Tax Or Mandate? It’s Hardly a Dilemma

Paul wrote yesterday that Mitt Romney is well positioned, politically, on Obamacare despite his campaign’s supposed confusion during the last few days as to whether the mandate is or is not a tax. That is my view as well. Is the mandate a tax, or isn’t it? I don’t think the question poses a dilemma for Romney. Quizzed on the subject by CBS in an interview that will air tonight and tomorrow, he responded nicely:

JAN CRAWFORD: Let’s talk about the law and whether the mandate is a tax because, of course, the court said it was a tax. Congress could pass this as part of its taxing power. The President disagrees with that. He said that it’s a penalty, it’s not a tax. Republicans across the country have seized on this saying he’s secretly trying to raise taxes. Your senior adviser said that you believe that it’s not a tax; that you agree with the President that the mandate is just a penalty. Why don’t you think the mandate is a tax?

GOV. ROMNEY: Well, the Supreme Court has the final word and their final word is that Obamacare is a tax. So it’s a tax. They decided it was constitutional. So it is a tax and it’s constitutional. That’s the final word—that’s what it is. Now, I agreed with the dissent. I would have taken a different course, but the dissent wasn’t the majority. The majority has ruled and their rule is final. It is a tax.

CRAWFORD: So you believe that—you would say that the mandate now is a tax?

ROMNEY: Well, that the law of the land. The Supreme Court is the highest court in the nation and it said that it’s a tax, so it’s a tax. That’s what it is. And what I’d like to hear is how President Obama can say he doesn’t think it’s a tax. He disagrees with the court. He thinks the court is inaccurate. If that’s the case, then he must think the bill is unconstitutional because, in order to find it constitutional, they had to find it a tax. And by the way, don’t forget, it was his Solicitor General that went into the court and argued it was a tax. And the conclusion of the court that it’s constitutional…

CRAWFORD: Are you [inaudible]?

ROMNEY: …the conclusion of the court was in order for them to find it constitutional, they had to find it was a tax. So it is a tax.

CRAWFORD: Have you changed your views on this? I mean, do you now believe that it is a tax, at the federal level, that the Supreme Court has said it is a tax, so it is a tax.

ROMNEY: Well, I said that I agreed with the dissent and the dissent made it very clear that they felt it was unconstitutional, but the dissent lost. It’s in the minority. And so now, the Supreme Court has spoken, and, while I agreed with the dissent, that’s taken over by the fact that the majority of the court said it’s a tax and, therefore, it is a tax. They have spoken. There’s no way around that. You can try and say you wished they had decided a different way, but they didn’t. They concluded it was a tax. That’s what it is and the American people know that President Obama has broken the pledge he made. He said he wouldn’t raise taxes on middle-income Americans. Not only did he raise the $500 billion that was already in the bill, it’s now clear that his mandate as described by the Supreme Court is a tax.

CRAWFORD: But does that mean that the mandate in the state of Massachusetts under your health care law also is a tax? I mean, you raised taxes as governor.

ROMNEY: Actually the chief justice in his opinion made it very clear that at the state level, states have the power to put in place mandates. They don’t need to require them to be called taxes in order for them to be constitutional. And as a result, Massachusetts’ mandate was a mandate, was a penalty, was described that way by the legislature and by me, and so it stays as it was.

CRAWFORD: So at the state level because of … you’re saying the Supreme Court says that’s different, that the federal government – the powers are different between the states and the federal government? Does that make sense to you?

ROMNEY: Just take a read of the opinion. The chief justice said that states have what’s known as police power, and states can implement penalties and mandates and so forth under their constitutions, which is what Massachusetts did. But the federal government does not have those powers, and therefore for the Supreme Court to reach the conclusion it did – that the law was constitutional – they had to find it was a tax, and they did. And therefore Obamacare’s a tax. Like it or not, it’s a tax.

Romney is correct about the majority’s discussion of the police power. Now, will most voters understand the difference between the states and the federal government with respect to their power to impose mandates, including a requirement to buy insurance? Probably not. They should, since their state government has long required them to buy automobile insurance, but they probably don’t. Moreover, to the extent they understand the difference, most voters won’t care; the point is relevant only from a constitutional, not from a policy, perspective. But it just doesn’t matter. The Supreme Court has spoken: for Obamacare to be constitutional, the mandate must be a tax. The Democrats will get nowhere by talking about whether to call the mandate a tax or a penalty; on the contrary, the more they bring the subject up, the worse for them and the better for Republicans.

PAUL ADDS: It seems to me that Romney is engaging in some fancy footwork here, and I don’t find his arguments very persuasive. First, the Supreme Court didn’t actually say the mandate imposes a tax; it said that one can plausibly hold that view, which is good enough to save the statute. Second, even if the Supreme Court had said flat out that the mandate imposes a tax, that would not make it so. The Supreme Court’s mandates are binding — they control what happens going forward — but that doesn’t mean that citizens such as Mitt Romney must agree with the Court’s reasoning or its characterizations.

Third, though I may be missing something, Romney’s argument about Massachusetts doesn’t seem to hold up. Yes, Romneycare could be found constitutional without deciding whether it imposes a tax. But if the Obamacare mandate imposes a tax, so too does the Romneycare mandate, regardless of whether this characterization is necessary to uphold its constitutionality.

I agree with John, however, that Romney isn’t the one with a dilemma. Obama’s lawyer told the Supreme Court that Obamacare imposes a tax. Obama denies that it does. But the Court upheld the constitutionality of Obamacare in deference to the Obama administration’s characterization of the mandate as a tax. Meanwhile, Obamacare remains unpopular.

Obama is the candidate with a significant problem on this issue.