WHAT’S IN A WORD: Is a parking ticket a tax?

FRIDAY, JUNE 29, 2012

Ladies and gents, shall we parse: We had to laugh at one part of today’s New York Times editorial.

The Times was looking for the best way to praise Chief Justice Roberts. In a wonderfully amusing way, this is what they said:
NEW YORK TIMES EDITORIAL (6/29/12): When Congress was struggling to pass the health care bill, lawmakers refused to use the word tax to describe the proposed penalties on those who did not obtain insurance. Instead, they used the words “mandate” and “penalty.”

The Obama administration went along with this purely political pretense but made a cogent argument to the Supreme Court that the taxing power was a strong ground for the law, and it sensibly carried the day.
We’re not joking—that’s what they said! Shall we parse?

According to the editors, lawmakers used the word “penalty” to describe the law’s proposed penalties! That would seem like a fairly obvious choice of words.

But so what! In the next paragraph, the editors describe this choice of words as a “purely political pretense!” Calling penalties by their name turned out to be a pretense!

Only in the Times! Somewhat funnily, the letters page includes a letter which pretty much called this shot:
LETTER TO THE NEW YORK TIMES (6/29/12): Chief Justice John G. Roberts Jr.’s legerdemain in finding what Congress clearly intended to be a civil penalty to be a tax seems the opposite of the old saw that if it looks like a duck and quacks like a duck, it must be a duck.

Good grief, what an act of judicial activism—one that I suspect the left will applaud.
The letter-writer, from Draper, Utah, had that last part right.

Having said that, is a penalty a tax? We’ll ask that question in the form of a different question:

Is a parking ticket a tax?

Most people think of a parking ticket as imposing a fine. Few people would think of that fine as being a “tax.” In part, that’s because you pay the fine by sending a check to the city government.

You don’t pay the fine for a parking ticket when you file your taxes, although in theory the payment of tickets could be handled that way.

Many other types of payment are handled through tax filings. This may disguise the nature of such transactions. One prime example:

A so-called mortgage deduction is really a government subsidy. Each month, the federal government helps the homeowner pay his monthly nut.

This transaction would look like a subsidy if the government simply sent a check to the homeowner every month. But the transaction isn’t handled that way. Instead, the transaction is handled through the homeowner’s annual filing of taxes.

For that reason, this subsidy comes to be seen as a “tax deduction.” The homeowner ends up saying that he’s been allowed to “keep more of his money.”

In one sense, that's true, of course; the homeowner did keep more of his money. But in essence, the federal government sent him a check. It just chose a genteel way to do it.

Parking tickets aren’t thought of as “taxes.” Neither are the penalties you may have to pay if you let your car registration lapse. These payments are referred to as penalties or fines. They are rarely thought to be “taxes.”

That said, should the penalty in the health care act be thought of as a tax?

Folk can judge that as they wish. Fines and taxes bear a bit of a family resemblance; in each case, a citizen is required to give the government some of his money. In this case, there may be some basis in technical legal reasoning behind the Roberts approach. The relevant passage in his decision is excerpted in today's Times.

But however you scan it, we did enjoy that clumsy attempt to shower praise on Roberts’ head. Only in the New York Times do you get that kind of amusement!

Let's review: Lawmakers used the word “penalty” when they referred to a law’s proposed penalties!

That was a scam, the Times quickly said! Where else do you get this much fun?

30 comments:

  1. Really AnonymousJune 29, 2012 at 1:33 PM

    I believe the penalties are collected by the IRS, so it's not really a stretch either way. The slobbering over Roberts, by the same people who would have been screaming about a "coup" and making tiresome Nazi analogies if Roberts had gone the other way on the tax issue, was pretty funny though. God, what hacks.

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    1. I guess you could call it "slobbering," but I wouldn't. It's hard to ignore at least the possible, at a minimum, significance of Roberts breaking away from Thomas, Scalia and Alioto while "swing vote" Kennedy joined them on a very important decision, and giving pause to consider what that might mean in the future.

      No matter what you think, three times this week, the Supreme Court has directly ruled against so-called "states' rights." That's fascinating, and far more worthy of serious discussion than wondering whether a penalty to be collected by the IRS is really like a parking ticket.

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    2. Really, really anonymousJune 29, 2012 at 2:20 PM

      Thanks for using "so-called." It's a signifier that I don't have to pay attention to your argument. Saves time. Thanks again.

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    3. Of course you disregard arguments that don't compute. How tribal of you.

      FYI, I called them "so-called" because "states' rights" have been used to do all sorts of things since this nation was founded, from slavery to Jim Crow to poll taxes.

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    4. So who, exactly, is "slobbering?" I'm glad he voted with the liberal wing, but my opinion of him hasn't changed a whole lot.

