The politics of parsing: 'Penalty,' 'tax' or just 'penaltax'
July 5th, 2012
12:28 PM ET
6 years ago

The politics of parsing: 'Penalty,' 'tax' or just 'penaltax'

(CNN) – In the wake of last week's Supreme Court decision upholding the individual mandate in President Barack Obama's health care law, the debate on the campaign trail turned not to extending health care to nearly 50 million uninsured Americans, but to the language of the ruling.

Mitt Romney's campaign, in a politically vulnerable spot given the similar mandate he enacted as governor of Massachusetts, labeled the fine a "penalty" on Monday.

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The next day, the chairman of the Republican National Committee made an attempt at party unity, saying on CNN: "Our position is the same as Mitt Romney's position. It's a tax."

Romney himself weighed in on Wednesday, saying that while he agreed with the court's dissent that the mandate was unconstitutional, he accepted the majority ruling that the fine assessed to people who choose not to obtain health insurance amounted to a "tax." He reiterated his vow, made at every campaign stop, to repeal the law.

Democrats, intent on not appearing to raise taxes, have stuck with their description of the law as a "penalty," despite the Court's ruling that it's only constitutional as a tax.

Asked Thursday whether Obama "disagrees with the Supreme Court decision that says it's now a tax," campaign press secretary Ben LaBolt said "that's right."

"He's said it was a penalty," LaBolt continued. "You saw our arguments before the court."

And Jay Carney, White House press secretary, said again Thursday "this is clearly a penalty."

Obama's solicitor general, however, did argue in March that the individual mandate could be viewed as constitutional under Congress' taxation power. Donald Verrilli said the fee would be collected by the Internal Revenue Service on April 15, the day Americans pay their federal income taxes.

Asked by associate justice Samuel Alito "can the mandate be viewed as a tax," Verrilli responded "I think it could."

The distinction between "tax" and "penalty" has left some voters frustrated – after all, the mandate remains exactly the same, no matter the label. Conservatives have adopted the phrase "penaltax" and "taxalty," an indication of how meaningless the distinction seems outside presidential politics.

"It is a tax on not buying health insurance! Still sounds like a penalty to me! It's a taxalty!" wrote one conservative blog.

Another right-leaning blog took Chief Justice John Roberts to task for seemingly re-wording the law for political ends: "Roberts effectively re-wrote the law, saying that since Congress failed to call it a tax, he would call it a tax for them. Thus, John Roberts created the penaltax."

Democrats, meanwhile, point to Republicans' parsing of "tax" versus "penalty" as a dodge of the more important point: Does Romney believe Americans should be assessed a fine if they don't obtain insurance?

Romney was asked that question in an interview on CBS Wednesday.

"You know, I made it very clear throughout my campaign and actually while I was governor of Massachusetts that the issue of the uninsured should be dealt with at the state level," Romney said when asked if Americans should be assessed a fee if they don't buy health insurance.

Democrats also point out that Romney, for his pledge of repealing Obamacare, has offered no specifics on how he'd provide health insurance to the 49.9 million uninsured Americans.

The presumptive GOP nominee has promised to replace the law with "real reform," though has offered little by way of firm solutions to a problem that is estimated to cost American taxpayers billions of dollars per year.

On his website, Romney advocates "returning states to their proper place in charge of regulating local insurance markets and caring for the poor, uninsured, and chronically ill," and writes he would "Ensure flexibility to help the uninsured, including public-private partnerships, exchanges, and subsidies."

Beyond that, however, the Republican candidate gives little indication of how, if elected president, he would help states lower their ranks of uninsured citizens.

Romney does indicate he'd keep the Obamacare's more popular provisions, including prohibiting insurance companies from denying coverage based on pre-existing conditions, and allowing young people to remain on their parents' coverage until age 26.

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Filed under: Healthcare • Mitt Romney • President Obama • Supreme Court • Taxes
soundoff (43 Responses)
  1. rs

    I say let the GOP call it a tax.
    Why not?
    The GOP is the only party that seems to be against paying their way. Their states absorb more tax dollars than blue states; they all signed pledges to Mr. Grover Norquist and his merry band of rich guys too rich to pay taxes. All calling their "Individual Mandate" a tax does is blow the dog whistle for the extreme GOP. While they're at it (blaming Mr. Obama for a "tax" increase that just now was called a "tax" but occurred two years ago), perhaps we can get the GOP to look at their own past- like at one Mr. GW Bush and the financial disaster he left us in....nahhh. The GOP can't go there.

    July 5, 2012 01:56 pm at 1:56 pm |
  2. It's a Gun Tax

    It's not a hard concept people. Why don't we call it a gun tax and see what happens? Of course, the people without guns would not have to pay the tax. Why is this such a hard concept? If you have healthcare, you don't pay a single dime of either tax, penalty, fine, fee, fie, fo, fum, and this argument doesn't amount to a hill of beans. Let it go already and move on, please. It's the law.

