The Obama Administration clearly states that the individual mandate is not a tax.

Notes Jonathan Adler, pointing to this video:



But of course, the government is arguing in the Supreme Court that the individual mandate is a tax, authorized by Congress's taxing power. Read the brief for the United States — PDF — beginning at page 50:

The “practical operation” of the minimum coverage provision is as a tax.... It amends the Internal Revenue Code to provide that a non-exempted individual who fails to maintain a minimum level of insurance shall pay a monthly penalty for so long as he fails to do so. 26 U.S.C.A. § 5000A. The amount of the penalty is calculated as a percentage of household income for federal income tax purposes, above a flat dollar amount and subject to a cap. Id. § 5000A(c). It is reported on the individual’s federal income tax return for the taxable year, ibid., and “assessed and collected in the same manner as” other specified federal tax penalties. Id. § 5000A(b)(2), (g).

Individuals who are not required to file income tax returns for a given year are not required to pay the penalty. Id. § 5000A(e)(2). The taxpayer’s responsibility for family members depends on their status as dependents under the Internal Revenue Code. Id. § 5000A(a), (b)(3). Taxpayers filing a joint tax return are jointly liable for the penalty. Id. § 5000A(b)(3)(B). And the Secretary of the Treasury is empowered to enforce the penalty provision. Id. § 5000A(g)....

Although the taxing power may not be used to impose “punishment for an unlawful act,” United States v. LaFranca, 282 U.S. 568, 572 (1931), the minimum coverage provision does not impose punishment. It does not apply retrospectively; instead, it imposes a month-to-month penalty for a failure to maintain adequate coverage, with liability ceasing when adequate coverage is obtained. 26 U.S.C.A. § 5000A(a)-(c). The tax cannot exceed the cost of qualifying insurance, id. § 5000A(c), does not apply to persons below a certain income level who do not need to file a federal income tax return, id. § 5000A(e)(2), and contains a “hardship” exemption, id. § 5000A(e)(5). It has no scienter requirement, and bars criminal prosecution for failure to pay. Id. § 5000A(g)(2)(A).

That sounds pretty sincere. And yet President Obama's acting budget director Jeffrey Zients acted completely confused when House Budget Committee Rep. Scott Garrett, R-N.J., asked him if the penalty for failure to buy insurance was a tax.

Well, I suppose it depends on what the meaning of the word "tax" is. It's one thing for the purpose of political argument: Democrats in Congress didn't want to call it a tax when they were jamming it through, and Obama doesn't want to call it a tax now as he's promoting a budget with no new taxes for those making less than $250,000 a year. But for the purposes of legal argument, you might want to characterize it as a tax. The serious question is whether the Supreme Court will accept that characterization for the purpose of upholding the law, even though for political purposes the word was not — and is not — used.

And the answer to that question depends on whether the Justices think that analysis of the political dynamics matters in the interpretation of the scope of Congress's enumerated powers. Whatever the vigor of the Court's role here — and obviously much is left to Congress's political will — it is crucial for the people — exercising their political pressure on the Congress that works its political will — to see what is happening. Even in the thrall of judicial restraint, the Court should reject an argument based on fooling the people about what Congress is doing. The people are especially vigilant about new taxes, so denying that something is a tax is an important maneuver in the political arena. If that move is made to ward off public outrage, it should not be easy to turn around win the favor of judges by calling it what you did not dare tell the people it was.