Taxing Inactivity

Taxing Inactivity

© 2014 Rick Adamson

By Rick Adamson 8.2.14

I am not aware of any U.S. tax that has ever levied on someone (including employers) for not doing something. Taxes normally result from activity such as the production of earnings or wages or buying gasoline, or anything for that matter. There has never been a tax on inactivity.

Enter Obamacare. Obamacare provides for fines or penalties for certain individuals (“shared responsibility payment” or individual mandate) and employers (the employer mandate) who do not purchase health insurance.

The Supreme Court concluded that such fines or penalties were unconstitutional, however, that if they were to be considered a tax they were constitutional. So the Court recast them as a tax (despite the clear wording of the law) and concluded that the fines and penalties were really taxes and were, therefore, legal and constitutional.

See this related article: http://conginst.org/2012/08/07/inactivity-taxes-predictions-for-the-future/

This ruling opens the door for the introduction of new taxes upon various forms of inactivity to spur people to act in certain ways. There could be taxes on people who do not save a certain portion of their income or on couples for not having babies or on folks who fail to lose a certain amount of weight. There is no limit.

See this related article: http://adamrick.blogspot.com/2013/11/book-review-of-why-john-roberts-was.html

For all that are in favor of this law and ruling I say watch out. You have only seen the beginning of a whole new method for FedGov to tax you. Hopefully, Roberts will get it right this time because the issue is headed back to the Supreme Court.

And That’s that!