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Obamacare Decision Says: 'We Can Tax You on Anything – Whether You Buy It or Not'

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Monday, 02 Jul 2012 05:19 PM Current | Bio | Archive

“The power to tax is the power to destroy” – John Marshall, first chief justice of the Supreme Court

Has the Supreme Court just given the OK for the government to order any sort of commerce as long as it's called a tax? We’ll see in future legislation, but that may be the biggest unintended consequence of last week’s decision to uphold Obamacare.

During deliberations, I mentioned the possibility that under the controversial law, now “validated” by a 5-4 vote, the government could mandate you to buy a good or service, whether you want to or not.

Mandating personal responsibility is the great oxymoron of public policy. It also tends to make the general public worse off, not better off.

This decision requires that provisions of the law be characterized as a tax. But the bill was sold on the premise that it wasn’t a tax. So now there’s a tax against all Americans who cannot or choose not to purchase healthcare.

As with many taxes, it will fall disproportionately on the poor and middle class. In fact, a recent analysis done in The Economist estimates that 75% of Obamacare’s costs will fall on those making less than $120,000 per year.

Some are happy with the decision because of what they perceive as a subtle brilliance: the fact that the case has severely limited the power of Congress to pass legislation via the commerce clause.

But gutting the commerce clause is irrelevant if you can just funnel everything the government does via taxation. Sure, the government can’t force you to eat broccoli (yet), but it can now tax you for it whether you buy it or not.

So not only is this law one of the biggest tax increases of all time, it opens the door for future government abuses.

How far we’ve fallen. The Constitution was written as a contract between the people and their government, carefully constructed to protect the people FROM the government. It has flexibility written in, along with checks and balances. This has ensured its longevity. But, over many generations, the original contract has endured “death by a thousand cuts.” This latest decision is a cut to the heart.

In short, the ruling is terrible. Rather than solving a controversial problem once and for all, it merely creates more uncertainty for everyone regarding their economic future. And since the power to tax is the power to destroy, all that really matters is that there’s more uncertainty and less freedom as a result of this decision.

The effects of this decision may take a generation of struggle to resolve. At the very least, this new tax will stall economic growth. Combined with the fiscal cliff the US faces starting January 1st, the future looks very murky indeed.

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2012-19-02
Monday, 02 Jul 2012 05:19 PM
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