Wednesday, April 21, 2010
I'm doing my taxes and thinking about mandates. That is natural because health reform passed during tax season. Critics argue that the new law's requirement to purchase insurance or pay a fine is a radical departure and unconstitutional.
In fact, this is nothing new. Our tax returns are full of implicit mandates with huge penalties -- in the form of lost credits and deductions -- for noncompliance. The government wants us to donate to charity, own a home, save for retirement, adopt a child, buy a hybrid car ... If we don't, we pay more tax (a penalty).
There is a semantic difference between the health insurance mandate and these other tax nudges in that the government doesn't require you to donate to charity or own a home. But the government doesn't really require you to get health insurance either. You are free to ignore the "mandate" and pay the tax.