Legal Commentary

President Obama Claimed that the Individual Mandate is Not a Tax

By Ilya Somin

As I discussed in this post, some academic defenders of the health care bill?s insurance mandate claim that it is constitutional as an exercise of Congress? power to tax. That argument has been advanced by by prominent scholars such as Jack Balkin, Vik Amar (in a recent debate with me), and others. It may therefore be of some interest that President Obama, himself a former constitutional law professor, forcefully denied that the mandate is a tax in this September 2009 ABC News interview:

[George] STEPHANOPOULOS: ...Under this mandate, the government is forcing people to spend money, fining you if you don?t. How is that not a tax?

OBAMA: Well, hold on a second, George. Here ? here?s what?s happening. You and I are both paying $900, on average ? our families ? in higher premiums because of uncompensated care. Now what I?ve said is that if you can?t afford health insurance, you certainly shouldn?t be punished for that. That?s just piling on. If, on the other hand, we?re giving tax credits, we?ve set up an exchange, you are now part of a big pool, we?ve driven down the costs, we?ve done everything we can and you actually can afford health insurance, but you?ve just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that?s...

STEPHANOPOULOS: That may be, but it?s still a tax increase.

OBAMA: No. That?s not true, George. The ? for us to say that you?ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it?s saying is, is that we?re not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase....
[emphasis added].

Obama?s statement probably won?t make much difference in court. Still, it?s noteworthy that Obama, like me, apparently believes that the mandate is not a tax but a penalty for noncompliance with a regulatory mandate ? similar in that respect to the fines state governments impose on those who refuse to purchase auto insurance. The difference between the two, of course, is that state government powers are not limited to those granted in the federal Constitution. Congress? are.

I recognize the slight distinction between saying that the mandate is not a tax and saying that it?s not a ?tax increase,? as Obama did. However, the mandate does not simultaneously lower the taxes of those covered by it. So if it?s a tax at all, it?s a tax increase. Obama appears to recognize this when he analogizes it to state auto insurance mandates, which also don?t in any way lower the taxes paid by those subject to the regulation.

Full post as published by The Volokh Conspiracy on March 25, 2010 (boomark / email).