Mandate or Tax? Grassley v. Baucus
EmailMy exchange with President Obama on Sunday sparked another one today in the Senate Finance Committee:
Grassley: It gets back to something that President Obama was speaking about on the Sunday talk shows, trying to say that it’s not true that the penalty for not getting insurance is a tax, referring to the individual mandate.
The mark before us makes it pretty clear that the penalty is a tax, it looks like the tax is now up to about $2,000 dollars a year, so Mr. Barthold, isn’t the penalty here an excise tax and won't it affect people making under $250,000 dollars a year?
Barthold: Senator Grassley, the penalty proposed in the Chairman’s mark, is as you observed, it's structured as a penalty excise tax, we have other penalty excise taxes in the internal revenue code. We have not separately analyzed – we’ve worked in conjunction with Mr. Elmendorf and his colleagues at the Congressional Budget Office, in terms of the overall effects of what sort of people might purchase insurance through the exchange, who would not have insurance provided by their employer, and where the individual mandate or the employer free rider penalty would arise.
We have not done a combined distribution analyses across income to specifically answer your question but to the extent that yes we think that some people would be subject to the penalty excise tax when everything shakes out we would expect that some would have incomes less than $200,000 dollars.
Baucus: Let me just say on that point, that’s an interesting question. This is really a penalty that’s being collected by the Internal Revenue Service, it could be collected by another body, another entity, another agency perhaps HHS. HHS could set up a whole other apparatus, maybe the HELP bill has something similar I don’t know, and that leads to all kinds of complications, they don’t have the data, they're not as efficient.
But somebody’s going to have to collect the penalty to the degree that the penalty is paid. In the modification, too, we’ve reduced the penalty significantly, we’ve cut it in half, so it’s much smaller than it otherwise was.
But somebody’s going to have to collect it to the degree that there is one, and that it is committed to determination, or at least it’s my determination so far, that the better, more efficient is through the IRS which is set up to collect these kinds of penalties, so it’s really a penalty that we’re talking about here just the IRS it's not HHS is collecting the penalty.
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Mandate? Tax? Who cares?!? It is still immoral and probably Unconstitutional (at least as the writer’s believed, wrote, and intended.) The Federal government FORCING a legal citizen to give money to a PRIVATE, FOR PROFIT corporation? How can the government force me to give money to a profit making private insurance company?
No Baucus. Living is NOT like driving. Driving is a PRIVLEDGE. LIVING is a RIGHT. You can’t force someone to give money to a non-governmental, privately owned, for-profit corporation simply because they live in the USA? That is crazy, immoral, and likely unConstitutional but we know where you are likely to be getting some nice big contributions from the insurance companies!
Posted by: Ed | September 22, 2009, 7:45 pm 7:45 pm
Well said ED, they can call it what they will but it still is costing us money.
Posted by: Bondsman | September 22, 2009, 8:23 pm 8:23 pm
EVERYTHING ALWAYS BOILS DOWN TO AN INCREASE IN TAXES AND IT WILL PROBABLY BOIL DOWN TO THOSE MAKING ‘WELL’ UNDER 200,000 $$ BECAUSE IT IS GOING TO COST MORE THAN THEY ARE SAYING IT WILL. AND THAT IS HOW THEY WILL PAY FOR IT. IT’S THE DEMOCRATIC WAY.
Posted by: ironbuttannie | September 22, 2009, 8:34 pm 8:34 pm
Every interview and speech is filled with blatant misrepresentation from President Fabulous. I am a health insurance agent for years and I can tell you President Obama told countless lies iObama cannot even state his sources of his emotional arguments.
One emotional story after another…….about a woman with breast cancer who was dropped by insurance companies because she did not admit acne on he application lacks specifics also. Who is she? And also who ever heard of an insurance company dropping you because you have acne. Unless she was lying on her application about her meds. That would be fraud if she did not disclose this fact. If she is paying $150 per month for health insurance and her meds cost $150 then the insurance company would go broke. Oh maybe that is the intention of the Federal government.
Since when does the govermment give better service than the private sector? Have you been to the Post Office in Los Angeles lately? Oh my god. Or the IRS or Immigration office in Los Angeles where they treat you like ……. and you cannot have them fired. That is all we need more incompetents!
