Tax Break

“Tax” is key issue in Obama healthcare Supreme Court case

March 19, 2012

U.S. Supreme Court building in Washington, D.C. REUTERS/Molly Riley

To be or not to be a tax?

That is the question, wrote Donna Smith of Reuters, in a March 14 piece on the upcoming U.S. Supreme Court case that will test the validity of President Barack Obama’s controversial healthcare system overhaul.

The central issue in the arguments is the money that Americans will have to pay starting in 2014 to the Internal Revenue Service if they fail to obtain medical insurance.

Though the money is going to the IRS, the Obama administration has gone to great lengths to term it a penalty, not a tax.

One reason, wrote Smith: “During his 2008 presidential campaign, Obama promised not to raise taxes on families earning less than $250,000. That’s the same income bracket where a lot of people lack health insurance.”

Toeing the line seems to require some adroit footwork. Smith found an example of recent testimony from Health and Human Services Secretary Kathleen Sebelius in which she told Congress the penalty “operates the same way a tax would operate, but it is not per se a tax.”

Administration lawyers have argued in briefs filed ahead of oral arguments, Smith wrote, that the measure is constitutional because “the government can make people buy health insurance and charge them if they don’t through its powers to regulate interstate commerce and to tax.”

The Supreme Court starts hearing the case on March 26.

For more on the case, see the piece by David Morgan on the political environment and the country’s attitudes going into the oral arguments, which will get more time than any case in the past 44 years.

Also a piece by Joan Biskupic on how the case against Obama’s plan came together, and the lawyers and elected officials who marshalled the opposition.

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