Replies

On the mandate I'm having a hard time drawing the line between the mandate and other tax incentives. It feels like it's crossed a line. But exactly what line?

What's the difference between this and say a tax credit for energy efficient home improvement?

Isn't a tax for failing to engage in commerce, exactly the same as a tax credit for engaging in commerce? The only difference being terminology and the alleged nominal tax rate?

Example: Lets say I make $10,000 and my tax rate is 20% so I pay $2,000. But there is a tax credit if I buy energy efficient windows of $400. So if I buy the windows I pay $1600 in taxes, and if I don't I pay $2000 in taxes.

Now reverse that and say there is a penalty for failing to buy energy efficient windows of $400. Let's also lower the nominal tax rate to 16% to more easily see they are the same. If I don't buy the windows I pay $1600+$400 penalty = $2000. And if I do buy the windows I only pay $1600.

So effectively a penalty for not engaging in commerce is exactly the same as a tax credit for engaging in commerce.

There are minor differences.

If you aren't going to adjust the nominal tax rate, you'd much rather have a tax credit than a tax penalty. Because the penalty represents a tax increase to the nominal rate, whereas a tax credit is a decrease to the nominal rate.
This is affecting everybody except those who have little or no income, whereas most tax credits are more limited in scope. But think of child tax credits, they are pretty wide spread. Nobody gets upset about those.
Congress sold this as a penalty not as a tax increase.

I think the real issues are:

There are things in Obamacare that are constitutional, but that we don't like, so we were hoping the mandate would save us.
Congress had to literally threaten and bribe their own members to do this to us. So it's not your typical legislation drawn up by a representative congress.
Congress wasn't even allowed to read it before passing it, a breach of trust that automatically should and does cast suspicion both on the legislation and those that voted for it.

Roberts kicked this back to the voters and said "It is not our job to protect the people from the consequences of their political choices.”

It is in fact, their role to protect us from the consequences of our political choices if those choices choose to exceed the constitutional limits. It's why there were checks and balances. It's why a court exists.
Roberts could have protected us from this legislation by simply relying on the clear assertion that this was not a tax.
On the other hand, had he treated it consistently as a tax, we would have had to wait until 2014, for the court to rule.

Which brings up another point. Laws like the one that says the court can't consider the constitutionality of a tax until its paid, ought themselves to be unconsitutional.

Clearly people suffer harm from such impending taxes. They ought to have standing.

Aside from the lack of choice and government coersion involved, your math only works if you lower the nominal rate as you did in your 2nd example. The govenment is not going to lower the nominal rate when they assess the tax. In your second example, if you don’t buy the windows, you will still pay 20% or $2000 on your income + $400 penalty on top of it. If you do buy the windows, you pay $2000.

The really dangerous part of this is the precedent it sets. We can now be taxed for doing nothing. The communists will find all sorts of nefarious applications for that.

I'm not sure I buy that argument. Let me state it another way.

People are given an income tax exemption of $3,800 for each qualifying child.

If I have no children, is that the same thing as being taxed $3,800 for having no children?

-PJ

I'm not sure I buy that argument. Let me state it another way.

People are given an income tax exemption $3,800 for each qualifying child.

If I have no children, is that the same thing as being taxed $3,800 for having no children?

Am I being coerced by the government into having children?

-PJ