Oh and by the way! It should be unconstitutional to force companies to remove Cadillac plans. People who get those plans usually have sick families. Cadillac plans are the plans congress have. So again a major contradication! So he is going to penalize insurance companies for offering them. As if the customer is not already paying too much for that kind of plan.
Then in another breath he states insurance companies will be forced to offer diagnostic procedures! Nothing he says makes sense.
He does not understand the business. He should stay out of business. he does not seem to have the head for it.
One by one Obama is going after one business after another!
Where are you guys going to get your revenue?
n his health care address.
Posted by: Colette | September 22, 2009, 9:24 pm 9:24 pm
I can’t see the Government forcing it on anyone. You can bum rides, ride a bus or bike and not have car insurance. I do think that if you earn a certain amount and you don’t have insurnce for yourself or your family then the doctor-hospitals should be able to collect from you regardless of the cost. A 20,000 dollard hospital bill then would become like a 7 year car payment. That might even be cheaper than a insurance payment.
Posted by: david | September 22, 2009, 9:35 pm 9:35 pm
Georgie I am beginning to think the whole US hates you and Obama and ABC… we are fed up with your antics
Posted by: Bawlknee Phwank | September 22, 2009, 9:57 pm 9:57 pm
Health care is 16% of GDP, and has risen by more than 130% in the last decade. The private insurance companies operating in a free market economy with competition have sure worked wonders for keeping costs down. That’s what free competition does right?
Do you think that increasing cost is coming out of some made-up and bottomless fund that we never have to worry about, or do you think the added financial burden in the end is paid by average Americans (or added to the deficit, which is our deficit by the way)?
People abhor tax increases, but do not seem to mind that their health care costs have more than doubled the last 10 years. Odd if you ask me.
Posted by: Jakob | September 22, 2009, 10:31 pm 10:31 pm
This is an Excise Tax; Here is the exact text from the Baucus Bill page 29
Excise Tax.
The consequence for not maintaining insurance would be an excise tax. If a taxpayer‘s MAGI is between 100-300 percent of FPL, the excise tax for failing to obtain coverage for an individual in a taxpayer unit (either as a taxpayer or an individual claimed as a dependent) is $750 per year. However, the maximum penalty for the taxpayer unit is $1,500. If a taxpayer‘s MAGI is above 300 percent of FPL the penalty for failing to obtain coverage for an individual in a taxpayer unit (either as a taxpayer or as an individual claimed as a dependent) is $950 year. However, the maximum penalty amount a family above 300 percent of FPL would pay is $3,800.
By the way the bill also states that employeees who have employer based healthcare will pay taxes on the employees portion of the benefits and will not be deducted from Gross Income–Tax. (page 31) If an employee is offered health insurance coverage by his or her employer and chooses to enroll in the coverage, the exclusion from gross income would apply to the employer provided portion of the coverage.
For those of you who have Flex Spending Accounts the max deduction pre-tax will be $2000.00 so if you typically claim more than that–no more–tax increase!
America is watching!
Posted by: bob wagoner | September 22, 2009, 11:07 pm 11:07 pm
i felt like i was watching the little mermaid when obama was clintonizing the tax/mandate issue…when the bird is telling the mermaid that a fork is a dinglehoffer. obama can call it anything he wants, but if it means we pay more of our earnings to the government, it’s a tax. and his analogy of liability insurance on a car was so lame…not everyone has to pay it because not everyone drives. but if you breath, you have to pay the “mandate.” i think he’s virtually clueless.
Posted by: davidfrat21 | September 23, 2009, 6:35 am 6:35 am
Mandate or tax, its the same. we pay out more money that government says we have to pay out. they know whats good for us so goes the line.
its ironic that obama has stated time and time again, that Americans pay nearly double for the same outcomes as other industrialized nations. If that is true, then why are we paying even MORE!!!
Stop the madness, no public option.
Posted by: scott jeffries | September 23, 2009, 9:10 am 9:10 am
Jakob – “People abhor tax increases, but do not seem to mind that their health care costs have more than doubled the last 10 years. Odd if you ask me. ” –
On the contrary, people mind that healthcare costs have went up, but they recognize that the answer is not forced government healthcare and taxes.