    July 5, 2012 01:56 pm at 1:56 pm |
  3. RealityBites

    The individual mandate is a red harring,, HELLO! being focused on by the government and its media hounds to divert your attention from the laws actual 20 new or higher taxes on the American people. These taxes are gradually being phased in over the next 5 years. Here are just a few of the major ObamaCare taxes that will come into force six months from now, in January 2013,

    The High Medical Bills Tax:
    This tax provision will hit Americans facing high out-of-pocket medical bills. Currently, Americans are allowed to deduct medical expenses on their 1040 form to the extent the costs exceed 7.5 percent of one’s adjusted gross income. The new provision will raise that threshold to 10 percent, subjecting patients to a higher tax bill. This tax will hit pre-retirement seniors the hardest.

    The Flexible Spending Account Cap.
    24 million Americans who have Flexible Spending Accounts will face a new federally imposed $2,500 annual cap. This tax provision will also drastically limit the options available to special needs families who face HIGH tution costs., Also note that the “medicine cabinet tax” which since 2011 has barred the 13.5 million Americans with Health Savings Accounts from purchasing over-the-counter medicines with pre-tax funds.

    The new Medicare Payroll Tax increase.
    Raising the Medicare tax on wages will raise an estimated $87 billion over 10 years. But combined with a new Medicare tax on investment income, the revenue collected will jump to an estimated $210 billion, making it the biggest single revenue raiser to help pay for health reform.

    The new surtax on capital gains rate:
    This new surtax takes the top capital gains rate to 23.8 percent and top dividend rate to 43.4 percent

    But hey, since no one here cares.., LOOK OVER THERE ==>> is that a tax or a penalty?

    July 5, 2012 01:58 pm at 1:58 pm |
  4. manhandler1

    I don't care what they call it. if it penalizes deadbeats who want everybody else to pay for their helath care, then I'm for it.

    July 5, 2012 02:14 pm at 2:14 pm |
  5. Joe

    I heard on the news yesterday that the IRS is hiring 800 more agents to assist with the new federal mandate on health insurance. So if there is anyone out there that STILL does not believe it is a tax, I think you now have your proof. If it is not a tax, then why is the IRS ramping up. It's a tax. The biggest in history. It really shouldn't be a surpise to anyone. The Democrats have burdened the working middle class with taxes for years.

    July 5, 2012 02:16 pm at 2:16 pm |
  6. Rudy NYC


    The Misleading and Distorted Tax: This penatly is imposed upon people who have been found guilty of spresding lies and disinformation in the media. Opponents claim that telling lies is a form of free speech. Proponents point out that telling lies is against Christian Values.

    July 5, 2012 02:17 pm at 2:17 pm |
  7. bip

    Under ACA or Obamacare, IRS have no authority to jail or seige the property, if individule does not pay penality.
    So it is clear that it is not tax, it is only penality or fee. Congress did not give any authority to IRS to force anyone to pay this penality. IRS is only collecting this fee, if someone pays.

    July 5, 2012 02:32 pm at 2:32 pm |
  8. Fair is Fair

    "Under ACA or Obamacare, IRS have no authority to jail or seige the property, if individule does not pay penality.
    So it is clear that it is not tax, it is only penality or fee. Congress did not give any authority to IRS to force anyone to pay this penality. IRS is only collecting this fee, if someone pays."
    So please tell me... what is the purpose of having a "penalty" if there's no "penalty" for not paying the "penalty"???

    July 5, 2012 02:47 pm at 2:47 pm |
  9. Rupert Murdoch = Josef Goebbels

    I sure wish Congress would just raise taxes on everybody, especially the rich, so we can have medicare for all, and public education to the PhD level.

    Then I wish they would fine FOX "news" out of existence with "dishonesty in broadcasting" penalty after penalty!

    July 5, 2012 03:05 pm at 3:05 pm |
  10. once upon a horse

    my question is since I HAVE healthcare and have always had it and will continue to have it since I have a pre-existing condition do I have to pay the tax, penalty, pentax or whatever they want to call it? Or do I have to go in front of deathpanels to appeal my case?

    July 5, 2012 03:06 pm at 3:06 pm |
  11. Rudy NYC

    Fair is Fair asked:

    So please tell me... what is the purpose of having a "penalty" if there's no "penalty" for not paying the "penalty"???
    Well gosh darn. I guess you just have to read the bill to find out what's in it. 🙂

    July 5, 2012 03:29 pm at 3:29 pm |
  12. Peter J

    Who cares if it's called a penalty or a tax? Can we please focus on whether it's a good idea that people are forced to buy health insurance? I happen to think so as I don't like paying (through my inflated health insurance) for people saying they never get sick and then showing at the ER for free care when they get sick or into an accident after all. I'll listen to good counter arguments, but let's focus on the issues. Regardless people who don't have insurance today will have to pay for their healthcare like the rest of us. Then you can call it what you want.

