Healthcare Ruling to Fuel Election-Year Tax Debate

Thursday, 28 Jun 2012 08:00 PM

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The Supreme Court's decision to uphold the Patient Protection and Affordable Care Act is, in fiscal terms, a major election-year tax increase that will give Republicans an arsenal to accuse Democrats of raising taxes, a legal expert says.

The Supreme Court voted 5-4 to uphold the law, with Chief Justice John Roberts acting as the swing vote in support of the decision, surprising many due to his conservative stance. Roberts was appointed by President George W. Bush.

"In some sense, Chief Justice Roberts gave a gift to the Republican Party," Charlton Copeland, an associate professor at the University of Miami School of Law, tells Moneynews. "It prevents the Obama administration for suggesting that this is anything but a tax."

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

The ruling finds the law does not involve giving the government power to force Americans to buy insurance but does give the government the right to tax those who don't.

"The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax," Chief Justice John Roberts wrote in the ruling, as reported by ABC News.

"Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

Expect the Democrats to face criticism for the tax revenues that will come in from the law, including those from individuals who fail to buy insurance or those from companies with 50 or more employees who fail to provide insurance for those workers.

Democrats will likely argue they're expanding coverage while narrowing deficits.

"Expect to see a renewed and vigorous articulation of the deficit-fighting benefits of the Affordable Care Act," Copeland says.

Republicans were quick to criticize the ruling.

"I think it's pretty telling that for the Obama administration a victory is a middle-class tax increase. That's what this is, and it's not me saying it, that's what the Supreme Court has said today," Senator Marco Rubio, a Florida Republican, tells CNBC.

"It's important to realize what the Supreme Court decides is not whether something's a good idea or not. What they decide is whether it's constitutional, and the reason why they say this is constitutional is because this is a tax increase," Rubio adds.

GOP Presidential hopeful Mitt Romney vowed to repeal the law if elected.

"If we're going to get rid of 'Obamacare' we're going to have to replace President Obama. My mission is to make sure we do exactly that," Romney said on the roof of a building overlooking the U.S. Capitol, according to Reuters.

Romney's colleagues in the House of Representatives voiced similar sentiments.

"Today's ruling underscores the urgency of repealing this harmful law in its entirety," said House of Representatives Speaker John Boehner, the top Republican in Congress, Reuters adds

Change in the White House is the only way the law goes, and even that won't be easy, says Copeland.

Repealing a law involves similar steps to enacting one, and Romney will need support in Congress to do so.

"The biggest change for healthcare is if Mitt Romney wins or Barak Obama wins," Copeland says.

Polls show that most Americans did not like the law though they did approve of some of its provisions.

Fifty-six percent of people were against the healthcare overhaul and 44 percent favored it, according to a Reuters/Ipsos online poll.

Sixty-one percent of Americans oppose the individual mandate, while 39 percent favor it.

The poll also finds that 82 percent of respondents favor banning insurance companies from denying coverage to people with pre-existing conditions.

Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.

© 2014 Moneynews. All rights reserved.

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