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  2. That's your first contribution to the discussion of the historic Supreme Court decision that preserved the first national health care system in the country's history? To worry why the penalty for violating the individual mandate isn't like a parking ticket?

    And you spend days upon days accusing NYT columnists and MSNBC talking head hosts of glomming onto trivia at the expense of serious discussion?

    I especially like this not-so-clever line:

    "You don’t pay the fine for a parking ticket when you file your taxes, although in theory the payment of tickets could be handled that way."

    Yeah, Bob. "In theory" you could also pay your groceries by sending a check to the IRS once a year. But in actual practice on the planet the rest of the world lives in, that's not a very good idea, is it?

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    1. What do you mean "the first national health care system in the country's history"?

      Aren't you forgetting Medicare?

      Also, isn't "national health care system" a bit of a stretch to describe the mostly state-based PPACA?

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  3. What theory is that, where grocery purchases involve paying the government?

    Bob's analogy makes sense: two different mechanisms for achieving the same result, the exchange of funds between an individual and a government.

    You're not even on the same planet with your wild stretch.

    But we get it -- you hate Somerby and for some reason you'll be here every day to show it.

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  4. The Times delivers a comedy classic in saying the Obama administration "went along" with the characterization of the as "going along" with calling the tax a penalty.

    Is the Times unaware that the President himself directly and forcefully disputed the notion that the penalty was a tax?

    In 2009, George Stephanopoulos asked the President about this very point. It is super funny to read the transcript and the comments of Steve Benen.

    We won't dwell on this too long. Benen now works for Maddow.

    * * * * * * *
    http://www.washingtonmonthly.com/archives/individual/2009_09/020025.php



    OBAMA SCHOOLS STEPHANOPOULOS ON INDIVIDUAL MANDATES.... This was one of the livelier exchanges between President Obama and George Stephanopoulos on today's ABC News' "This Week."

    The host argued that an individual mandate would force people to spend money, which necessarily makes the idea "a tax." The president disagreed -- strongly.

    OBAMA: Well, hold on a second, George. Here -- here's what's happening. You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care. Now what I've said is that if you can't afford health insurance, you certainly shouldn't be punished for that. That's just piling on. If, on the other hand, we're giving tax credits, we've set up an exchange, you are now part of a big pool, we've driven down the costs, we've done everything we can and you actually can afford health insurance, but you've just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that's...

    STEPHANOPOULOS: That may be, but it's still a tax increase.

    OBAMA: No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I'm not covering all the costs.

    STEPHANOPOULOS: But it may be fair, it may be good public policy...

    OBAMA: No, but -- but, George, you -- you can't just make up that language and decide that that's called a tax increase.... What if I say that right now your premiums are going to be going up by 5 or 8 or 10 percent next year and you say well, that's not a tax increase; but, on the other hand, if I say that I don't want to have to pay for you not carrying coverage even after I give you tax credits that make it affordable, then...

    At that point, Stephanopoulos referenced Merriam Webster's, to try to nail down a precise definition of a "tax." The president responded, "George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition."

    The host added, "But your critics say it is a tax increase."

    Obama replied, "My critics say everything is a tax increase."

    And here endeth the lesson.

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    1. Here's the fine point you fail to understand.

      Obama was disputing the notion that this was a tax INCREASE, not a penalty for a specific non-behavior (i.e., not buying health insurance) levied through Congress' taxing authority to tax, and collected by the IRS.

      Five justices of the Supreme Court got it. And maybe some of the four who voted in the minority got it and voted against it anyway.

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    2. Ha Ha. Understanding the fine points. The Supreme Court just held that it was a tax. And no where anyone argued that it was a tax cut, or tax neutral.

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  5. Come on Bob, do your research. These very points were made during oral arguments:

    ' “With respect to the question of characterization,” Verrilli told Justice Scalia, “the -- this is -- in the Internal Revenue Code, it is administered by the IRS; it is paid on your Form 1040 on April 15th.” A few minutes later, pressed by Justice Roberts, he reiterated the point. “[I]t is in the Internal Revenue Code,” Verrilli said. “It is collected by the IRS on April 15th.” '

    "CHIEF JUSTICE ROBERTS: You're telling me they thought of it as a tax, they defended it on the tax power. Why didn't they say it was a tax?
    GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objectives. But it is in the Internal Revenue Code, it is collected by the IRS on April 15th."

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  6. You tell 'em Bob! The Constitutions says Congress has the power to "lay and collect Taxes, Duties, Imposts, and Excises." Not nothin' about no 'penalty.'

    And another thing, the Constitution says Congress can COIN money. Ain't nothing in there about bills.

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    1. Don't you know that the IRS "in theory" could collect all parking fines assessed in the United States? Bob says so.

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    2. What's your problem????

