Sunday, September 27, 2009

Who Says the Individual Health Care Mandate is a Tax?

Are mandated health benefits also a tax? President Obama says no.
[F]or 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. People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs. ...

[Y]ou can't just make up that language and decide that that's called a tax increase. ...

My critics say everything is a tax increase.
However, Larry Summers, Director of the National Economic Council, says that a mandate is a tax.
Judgments about specific policy proposals must depend on the particulars, but I find that there are important differences in the efficiency and distributional consequences of standard public provision and mandated benefit programs. Essentially, mandated benefits are like public progams financed by benefit taxes. This make them more efficient but less equitable than standard public programs.
Michael F. Cannon of the Cato Institute also says that an individual health mandate is a tax. He digs a little deeper and finds others who agree with him. Many of his sources currently serve for the Obama adminstration.

Cannon concludes by asking the following questions: "if an individual mandate is not a tax, why exempt anybody? If an employer mandate isn’t a tax, why exempt small businesses?"

No comments:

Post a Comment