What the Supreme Court ruled on health care 'tax'
July 5th, 2012
01:28 PM ET
2 years ago

What the Supreme Court ruled on health care 'tax'

(CNN) - In its ruling last week on the national health care law, the Supreme Court found that penalties the law places on people who don't buy health insurance count as a tax protected by the Constitution.

The Obama administration had argued that the fees should be considered a penalty. But the government also argued that the individual mandate can be viewed as constitutional under Congress' powers of taxation.

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Filed under: Health care • Supreme Court • Taxes
soundoff (19 Responses)
  1. Four and The Door

    Whether or not you agree with the decision or argument given by Justice Roberts, the impact on the General Election is obvious. Consider this. People who want a better health care system absolutely now may vote for Mitt Romney because this is the only way the ACA will get overturned. However, if the mandate was ruled unconstitutional, very few people who are satisfied with the ACA would necessarily change their vote for Obama because it wouldn't matter. The ACA as it stood would not work without the mandate. And Obama would certainly not repeal it to come up with a better plan. This was as good as he could come up with.

    July 5, 2012 01:43 pm at 1:43 pm |
  2. jean2009

    It's legal case closed.

    We all knew it was legal ...after all John Adams signed a mandated penalty/tax into law with the Marine Health Services Act of 1798 which mandated that members of a ship crews were to have $.20 of their monthly wage withheld to purchase health insurance that would build hospitals for their care along coastal ports. Seaports got tired of a ship pulling into dock and unloading ill, injured or elderly seaman who were a burden on the local citizens.

    July 5, 2012 01:48 pm at 1:48 pm |
  3. Rudy NYC

    People need to keep in mind that Roberts wrote both the majority and dissenting opinions. Astute court observers are calling this ruling a 1-4-4 decision, not a 5-4 decision. Chief Justice Roberts did his own thing, and appears to have redefined any penalty or fine at the federal level as a tax.

    Just because the IRS collects it, does not make it a tax. Even the IRS charges you a "late filing penalty", which is not a tax, when you break the law. How is breaking the individual mandate law any different? The IRS collects the penalty because it would be a redundate waste to create an entirely new agency simply to collect the penalties and fines arising from the ACA.

    July 5, 2012 01:57 pm at 1:57 pm |
  4. TEAPARTY MIKE

    Obama lied when he claimed the penalty was not a tax in order to gain support for the passage of Obamacare. Then he had the government argue before the Supreme court that it was a tax in hopes it would be found constitutional on that basis. Now that it was found to be so on the basis it is a tax, Obama is again telling the American people the lie that it is not a tax. American people beware, Obama will lie to decieve voters in order to stay in power. His words are not to be trusted.

    July 5, 2012 01:58 pm at 1:58 pm |
  5. Rudy NYC

    Four and The Door wrote:

    .... The ACA as it stood would not work without the mandate. And Obama would certainly not repeal it to come up with a better plan. This was as good as he could come up with.
    -----------–
    Okay, I give a passing grade. It was the best compromise that they could come up with. Furthermore, Pres. Obama would not repeal it and start all over from scratch. But, the Republicans would most certainly do it in a heart beat. They have no plan. None. Nuh-Thing.

    Republicans want to return to the status quo. During the 200s, the average insurance premium jumped a little over 150%. That is the insurance market that Republicans prefer. Let the market forces drive you to your grave bankrupt.

    July 5, 2012 02:02 pm at 2:02 pm |
  6. Myviewis

    Good article.
    The Obama administration gave the court 2 choices:
    1: “The Obama administration had argued that the fees should be considered a penalty” (see article)
    2: “argued that the individual mandate can be viewed as constitutional under Congress' powers of taxation”. (see article)

    The court ruled on #2 choice the Obama administration submitted to the Supreme Court.

    It is not a Penalty, it is a Tax per the Supreme Court ruling on the choice the Obama administration submitted to the court.

    July 5, 2012 02:03 pm at 2:03 pm |
  7. demwit

    Withholding money from some ones pay is a penalty jean?
    You mean I've been being penalizsed all this time for just being an American!? HUH??

    July 5, 2012 02:07 pm at 2:07 pm |
  8. indie52

    Tax, penalty is semantics it's called money to those selfish people who can afford healthcare but choose for American tax payers to foot their medical expenses at 10 time the normal rate. The deserve to pay money. Call the money what ever you want tax, penalty who cares it's the same thing.

