The PJ Tatler

Carney: It's Not a Tax, It's a Penalty

In the first regular meeting with reporters since the Supreme Court’s upholding of ObamaCare, White House spokesman Jay Carney was asked about the court’s branding of the mandate as a tax when President Obama had protested that the mandate was not a tax. His whole response:

“Well, I think you need to read the opinion. I know it’s long, but the opinion in question here said that the Affordable Care Act was entirely constitutional under Congress’s taxing power. And what I can tell you is that if Republicans want to talk about taxes, then we’re happy to have that debate, because there is a very clear difference here.

President Obama has cut taxes by $3,600 for the average middle- class family in this country since he’s been in office. As you know, Republican budget plans would raise taxes on every middle-class family to give every millionaire and billionaire a $250,000 tax cut. There is simply no way to achieve the revenue-neutral promise that has been made on that expensive, many-trillion-dollar tax cut unless middle- class Americans get hit hard.

And the facts are clear with regard to the Affordable Care Act. The health care law provides a significant tax cut of up to $4,000 for 18 million middle-class individuals and families — a tax cut that, by the way, Republicans in Washington continue to vow to repeal, which, if that were to occur, would result in another hit to the middle class.

With regard to the penalty, as was discussed by Chief Justice Roberts in his opinion, for those who can afford health insurance but choose to remain uninsured, forcing the rest of us to pay for their care, a penalty is administered as part of the Affordable Care Act. And this is estimated by the CBO to affect 1 percent of the population — 1 percent. This is not — you can call it what you want, but it is affecting 1 percent of the population, because most people either have health insurance or will do the responsible thing, and if they can afford health insurance they will purchase it. Those who cannot afford it, as you know, will benefit from the generous credits and subsidies that exist in the Affordable Care Act as a part of the expansion of coverage to 30 million Americans.

I would also note — it is important to remember this — that the penalty within the Affordable Care Act that would apply, by CBO estimates, to 1 percent of the population, is modeled exactly on the penalty that exists in the health care reform that was promoted and signed into law by Governor Romney in Massachusetts.”

“So you guys are still saying it’s a penalty, not a tax?” a reporter then asked.

“You can call it what you want. If you read the opinion, it is not a broad-based tax. It affects 1 percent, by CBO estimates, of the population. It is not something that you assess like an income tax,” Carney responded.

“But for that 1 percent, is it a tax or a penalty?”

“It’s a penalty because you have a choice. You don’t have a choice to pay your taxes, right?” Carney responded. “…So your choice is to purchase health care reform or a penalty will be administered.”