    July 5, 2012 03:36 pm at 3:36 pm |
  13. Tubby the Tuba Texas

    No matter what you call it (semantics) you better have health insurance by 2014 or you will be paying to the Government for being irresponsible. It's time for the people who live off those that carry health insurance to wake up and smell the coffee! Although for some I can see that it would be cheaper to pay the penaltax than to pay for insurance. The premeium rates for Health Care should come down as people pick up insurance. You want to save money cut the pay for congress, the executive branch and the supreme court. Cut their hefty pensions that are unrealistic, cut their health care which is unrealistic!! Get things back to normal. One should be considered a servant to the people, like in the beginning when these guys of Congress did it for almost nothing....and some did. Kennedy gave his paycheck to charity when he was President. These Congressional people get so rich by knowing inside information and they get out of bad stock, or buy up good and etc. while in their position. They take advantage of the American people. Let's retrn to our roots!

    July 5, 2012 03:39 pm at 3:39 pm |
  14. Rudy NYC

    once upon a horse ASKED:

    my question is since I HAVE healthcare and have always had it and will continue to have it since I have a pre-existing condition do I have to pay the tax, penalty, pentax or whatever they want to call it? Or do I have to go in front of deathpanels to appeal my case?
    None of the above. You need to go back to your fellow conservatives and ask them if you will continue to be convered undered their new deregulation plans. You need to ask why is it the death panel looks like the board room and the devil looks like the CEO.

    July 5, 2012 03:45 pm at 3:45 pm |
  15. worktolive

    Many of you are so WRONG. The people on Medicaid that get free health care will continue getting FREE health care. The only ones that will be paying are the people who already have it-and the cost will increase, expect it, and the working folks that really can't afford it and the small employers (which they will pay the penalty-it's cheaper than insuring their workers). As usual the freeloaders will still be freeloading on the backs of the working people. Get ready for it.

    July 5, 2012 03:55 pm at 3:55 pm |
  16. Ray E. (Georgia)

    Pretty soon you will feel just like that Frog sitting in the pan as the water heats up. Before you know it you are cooked. Whatever it is it is more money to the Goverment if they can collect it. I'm glad there are so many "Experts" here to explain it to me. So many "Inmates" running the Asylum. More things to ponder. At the end of the year the Bush Tax Cuts run out, unless Obama Extends them. The Reduction in the Social Security Tax ends unless Obama Extends them. Then we have Obama Care Kicking in. You think things are messed up now. It is going to get a whole lot more complicated. Have fun!!!

    July 5, 2012 04:07 pm at 4:07 pm |
  17. SFRich

    This is just semantics.

    If someone owes income tax and fails to pay it on time, the IRS assesses a penalty. It's paid to the IRS, so is it a penalty or a tax? I think most would call it a penalty, brought on by a failure to conform to a certain rule of law.

    If we are obligated to purchase health insurance and we don't, then the government assesses a penalty. It's collected by the IRS, but it doesn't take a whole lot of logic to see it is a penalty for not conforming to the individual mandate to carry health insurance. Using the IRS to collect the penalty is merely a convenient method, saving the costs and red tape of creating another government funded bureaucracy. That doesn't make it a tax any more than a late or nonpayment penalty fof paying income tax is a tax... IT'S A PENALTY.

    What's also lost in this war of definitions is that the penalty will only apply to those who can afford health insurance, but make a conscious decision to not purchase it. These people are gambling that they will remain healthy. However, their gamble often ends up with medical costs being taken care of at their local ER, inflating costs across the board and driving up rates for everyone else paying their way.

    In any case, these people are a a very small percentage. What the GOP wants us all to think is that everyone's tax is going up. That's their spin... and it's untrue for 99% of the population. What the GOP is really streaming about is that those earning more than $200,000 will be paying more in taxes to help fund the program.

    The rest is just distortion.

    July 5, 2012 04:09 pm at 4:09 pm |
  18. Joan

    Aren't taxes something passed by the government on everyone to help off set the costs of the government and the thousands of services they provide? They are imposed on everyone but people can be exempt if they have really low incomes or other criteria. Now, this penalty is not imposed on everyone. In fact a very tiny percentage of people who can afford health care insurance but won't do it are the only ones being asked to pay anything at all. They are being penalized for not covering themselves and expecting their fellow citizens to pay their way. Now, how to collect this payment or penalty? Well, it seems obvious that the most convenient way to do this is to tie it in with their tax returns and thus it would fall under the tax department. So it is a penalty this is being collected by the most obvious department, the tax department. Seems pretty clear. Both are partly right but the main thing to remember is that it is a law now and has to be enforced.

    July 5, 2012 04:18 pm at 4:18 pm |
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