    July 5, 2012 02:09 pm at 2:09 pm |
  9. T'sah from Virginia

    I like the fact that CNN called it a PENALTAX – Case closed!!! You will ONLY be taxed if you refuse to buy health insurance and can afford it............PERIOD!!! Jeez! Romney FLIP-FLOPS so much, he does not know when to STOP!!!

    And Ann Romney's comment that President Obama is "killing Mitt Romney" is a LIE – the truth is being told on someone who wants to RUN from it! Romney KILLED his opponents in order to win the nomination and now it's the WSJ and other Republicans KILLING Romney because he's a flip-flopper and failing to keep his campaign promise!!!

    Obama 2012 – The Only Trusted Way Forward!!!

    July 5, 2012 02:10 pm at 2:10 pm |
  10. JoeAverage

    The Supreme Court ruled it a tax..., and it really doesn't matter the reason. Man up and accept it..

    July 5, 2012 02:11 pm at 2:11 pm |
  11. cali girl

    Four, those of us with pre-existing conditions would beg to disagree with you. And parents of children with health problems can not lose it (I knew a 6 year old girl with leukemia, the insurance dropped her and you can guess the rest of the story) and the children can be on their parents plans until 26. Also people will not have to worry about a lifetime maximum number. There is nothing bad about any of these issues. And by the way, Robmeys plans are pretty much the same word for word.
    And the people of MA do get a penalty if they opt out and there are many healthcare amounts available.

    July 5, 2012 02:14 pm at 2:14 pm |
  12. Claudia, Houston, Tx

    The IRS will probably put out new tax forms that will help clearup a lot of the argument as to whether you'll suffer a penalty vs tax.

    July 5, 2012 02:16 pm at 2:16 pm |
  13. Myviewis

    Claudia, Houston, Tx

    The IRS will probably put out new tax forms that will help clearup a lot of the argument as to whether you'll suffer a penalty vs tax.
    -----------------------------------–

    Claudia, read the article. It is a Tax and they had already announced that it will be part of your taxes, employers will show your insurance policy on your W-2 Form and the IRS will examine the policies provided by the employer to make sure it meets the requirements. Those that file taxes ( no W-2 Form) have to fill out a form and turn in a certificate from the insurance company proving you bought an insurance policy and it has to meet the requirements.

    Did you guys not follow the IRS on this??

    July 5, 2012 02:36 pm at 2:36 pm |
  14. Mikey

    @TEAPARTY MIKE – If the best you got is the terminology he is using to characterize the fee/penalty/tax, whatever the heck it is, you might as well just give up now and vote to reelect President Obama.

    Oh, BTW, what do you have against preventing freeloaders from gaming the system? I thought you all in the funny hats were all about personal responsibility. I also wonder why, with all your collective complaining about welfare queens, etc. that I never hear the TP complain about tax cheats, who probably steal many times more from us.

    July 5, 2012 02:42 pm at 2:42 pm |
  15. Fair is Fair

    "I like the fact that CNN called it a PENALTAX – Case closed!!! You will ONLY be taxed if you refuse to buy health insurance and can afford it............PERIOD!!! "
    -----–
    Ummmmmm... NO. The government is going to subsidize premiums, right? Where goes the government get the funds to do this? From people's taxes, that's where. So whether you refuse to buy it or not, you're being taxed.

    July 5, 2012 02:43 pm at 2:43 pm |
  16. Hammerer

    Tax or penalty? WHAT DOES IT MATTER?
    In the end the poor working stiff is still going to pay!

    July 5, 2012 02:54 pm at 2:54 pm |
  17. Jules

    demwit – the penalty or tax or whatever you want to call it will not be withheld from your pay. When you file your tax returns you can put your health inssurance policy number on the form, where a new line will be created, and then there is no additional tazx. If you do not have health insurance then you will pay an additional tax. You may call it a tax, if you like, but taxes don't normally disappear when you take some sort of action such as buy health insurance.

    July 5, 2012 02:54 pm at 2:54 pm |
  18. Jules

    To four and the door – the more the American people find out about how ACA benefits them, they will approve of it and the GOP will be sitting back in the 1950's where they want to be. The toothpaste is not going to be easy to get back in that tube.

    July 5, 2012 02:56 pm at 2:56 pm |
  19. Jules

    TeaParty Mike, Could you please tell me what a flip flop is? Is it the truth, a lie, or something in between? I wonder if Romney was lying to be elected Gov. of MA or is he lying now to get the GOP nomination? What do you think?

    July 5, 2012 02:58 pm at 2:58 pm |