provide the equivalent tax deduction for those who may have purchased the identical coverage in the non-group market. So why can’t an individual mandate be framed as a universal head tax for which we are awarding an exemption to selected individuals, i.e., those who purchase qualified HI plans? <<

The latter would be blatantly unconstitutional IMO because the amounts paid wouldn’t be apportioned among the 50 in terms of population.

[DrC]

“It’s not directly on a person, nor on his behavior.

I understand the tax is on liquor rather than behavior per se, but behavior will influence one’s tax liability: those who drink more (or entertain more) will pay more etc.

Same with tobacco taxes. One of their chief rationales is to influence behavior, i.e., the evidence is that teens disproportionately respond to higher taxes by cutting back on smoking. This is viewed as a public health good. If such taxes had NO effect on behavior, there might be less political will to impose them at such high levels.

“My impression is that they’re pretty much locked in to the idea of charging the same “penalty” to all non-purchasers.

But actually, the current structure is either a flat dollar penalty or percent of income, whichever is higher. Given that those below 150% of poverty get free Medicaid and that there are heavy subsidies to buy private HI above that level, for most families this “tax” would affect, the % of income amount would be the higher figure, hence the amount they’d pay. So to a large extent, the penalty does vary by income rather than being a fixed amount per person. In that regard, it’s pretty far from being a pure head tax.