The answer is REFORM of the present system not a wholesale change of the system. 85% of the country has good coverage. Lets start by removing the interstate restriction on insurance so it can be sold across state lines.. this will drive down premiums. Then enact restrictions on tort cases and hold attorneys’ accountable to the courts. If they bring a get rich quick lawsuit against the medical industry, give the medical industry the right to counter sue for expenses..if the lawsuit turns out to be friviolous. This will reduce malpractice insurance rates which also drives up costs. Finally, provide a system of coverage only for those who are not able to get coverage on their own based on income (similiar to the food stamp program or an expansion of medicaid). THEN – leave everyone else ALONE>>>
Posted by: arkie vet | September 23, 2009, 9:29 am 9:29 am
This presents an interesting conondrum for the President. If it is not a tax, Congress can get involved by regulating interstate commerce. But, does the Constitution allow Congress to mandate that someone buy a product it is regulating as opposed to just regulate the existing product? If Congress’ power is to only “regulate” and not force purchasing coverage using the Interstate Commerce Clause, the only way it could “mandate” people to get coveregae is exercising its “tax and spend” powers. But, Democrats don’t want to call this a “tax” for political reasons.
Also, why does the media not dig into the difference between auto and health insurance? Point out that in order to drive a car, it must be registered, and in order to be registered, it has to be insured. Also, auto insurance is for more catastrophic coverage, not routine oil changes. Health insurance is more of a benefit, covering physicals and annual tests.
Posted by: Jon | September 23, 2009, 9:29 am 9:29 am
George
just another example on why the “people” hold the politicians and media in such low regard… The Bill calls it a TAX , pure and simple. The President either lied or never read the bill and nobody wants to hold him accountacle for his own words…And worse yet, every one in the media seems to be puting on the usual elitist spin… It is very straight forward and the ” people” get it,,, a tax is tax,,,when will the media and talking heads also ” get it”
Posted by: joe cassidy | September 23, 2009, 10:08 am 10:08 am
Is it time to build more prisons? so we can house all the homeless and stay at home parents who can’t afford this?
Posted by: John | September 23, 2009, 10:34 am 10:34 am
Someone wake me up when Obama is impeached. Until then, I just hope the country and I do not go broke.
Posted by: sammy | September 23, 2009, 10:58 am 10:58 am
“A rose by any other name…”
Posted by: Ron | September 23, 2009, 11:32 am 11:32 am
No, it is not a tax. Rather it is an egregious usurping of citizen rights for freedom of choice.
That kinda makes it more dictatorial, now doesn’t it? Makes you wonder just where the direction of the government is going, and just how much of “America” will survive.
Can anyone say “Chavez”?
Posted by: Rick McDaniel | September 23, 2009, 11:43 am 11:43 am
READ P. 29, SENTENCES 1-2 OF THE BAUCUS BILL!!! IT CLEARLY STATES THERE WILL BE AN EXCISE TAX!!!
Posted by: Bobby | September 23, 2009, 1:54 pm 1:54 pm
We are constantly told how smart Pres. Obama is. But he said this was not a tax. He told everyone in his campaign, he will take from the rich and give to the poor. Did you think that the top 5% could pay for everything. Did you think it will not hit your pocketbook and everything is free. Well 50% think so.
Posted by: Lizzie | September 23, 2009, 2:51 pm 2:51 pm
I think you folks still don’t get it. For the most affluent country in the world to say that we cannot provide health insurance and health care coverage to all Americans is as much a contradiction as anything I have ever heard. I would like to know what all those who oppose health insurance coverage to all will do if theri insurance is dropped or GOD forbid if a calamity falls on them and they cannot afford heath insurance.
The issue is the same as police protection and/or education. Surely we all believe that a police protected society and an educated society is better for us and hence we pay taxes for those things. Also, we pay taxes on goods we get from abroad. Then, why not health insurance. Clearly, a healthy society is better that nonhealthy one. And, like other services that make us better, we should be willing to pay for health care insurance for those who can’t afford.
I do think health care should as much a fundamental RIGHT as the second amendment says we have the rights.
Therefore, let us pass this healthcare reform and start working on getting everyone insured and improve health delivery systems.
