With all the hubbub about politics, and one’s pocket book, and the war of words between Democrats and Republican’s – it is without doubt, one of the biggest disservices to the American People that the question of whether or not Obama Care is a Tax or a Penalty be answered. It is constantly asked.
The Democrats want the people to view it as a penalty – if you don’t have insurance, and are uninsured – then you pay a “penalty”
Using the Massachusetts Model - similar in “penalty structure” to the Federal Model
When it comes time for those of you who are not offered employer insurance, or if offered, cannot afford the insurance or, if unavailable, one cannot still afford the insurance – one can pay a penalty to the State of Massachusetts, Department of Revenue, which is sometimes up to two-thirds less than having to buy insurance, but at least – one is not going to jail for not paying their “penalty”.
Additionally, the penalty is paid to the Department of Revenue, the department that is directly responsible for all taxes in Massachusetts.
Moreover the employer, the employed, the unemployed, the underemployed, must produce proof of insurance to the state of Massachusetts in order to file their tax returns – in other words, there is no way around not having health insurance in Massachusetts - if one does not – one pays the “fee” to the Commonwealth.
Under the Affordable Health Care Act, the situation is similar, except forms will be going to the Internal Revenue Service, if one does not have the insurance papers, or proof of insurance, one is assessed a penalty of up to $25,000, and if one can’t pay that penalty? – then one is subject to interest on the outstanding balance, one might have wages garnished, or even social security garnished, and incur incredible legal fees, or face prison. This is for every single American that is not insured, it does not affect those on Medicaid, or Medicare, or those who have insurance through employers, but those who do not have the luxury of either, and there are millions of them – all earning anywhere from $30K to under $200K per year.
So, is it or is it not a tax?
The rule of thumb is this: if you pay a fee or a penalty to an agency such as the Internal Revenue Service, must include supporting data on your Tax Returns in order to either become except from the penalty or pay the penalty – then that penalty – on your Tax Returns, and the monies that you pay – is a TAX.
When money comes out of your pocket and is placed in the hands of a government – call it a fee, call it a penalty – if it sounds more politically appealing, but at the end of the day, the citizen who’s wallet is slimmer, who’s mortgaging their home, if they can to pay the fees levied by the IRS for not having health insurance, is having their wages, or tax returns garnished for not having health insurance, and has to make any payments to an agency who’s sole specific purpose is to collect taxes for the Federal Government – what does that make the money leaving one’s pocket and going to the Federal government? – A Tax
Therefore, a penalty or a fee is just a nice word used by politicians to get you to pay a – Tax.
It’s simple, it’s logical, and now the American Public is being forced to purchase an item, and if they cannot afford to purchase that item? – They are being taxed, and if they do not pay that tax, they are considered “criminal”.
More-over, if one lives in a state that already has Health Care Reform with penalties in place for non-compliance and those “taxes” are sent to a Department of Revenue, then one will be liable to pay two fines – or two taxes – just like one does the income penalty – or the federal income penalty, the taxes one pays or is penalized for working for a living. That’s a stretch, but it allows one to understand that every nickel or dime one is paying to a state or government is not a “fee” or “penalty” is it a tax. The word tax being unpopular, is often interchanged with “fee” or “penalty” but is, and remains a tax.
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