Legal Commentary

Randy Barnett is not just a great scholar; he's also a great lawyer.  Maybe someone else beat him to it, but I credit him with the now-popular claim that health care reform's "mandate" to buy insurance is "unprecedented" in american history, that never before has the government forced anyone to enter into a contract with another party for insurance.  Fantastic rhetorical move.  Not really accurate, though.  People who refuse to buy insurance have been paying a penalty for almost seventy years now. 

Pull back the curtain on the health care legislation -- and make no mistake, it's a pretty darned heavy curtain -- and what you'll find is that it imposes an income-tax surcharge on people who opt not to buy qualifying health insurance coverage.  That's in section 1501 of the legislation, now codified as new section 5000A of the Internal Revenue Code. 

The section is new, but the incentives have all been here for a good long while.  Check out section 106 of the same code -- it's been around since the 1940's.  It says that if your employer pays your health insurance premiums for you, that payment won't count as income.  But if your employer hands you the same payments in cash, it does.  So, if you buy insurance through your employer, lower taxes.  If you refuse to buy insurance through your employer, and demand cash salary instead, higher taxes.  

So, is every tax provision that encourages people to buy things unconstitutional?  Oh, and, before y'all start arguing about the differences between taxes and fines, please let me direct you to my analysis on that question, together with longer versions of the other arguments I made in my earlier posts, here.