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  7. A more extensive discussion of the issue and terminology, at least from one perspective: http://www.nybooks.com/articles/archives/2012/may/10/why-mandate-constitutional-real-argument/

    My first thought on hearing the decision was it's a bit of aikido by Roberts (especially after Toobin's analysis of Roberts's mischief here: http://www.newyorker.com/reporting/2012/05/21/120521fa_fact_toobin). Roberts decided to set the conservative heads on fire to ensure their victory in November.

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  8. "... a bit of aikido"

    That's the new term for approved judicial activism.

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  9. And of course "judicial activism" is the new term for "I don't like the decision."

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  10. Look, if everyone has to buy insurance or pay a fine, it's the EVERYONE PAYS thing that makes it like a TAX. Only people who mispark have to pay a ticket fine, so that's why it's a PENALTY. This seems pretty understandable to me, and Bob is just being Maddowesque in his snarking of The Times.

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    1. Look, if everyone has to pay to park or pay a fine, it's the EVERYONE PAYS thing that makes it like a TAX.

      Only people who don't insure have to pay this fine fine, so that's why it's a PENALTY.

      This seems pretty understandable to me, and I'm just being Somerbyesque in my snarking of The Greg.

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    2. Anony, try thinking about this real SLOWLY....

      EVERYONE has to pay on the insurance, if you don't by the insurance, you have to pay a fine, so either way, EVERYONE has to pay.

      A traffic ticket is a fine levied on a certain behavior. Many or most people won't commit this behavior. It's a PENALTY you incur for an act of carelessness or choice.

      With the former, there is no way to avoid payment. TAX. With the latter, there are many ways to avoid the behavior and thus not incur the fine. PENALTY.

      Just read this fifty times or so, and I think there is a possibility you might figure it out.

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    3. Greg,

      Try realizing you don't have a monopoly on clear thought. And that your isn't that clear.

      EVERYONE has to pay to park, if you don't pay to park, you have to pay a fine, so either way, EVERYONE has to pay.

      An insurance penalty is a fine levied on a certain behavior, choosing not to buy insurance. Many or most people won't commit this behavior. It's a PENALTY you incur for an act of carelessness or choice.

      With the former, there is no way for parkers to avoid payment. TAX. With the latter, there is a way to avoid the behavior and thus not incur the fine. PENALTY.

      Just read this one more time and you may see that even you can figure it out.

      The messages:

      TAX doesn't mean "there is no way to avoid payment" -- many taxes are avoidable entirely.

      AND Words don't get their meaning through what Greg says they mean.

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    4. Actually, NO, everyone does not need to pay to park. Everyone does not even have to park. And those who do have the option of being very careful about the restrictions on parking in a given area. What you are saying here is CLEARLY, OBVIOUSLY, WRONG on the face of it. Two plus two does not equal three.
      In this case, the state is saying EVERYONE has to buy insurance, so, it's not an avoidable payment. It's inevitable, like death, and (drum roll please), like TAXES.
      I do not have a monopoly on clear thought, nor does anything I've written suggest that claim. As I have stated, again, two plus two does NOT equal three.
      You are simply being stubborn to the point of foolishness.

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    5. Greg, everyone who drives has to have car insurance and if they don't, they can be fined. Ergo, car insurance is a tax. You could reply that since not everyone has a car, car insurance is not a tax. But if I buy health insurance, of my wn free will, like most people do thru their employers (indirectly payin gor it because they are being paid a lower alary), I am buying insurance, not paying a tax. AC

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  11. First of all, the mandate should have easily been upheld under the Commerce and Necessary and Proper clauses, but I'll take it being upheld under congress's taxing power if I must. And whether the mandate, in practice, acts more like a parking ticket than an annual tax bill does not change the fact that it fully qualifies as a tax for consititutional purposes.

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  12. Not a lawyer, but it seems to me that there are two different issues here.

    One, is the individual mandate a tax?

    Two, is the way refusing to carry insurance under the mandate is handled a tax?

    I think the people beating the drums about how IT'S A TAX! are misapplying Roberts's statement on (2) as though it were on (1).

    Then there's a separate issue about the distinction between saying something is constitutional under the aegis of a power to levy taxes and saying that it _is_ a tax. A "penalty" or "fee" or "credit" arising from payment or nonpayment of taxes is not itself "a tax."

    Anyway, consider the difference between the mandate and the enforcement mechanism that gives the mandate force. I think Roberts is saying that the enforcement mechanism arises from the power to tax -- not that the mandate is itself a tax.

    I hope that made sense -- it was clearer in my head than it was on the screen.

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  13. Good to see that in the wake of the most significant progressive triumph in decades, we're focused on the big picture. This is how we progressives win, I guess.

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    1. The upholding the law under the taxing power, instead of under the commerce clause is an extremely important circumstance. It's not clear what the ramifications will be. Not sure what you mean by the"big picture." AC

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  14. Did any of you actually read Roberts' opinion?

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