I will start this out by saying I was at first disappointed and confused by the US Supreme Court's ruling on Obama-care. At first, it really didn't make sense to me and I was joining in with the crowd who were screaming about a massive increase in government power, and how there was now no limit on it because all they had to do was tax you on something to try and force you to do it.
Right now, I'm feeling glad that I made myself take a step back and think about it, because if you look at it honestly and openly, we've let Congress have that power for years and years, it's just been phrased differently.
Basically, since I know sometimes I get readers from other countries who don't necessarily keep up with American politics as much as some of us locals, the Supreme Court ruled that the 'mandate' portion of the bill which requires you to have insurance or pay a penalty was a tax, not a fine, and as such allowed under Congress' powers to tax people. Opponents of the bill immediately began screaming, as I already mentioned, about how the Supreme Court had just given the Congress free reign to tax people to make them do what they wanted. The kicker here is, they've been doing that for decades, just calling it something different.
To give you an example: under the current Federal tax code, and most State codes, you are allowed to deduct from your income any interest that you pay on a mortgage for your primary residence. So, all other things being equal, a person who has a mortgage payment will pay less in taxes then someone who rents on the exact same income. We have been taxing people for not having a mortgage for years in this country, it just sounds better to say that we're giving the person paying the mortgage a break instead of penalizing the person who doesn't.
Now, the first counter argument that comes up is home owners paying property taxes, etc, but push comes to shove the renter is paying it too, just not as directly. It's baked into their rents, same as any other tax is baked into the price of anything. It also doesn't do anything for the few people in this country who own their home without a mortgage payment.
That's right. We're not encouraging home ownership, we're encouraging people to be in debt on their home. Is it any wonder we're having problems with debt in this country? Our own Government is acting like it wants us to be! The tax code is littered with things like this, well meaning bits of legislation that wound up having unforeseen and unintended consequences. I don't think for an instant that the person who came up with the mortgage interest deduction wanted people to be up to their eyeballs in debt, but it certainly has helped cause it, regardless of the initial motivation.
So, to arrive at the Supreme Court ruling, all you need to do is turn things around. The person renting his home is taxed more the the person paying a mortgage. There is a tax applied to people who do not have a mortgage. It's not even a step, much less a leap, to get from that to there is a tax applied to people who do not have health insurance. The only real difference is that the tax on people who don't have health insurance is better defined then the one on people who don't have a mortgage because the one is fixed and the other is based on income.
So, long story short, in my opinion the only thing the Supreme Court ruling did was call a spade a spade in spite of what the Obama administration was trying to do. They insisted on several occasions that the fee from the mandate was not a tax, however the Court has clearly decided it is, and that is the only way that it can be justified under current law. If only we could get them to rule like this more often, maybe American politicians would be more honest with themselves and with the American people.