Obamacare Supreme Court Case Day One – It’s a Penalty and a Tax!


The Obama administration is trying to have it both ways on the question of whether the fine for failing to purchase health insurance is a penalty or a tax. When the bill was being debated, the Democrats vehemently denied it was a tax, because that was politically unpopular. Now the lawyers for the administration are arguing that it’s both a penalty and a tax. It’s all very confusing. TPM summarized the government’s argument.

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The confusion arises because of the administration’s argument that the power to enforce the individual mandate is rooted in Congress’ taxing power — but that the mechanism itself is designed to be a penalty, not a revenue-generating policy.

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The narrow but important distinction created a communication challenge for the lawyer representing the Obama administration.

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U.S. Solicitor General Donald Verrilli used the phrase “tax penalty” multiple times to describe the individual mandate’s backstop. He portrayed the fee as a penalty by design, but one that functions as a tax because it’s collected through the tax code.

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“General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax,” said Justice Samuel Alito, in one of the few laugh lines throughout the 90 minutes of argument Monday.

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Here’s audio of Verrilli being laughed at.

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And here’s Justice Alito asking Verrilli about how it’s a tax today, but tomorrow it won’t be a tax. Wait, or is it the other way around? They ought to strike the law down on this alone. Where in the constitution does it say lawmakers are aloud to deceive the people they were elected to represent?

You can read the complete transcript of Monday’s arguments here, and the audio can be found here. Let me know if you find anything good. (Or bad.)

The good news is that it’s unlikely the Supreme Court will kick this case down the road into 2014.

Via Fox Nation