ByÂ ROBERT PEAR, The New York Times
WASHINGTON â€” When Congress required most Americans to obtainÂ health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the governmentâ€™s â€œpower to lay and collect taxes.â€
And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.
Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.
Under the legislation signed byÂ President Obama in March, most Americans will have to maintain â€œminimum essential coverageâ€ starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.
In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is â€œa valid exerciseâ€ of Congressâ€™s power to impose taxes.
Congress can use its taxing power â€œeven for purposes that would exceed its powers under other provisionsâ€ of the Constitution, the department said. For more than a century, it added, theÂ Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.
While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.
â€œFor us to say that youâ€™ve got to take a responsibility to get health insurance is absolutely not a tax increase,â€ the president said last September, in a spirited exchange withÂ George Stephanopoulos on the ABC News program â€œThis Week.â€
When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, â€œI absolutely reject that notion.â€
Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nationâ€™s economy. Nowhere does Congress cite its taxing power as a source of authority.
Under the Constitution, Congress can exercise its taxing power to provide for the â€œgeneral welfare.â€ It is for Congress, not courts, to decide which taxes are â€œconducive to the general welfare,â€ the Supreme Court said 73 years ago in upholding theÂ Social Security Act.
Dan Pfeiffer, the White House communications director, described the tax power as an alternative source of authority.
â€œThe Commerce Clause supplies sufficient authority for the shared-responsibility requirements in the new health reform law,â€ Mr. Pfeiffer said. â€œTo the extent that there is any question of additional authority â€” and we donâ€™t believe there is â€” it would be available through the General Welfare Clause.â€
The law describes the levy on the uninsured as a â€œpenaltyâ€ rather than a tax. The Justice Department brushes aside the distinction, saying â€œthe statutory labelâ€ does not matter. The constitutionality of a tax law depends on â€œits practical operation,â€ not the precise form of words used to describe it, the department says, citing a long line of Supreme Court cases.
Moreover, the department says the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to theÂ Congressional Budget Office.
In addition, the department notes, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns â€œas an addition to income tax liability.â€
To read more, visit: http://www.nytimes.com/2010/07/18/health/policy/18health.html?_r=1&ref=politics
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