“If one assumed that taxes were collected sufficient to cover the cost of government (and clearly they are not), the result of these tax policies is that everybody who does NOT purchase health insurance is paying enough extra taxes to cover the 28% of my premium that I get back in tax deductions, for every person who buys health insurance.”
You are quite correct. In that regard, every person WITH insurance actually costs society MORE than every person WITHOUT insurance. Which is why the claim that the mandate was intended to prevent free-riding was a joke. http://www.aei.org/article/health/healthcare-reform/alitos-correct-the-individual-mandate-was-never-about-saving-money/
That said, the mandate certainly wasn’t structured as a tax. First, as you note, people already were being “taxed” for not having group health coverage. If Congress wished to make the current tax exclusion universal, it could have done so simply by tweaking the existing language of the tax code to extent it to all forms of HI coverage rather than just employer-sponsored policies. But it did not do this.
Second, Section 1501 was explicitly justified within the statute as a regulation of interstate commerce (search for “1501” here: http://www.ncsl.org/documents/health/ppaca-consolidated.pdf)
Third, there is a difference in the expected behavioral response between a tax and a penalty. Congressional Budget Office, Will Health Insurance Mandates Increase Coverage?Synthesizing Perspectives from the Literature in Health Economics, Tax Compliance, and Behavioral Economics http://www.cbo.gov/publication/21600. If something is structured as a penalty, people are more likely to comply, since many people don’t like “breaking the law” regardless of the size of the penalty involved. In contrast, if you structure it as a tax, i.e., you get a tax break if you decide to buy health insurance but lose that benefit—pay more tax—if you don’t, many more will feel comfortable not complying. CBO scored this as a penalty, not a tax etc.
I agree with those who say Roberts essentially rewrote the statute in order to make it pass constitutional muster. I find that deeply concerning.
Roberts will forever be remembered as making it possible for the USA to instates Death Panels to rid the government of undesirables. What a horrible legacy.
On your point about tax vs penalty and compliance, the one good thing about Robert’s ruling is that we all now can treat this as a simple tax choice, and not feel guilty about not having insurance.