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Thursday, September 24, 2009

Health Care Reform: Taxation for Mere Existence

William A. Jacobson over at Legal Insurrection has an excellent point regarding health care reform that many critics, especially those Congress, are ignoring.

In his short post, "Get Rid of the Mandate," Jacobson writes "I have argued before that the focus on the public option, while necessary, missed the key defect in Democratic health care restructuring plans. The problem is the health care mandate, which by the way, Barack Obama opposed during the campaign.

"The mandate that every individual carry health insurance under threat of punitive taxes is a corrosive tool which changes the way we understand taxation. For the first time, we will tax people not on their economic activity, but on their failure to engage in economic activity. While arguments over whether such a tax is constitutional are interesting, the real issue is political.

"Do we want to empower the government to use its taxing powers to force people to take action? If the right to be left alone is a foundation of our liberty, are we willing to jettison that foundation? If taxation is the means to achieving a health care mandate, are we prepared to have the IRS play the role of health care enforcer?

"There is no current equivalent. While many states impose mandatory auto insurance requirements in order to drive, individuals have the alternative of not driving. With the health care mandate there is no alternative. If you exist, you either obtain 'acceptable' health insurance coverage or you are taxed."

[...]

"The debate over the mandate is a debate we need to have. It goes to the very heart of who and what we are as a nation. If we can mandate health insurance under threat of taxation, then there is no limit to what else can be mandated under the threat of taxes.

"It is time to get rid of the disease, not just treat the symptom. It is time to get rid of the mandate from the Democratic health care restructuring plans."

Jacobson is quite correct in his assertion that this mandate of conformity or taxes is unique within the U.S. and I fear that his concern about where this precedent could lead are well-founded.

Aside from the coercive nature of taxing people into "good" or "responsible" behavior (buying health insurance), allowing any form of government this sort of latitude in taxation is foolish. Congress derives its power from spending money, the more money the more power it can wield-- the more it can "get things done," in more politic (or perhaps euphemistic) language . This basic fact should be well understood. If a new source of income is found, i.e. a new method of taxing, it is inconceivable that Congress will not pursue it.

We could be taxed for all sorts of behavior and choices... not merely "nanny" taxes on sugary or high-fat foods and other such nonsense, but taxed for failure to indulge in federally approved behavior (such as buying health insurance).

This is a dangerous premise for Congress to indulge in. I think Jacobson is quite right. The "public option" shouldn't be ignored, but it is imperative that the mandate be pursued and tossed as well.

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