It doesn't make much common sense that a tax on people who don't have health insurance could be so big. Most people have insurance, so by definition they won't pay this tax.
When Rep. Cathy McMorris Rodgers, Mitt Romney’s liaison to Congress, got to the podium after the big Supreme Court ruling, she led with their campaign’s strongest punch.
“The court ruled today that, in fact, the Affordable Care Act is a tax,” the Spokane Republican said. “It is the largest tax in American history.”
None of that is true. The court had ruled only that a penalty for not having insurance is a tax, not the entire act. And neither this tax, nor the entire act, is the largest tax hike in U.S. history.
But by week’s end, this line had been repeated countless times, in sound bites, fundraising letters and tweets across the nation.
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The Republican National Committee called the mandate “one of the largest tax increases in our history.” Multiple GOP officials called it “a massive tax,” “the new precedent of a federal tax to compel behavior” and, getting victim-specific, “the largest tax on the poor and middle class in the history of this country.”
Radio host Rush Limbaugh poured a can of bombast on this truth bonfire, dubbing it “nothing more than the largest tax increase in the history of the world.”
The world? That leaves a tantalizing possibility there’s a worse tax somewhere in the galaxy.
These statements went mostly unchallenged, including in The Seattle Times. We quoted a retired Eastside doctor, Roger Stark, who now does health policy for a local think tank, the Washington Policy Center.
“A majority of justices interpreted the mandate as a tax, making this one of the largest tax increases in American history,” Stark said in a statement.
It sure feels like someone, somewhere, decided this is going to be the mantra of the coming campaigns.
But it doesn’t make much common sense that a tax on people who don’t have health insurance could be so big. Most people have insurance, so by definition they won’t pay this tax.
The tax is what the health law calls, in classic euphemism, a “shared responsibility payment.” You pay if you don’t have insurance. There are subsidies to help people get coverage, as well as exemptions from the penalty for the very poor.
The payment starts at $95 a year and goes to $695 by 2017. It is expected that 4 million people will pay it, raising about $4 billion, annually, by 2019, says the Congressional Budget Office.
That means this tax falls on about 1 percent of people. And will bring in less than two-tenths of 1 percent of all federal tax revenues.
Which means it’s more like one of the smaller taxes in American history.
Chief Justice John Roberts seemed especially underwhelmed by the tax.
“The amount due will be far less than the price of insurance,” he wrote. “It may often be a reasonable financial decision to make the payment rather than purchase insurance.”
The point being that whatever you call it — penalty, tax, shakedown — it may ironically end up being too weak to compel people to do anything. Roberts also said there’s nothing precedent-setting about it.
“Taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods,” he wrote.
He refrained from citing Massachusetts, which imposed an identical health penalty under Romney, only at the state level. But Justice Ruth Bader Ginsburg couldn’t resist, saying, “Congress followed Massachusetts’ lead.”
Even if you add up all the other taxes in the act — they are far more substantial and include taxes on the wealthy, big insurers and drug manufacturers — the price tag still is not near the highest in U.S. history. PolitiFact, the fact-checking website, has noted that many tax packages dwarfed this one, including one passed under Reagan. It rated this claim as a “Pants-On-Fire” falsehood.
At this point, you’re probably saying: OK, OK, they’re exaggerating. What’s the big deal?
The big deal is that this has the feel of a Big Lie. It’s beyond the usual spin. It’s one of those choreographed misstatements that is so far off it can perversely become truer than true. Annihilating the facts from the blind side.
The Washington Policy Center has had some good critiques of the health-care law. I asked if they were sticking with this totally off-base claim. They said yes.
“The Obamacare health-care-mandate tax is one of the largest tax increases in history because it applies to every adult resident in the country,” the center’s Paul Guppy explained.
Even though most of us won’t pay?
Doesn’t mean it won’t get you someday, he said.
Of course by that logic, every tax is the largest tax in American history.
Which I bet is just how they wanted me to end this column.
Danny Westneat’s column appears Wednesday and Sunday. Reach him at 206-464-2086 or email@example.com.