Instead of a mandate to buy insurance and a penalty of $X if you do not comply, what if everyone’s taxes are raised by $X and anyone who complies with the mandate receives a refund of $X? Does that make it constitutional?
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March 30, 2012 at 12:23 am
Old Old School
If the only way that politicians can pass legislation is to misrepresent to the American public that the personal mandate is not a tax, then the law must be judged as constitutional or unconstitutional based on how it was drafted and sold to the American public. The real issue isn’t the economic substance of the distinction, the real issue is the false and deceptive way that 1100-page legislation can be drafted by special interests and foisted on the American public. Words matter — at least, they should. The legislation was drafted by smart, well-compensated lawyers and many (most?) of our politicians/elected officials are lawyers. “We said this, but we meant that” is not a valid excuse.
March 30, 2012 at 6:40 am
michaelwebster
Jeff, clever use of framing.
March 30, 2012 at 7:12 am
David
Yes, that should be constitutional. It would be similar to the First Time Homebuyer tax credit a few years ago, but permanent. That said, it would be difficult to implement because insurance costs vary dramatically from person to person and state to state, so this couldn’t be a simple, flat tax and refund scheme. Since the tax increase would have to be equal across all people (or at least income groups), you would be create an incentive for people who don’t already carry insurance to move out of states with high insurance costs. I’m also not sure how convoluted you can expect to make the credit. The FTHB tax credit was extremely complex to administer and thousands of people gamed it.
March 30, 2012 at 10:25 am
Anonymous
Yes it would be constitutional. And a more efficient way to administer it is through the mandate so why not let it through. The economist focuses on the substantive consequences and I think the law is and should head in that
March 30, 2012 at 10:28 am
Anonymous
…in that direction.
After all, the other side can argue that the people are being misled and convince the electorate to vote the Congress out
March 30, 2012 at 2:17 pm
David
Another thing which distinguishes the mandate from a general tax increase and credit scheme is the fact that you can be sent to prison for refusing to pay the fee imposed by the mandate (non-participation), however you cannot be sent to prison for non-participation in a tax credit.
That’s an important distinction.
March 30, 2012 at 8:03 pm
proyectocasandra
Incidentally, the system in Spain is somewhat similar to what Jeff propose: you pay taxes and the Government provides you with health insurance. I you do not want public health insurance and you buy private health insurance, the government give you your money back.
Is fully constitutional and have all the desirable effects (everyone is insured).
March 31, 2012 at 10:52 am
Utku unver
Hi Jeff,
My understanding is that tax credit would be constitutional but not the mandate. And Obama is runnIng away the word tax as much as he can, as if running on the same platform as Romney (hey mighty median voter theorem, when will you fail to apply? Incidentally my student Samson Alva has a nice paper regarding it).
Utku Unver
April 1, 2012 at 9:30 pm
Alex Wolitzky
Hi Jeff,
I thought about this tonight while hearing Laurence Tribe talk about the health care arguments at a Harvard event. I think what you suggest would be constitutional, but as others on this thread have pointed out the difference in framing matters for the level of political support for the law, and apparently this is something the judges are thinking about. According to Tribe, Justice Kennedy is interested in whether the fact that there’s an alternative way to write the law that’s obviously constiutional should make the court more or less willing to overturn the law if it’s written in a way that’s dubiously constiutional.
I think the following “model” of this is kind of interesting: Suppose that if political support for a law is robust then you can write it any number of ways, but if it’s not robust then you can only write it one way. Suppose also that the court is willing to overturn a big law on a technicality only if the political support for it is not robust. Then if a law is written in a way that falls into a constitutional gray area, the presence of an alternative way of writing it that doesn’t is clear evidence that political support is not robust. So it can make the court more willing to overturn the law on a technicality. (of course, in the case of health care reform we already knew that political support is very fragile…)
Alex
April 2, 2012 at 11:55 pm
jeff
Alex, that’s a good model and it may describe the situation pretty well.
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