Broken Tax Promises

Thom Lambert —  28 June 2012

Remember this?

How about this?:

GEORGE STEPHANOPOULOS:  You were against the individual mandate…


STEPHANOPOULOS:  …during the campaign.  Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?

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.  Any…


OBAMA:  What — what — if I — 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…

STEPHANOPOULOS:  I — I don’t think I’m making it up. Merriam Webster’s Dictionary: Tax — “a charge, usually of money, imposed by authority on persons or property for public purposes.”

OBAMA:  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.  I mean what…

STEPHANOPOULOS:  Well, no, but…

OBAMA:  …what you’re saying is…

STEPHANOPOULOS:  I wanted to check for myself.  But your critics say it is a tax increase.

OBAMA:  My critics say everything is a tax increase.  My critics say that I’m taking over every sector of the economy.  You know that. Look, we can have a legitimate debate about whether or not we’re going to have an individual mandate or not, but…

STEPHANOPOULOS:  But you reject that it’s a tax increase?

OBAMA:  I absolutely reject that notion.

Let the spinning begin.

Thom Lambert


I am a law professor at the University of Missouri Law School. I teach antitrust law, business organizations, and contracts. My scholarship focuses on regulatory theory, with a particular emphasis on antitrust.

5 responses to Broken Tax Promises

    Maurits Dolmans 29 June 2012 at 1:31 am

    I have to say I pay taxes in the US (a lot) without a vote, and I for one would be pleased if these taxes were used for healthcare, education, public infrastructure etc instead of waging war. As far as I am concerned, even if Obama thought the individual mandate could be seen as a tax (which I doubt, because you get individual health care in exchange), this completely pales in comparison with the WMD lies. Medicine heals. Weapons kill. And as to economical impact, this is what worries me, not Obamacare: Based on this, the best way to cut big Government is to start reducing military spending.


    Jonathan–The government did argue that the penalty was a tax, both in its brief and at oral argument. That was its third argument (after the Commerce Clause and Necessary and Proper Clause arguments). Before the act was passed, though, the Obama administration and congressional Democrats insisted that the penalty was NOT a tax. Avoiding that label was crucial to getting the law enacted (by the slimmest of majorities).


      I stand corrected re: the SG after looking back at the briefs and transcript, however it strikes me that was an argument rooted in semantics rather than policy to avoid having the Anti-Injunction Act bar consideration until the fines kicked in around 2015. So, in effect, using that label was crucial to getting the law decided upon this term by SCOTUS (by the slimmest of majorities).


    Thom: Not sure what your point is on this one. SCOTUS construed it as a tax and the SG didn’t actually argue that line of reasoning… so… you are saying Obama planned this as a tax the entire time knowing the Court would rule the way they did and thus broke his promise not to raise taxes on those making less than 250k a year? Please clarify as this feels a bit strained.

    northfork investor 28 June 2012 at 8:04 am

    thanks for initiating said spinning, he said sarcastically. I for one will read opinion and the dissent before I spin (or at least scotusblog). But i gotz a day job. Good to have scholarly blog sites doing the same thing.