Justice John Roberts and The Roberts Court - Health Care Act Legal as a Tax – A Political Ruling - Opinion

We the People - the Great Awakening After the Act was passed in 2010 - image: rossputin.com

The Affordable Health Care Act passed by Congress in 2010 became a “call to action” for millions of American’s who found themselves suddenly faced with the realization that Congress and the Executive Branch under the control of President Barack Obama and the Democrat Party was, indeed, plotting a pathway to more taxation and government control over individual rights – the result was a watershed election in November of 2010 which cost the Democrats control of the Congress. The movement became the “Tea Party” and the rest, as they say, is history. Yesterday the Roberts Court ruled that the act was Constitutional based on the fact that the Affordable Health Care Act passed by Congress was intended as a “Tax” – immediately the assumption by conservative pundits and individuals was that Chief Justice Roberts was somehow flawed – and the Courts ruling a death knell to individual liberty – with one glaring exception – a brilliant statement by Erick Erickson of RedState in an email: “Having gone through the opinion, I am not going to beat up on John Roberts. I am disappointed, but I want to make a few points. John Roberts is playing at a different game than the rest of us. We’re on poker. He’s on chess.” .

Robert’s, in his ruling noted:

“Congress may also “lay and collect Taxes, Duties, Im¬posts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Con¬gress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.”

The message: The Affordable Health Care Act, which cost the Democrats the Congress in 2010, was indeed a Tax – had an immediate effect – a political and financial effect that will have far-reaching consequences for both major political parties and the American people in general.

From the New York Times article: “Justices Allow the Term ‘Tax’ to Embrace ‘Penalty’” :
“The law in question did not call it a tax. It called it a penalty for not buying health insurance. To the dissenters, that proved it was not a tax. To the chief justice, the choice of words could not obscure the reality. He noted that those who chose to pay the penalty rather than buy health insurance would be writing checks to the Internal Revenue Service and would not end up with a criminal record.” …

“The second health care bill passed by Congress in 2010, devised in part to fix errors in the first law and in part to pay for it, raised the Medicare payroll tax rate by 0.9 percentage points, to 3.8 percent, effective in 2013.

It also extended that tax to income on investments, including capital gains, interest, dividends, annuities and royalties, but only for individuals with a total income of more than $200,000, or $250,000 for married couples filing a joint return.
For people whose incomes are that high, the effective tax rate on dividends and long-term capital gains will rise to 18.8 percent from the current level of 15 percent, said Robert N. Gordon, president of Twenty-First Securities, a brokerage firm.

It could, of course, go even higher if Congress fails to extend the George W. Bush tax cuts that are now scheduled to expire at the end of the year. Mr. Gordon said that could encourage some taxpayers to sell investments before the year ends, rather than wait. “We know taxes are going up,” he said. “It is just a matter of how much.” (New York Times – read the complete article here

The fact that not purchasing health insurance is perceived as a “criminal act” is correct as one not purchasing heath care is, under Roberts ruling “evading federal taxes” – therefore committing a crime. In Massachusetts, under the mandate, individuals who cannot afford the high monthly premiums, elect to pay a “tax” to the Mass. Department of Revenue rather than pay the hefty monthly premiums. Premiums are set by the insurance carriers based on a “pool” of individuals and the mandated coverage by state. In Massachusetts the number of carriers is limited (as it is in many states), therefore, the pool is limited, the risk is greater and premiums are adjusted upward accordingly – the affordable insurance becomes unaffordable. The monthly premium of $1,000 for a family plan, when compared to a $2900 fee payable to the State and the end of the year, makes the fee more attractive – those individuals are “deemed” by the State as “covered” as they have paid the “tax” – therefore, not subject to criminal penalties. The fees set by the Federal program are upwards to $25,000, dependent upon income. In the case of individuals who, subject to individual state regulations, cannot afford monthly premiums, must now pay two “Caesar’s” the state and the federal government. The Act upheld created multiple taxes on individuals making average incomes - an unintended consequence of the “Affordable” Health Care Act.

The additional taxes levied to pay for the program, through higher tax rates on capital gains, not only effects those that are “rich” by standards set by political necessity, but by every single American citizen who is the recipient of a gain in income as determined by the Internal Revenue Service. This gain in income can be a pension received in a lump sum as a death benefit crucial to a widow upon the death of his/her spouse – a sudden life savings of $60,000 is immediately reduced by both Federal and State taxes. Those saving in individual retirement programs, specifically the baby boomers, now are finding that retirement savings, now withdrawn in harsh economic times, at retirement age, are subject to Capital Gains Taxes – the amount can be as little as $10,000, and the return needed to survive substation ally reduced, specifically in one lives in a state that also taxes a “capital gain”. Those politician’s on the drumbeat of “tax the rich” and “distribute the wealth” citing Capital Gains, are deceiving the “masses” who will and now are discovering that “wealth” is subjective to the standards of the Federal Government.

Those “investors” who will be pulling investments prior to the implementation of the new plan/tax, are in most cases, likely to be businessmen, who will also not be “hiring” – therefore affecting the employment rate and Wall Street. Wall Street to those who are so enamored of pointing fingers at the “few Wealthy who should pay more” also is tied to every single pension or retirement plan, either corporate or individual – see Capital Gains Taxes and the reduction of retirement savings of millions of baby boomers as a result.

The political aspect was immediate as both political parties sent out letters, made robo-calls and appeals of all sorts for funds: From the DNC’s email calling for support for Obama, now that the health care ruling was in his favor – to protect him from those who would see him “overthrown”, to every single Conservative Congressional Candidate, Senatorial Candidate and especially the Tea Party calling for help to overthrow, not only the President, but every Democrat who supports the bill down to the office of Dog Catcher.

GOP Presidential candidate Mitt Romney fared exceptionally well receiving “more than $2 million and more than 20,000 donations, as of about 4:50 p.m. ET.” yesterday (USA Today).

Indeed, a tax, and indeed one would be best served not playing a round of chess with Chief Justice John Roberts.

Final note: In Massachusetts the Daily Hampshire Gazette offered a list of politicians who both applaud and oppose the Decision to Uphold the Healthcare Tax Act: “Massachusetts politicians who support health care law celebrate ruling”: Supporting: All Democrat Congressional Representatives, the Candidate for Senate, Elizabeth Warren, and Opposing, all Republican Candidates for Congress and one “shot heard round the world in 2010” – Senator Scott Brown.

Calls in support of Brown are now coming in from all area codes, into Massachusetts, - these calls are by individuals, who are making “calls from home” - the increase was immediate upon the Courts decision. One can bet the House and the Senate, that 2012 will be an election, as historic, or perhaps more historic than that of 2010.