Posted by: Jeet | September 23, 2009, 5:16 pm 5:16 pm
“I do think health care should as much a fundamental RIGHT …
Therefore, let us pass this healthcare reform and start working on getting everyone insured and improve health delivery systems.”
Posted by: Jeet | Sep 23, 2009 5:16:10 PM
It is definitely a moral issue – our country – the richest in the world – should have a public health insurance option and offer all uninsured Americans that coverage… Everytime an uninsured American uses the ER as their primary care – it costs us all!!!! That is the hidden tax that we all pay right now (those of us with insurance). The private health care industry should not be making billions of dollars off the backs of FELLOW SICK AMERICANS each year!!! Regulated the corrupt private insurance industry NOW!!!! No more $100K a day salaries for private insurance executives!!! WE NEED A PUBLIC OPTION NOW AND IF SOMEONE CAN’T SEE THAT – THEY ARE BLIND, CORRUPT (BAUCUS) OR JUST STUPID (GRASSLEY)!!!
Posted by: Melanie | September 23, 2009, 5:58 pm 5:58 pm
Is it even possible for the democrats to introduce any kind of bill that doesn’t contain some kind of tax?
Posted by: LongT | September 23, 2009, 6:01 pm 6:01 pm
Someone wake me up when Obama is impeached. Until then, I just hope the country and I do not go broke.
Posted by: sammy | Sep 23, 2009 10:58:49 AM
Sammy – if you go broke it is your fault – stop blaming the current President for having to clean up the messes of Bush and his rich friends… Bush started two wars without figuring out how our country was going to pay for them… he gave tax breaks to the wealthiest Americans – while he deregulated the h#ll out of the financial industry and he let the RICH, WALL ST EXECUTIVES BANK THEIR PROFITS for years but PASS THEIR LOSSES TO AMERICAN TAX PAYERS in 2008!!!
BTW – if you have a 401K it is about even from when it started falling on September 15, 2008…. hopefully, with new financial industry regulations the RICH, WALL ST EXECs will never be able to take this country down again and destroy over $5 trillion in pension and retirement wealth either!!!
Posted by: Melanie | September 23, 2009, 6:15 pm 6:15 pm
Posted by: Colette | Sep 22, 2009 9:24:36 PM
45 million Americans over 65 have a government run medical insurance program and it is called MEDICARE!!! The elderly don’t seem to be complaining much about seeing their own doctors and having the government pay their doctors directly – why would you care if the government pays your doctor directly at a cost savings to you BUT YOU SEEM to you want to continue the status quo – by letting the private insurance companies’ pay your doctor’s directly by taking 30% off the top of your premium payments (and regularly increase those premiums and your deductibles at whim without any real competition) to pay for their executives, staff and marketing while, at the sametime, our government can provide a similar medical insurance program with an administrative cost of 4%.
All private medical insurance companies are MIDDLEMAN – they take in premiums – take 30% or more off the top – then they pay doctors negotiated rates… MEDICARE does the exact thing but with only a 4% cost to cover running the program… WHICH IS A BETTER BARGAIN FOR AMERICANS??? A government run medical insurance program!!!!
Posted by: Melanie | September 23, 2009, 6:36 pm 6:36 pm
He will probable not come on your show anymore but will go on David Letterman whe he belongs Hes a joke. and a bad one at that. Tax those illegal aliens but say its not a tax let them pay for the health care that they are getting for free at our hospital emergence rooms right now, dont believe it just go look.
Posted by: earl | September 23, 2009, 7:16 pm 7:16 pm
As a teacher in the public schools. I see kids from all walks come into my classroom. The bottom line is this…IF they take advantage of what an education offers, they will not have to worry about being poor and unable to buy insurance. HOWEVER…they (and their parents) have been told they are “entitled” to so many ridiculous federal programs that they truly believe they have a property right to “free” money. As far as I am concerned, sure. offer a public option to those who are mentally incapable of providing for themselves. As for those who wasted their time (and mine) in school,and had the ability to succeed but chose not to, I have but one word..TOUGH. You should have taken advantage of the free education, bud.
Posted by: angus | September 23, 2009, 11:15 pm 11:15 pm
George, You and all the MIA news people need to look up “journalists” in the dictionary. Two young kids put you all to shame.
Posted by: m vale | September 25, 2009, 5:33 pm 5:33 pm