Wednesday, April 4, 2012 | 2:01 a.m.
Before the Affordable Health Care Act, the Obama administration rightfully argued that the health care system in America forces everyone to subsidize the 50 million uninsured. As a result of this act, the solution to rein in the cost of health care and extend coverage became more an argument of semantics rather than substance. There is no mandate that everyone buy health care, individuals can opt-out for a fee. However, there is now an incentive for everyone to purchase health care. Unfortunately, the incentive has been characterized as a penalty. So the issue is the use of the term penalty, not that there is a mandate.
Had the Affordable Health Care Act eliminated the penalty clause and shifted the burden entirely to the income tax code, then all would have been hunky-dory. The federal government has far more discretion when it comes to outright taxation. The current tax code contains hundreds, if not thousands, of gross inequities. One that may be most familiar to everyone is the mortgage interest deduction for owning one, two or even three homes. Few working poor and at least half of all middle-class Americans never benefit from this deduction. Is this a de facto “penalty” on them because it primarily benefits the rich? Then there is the occasional $8,000 income tax rebate for buying a house or a fuel-efficient car. What the administration should have done was increase every American’s income tax liability (family of four by $3,000). Then the tax code would have allowed the same amount to be refunded as an income tax credit if they had health insurance. This is constitutionally much simpler than assessing a health care “penalty.”