The website TPM has an interesting story laying out the Democrats’ argument for why even though the Supreme Court ruled that Obamacare’s individual mandate was constitutional only as an exercise of taxing power, that doesn’t mean it is a tax:
The answer involves a nuanced distinction between the colloquial notion of a tax and a fine collected through the tax code for noncompliance with a law.
Both are constitutional under under Congress’s power to tax, but are different in nature. The fine for failing to purchase insurance is like a tax insofar as it’s collected by the Internal Revenue Service. But it’s no more a tax than a penalty on businesses who fail to file a required form in time. A primary purpose of taxes is to raise revenue. If the individual mandate functions as intended, everyone able to buy insurance would do so and there would be no revenue collected, the administration argues.
That is, to put it mildly, splitting hairs with a laser. The fact that the primary purpose of a tax is to raise revenue does not mean that if it somehow does not raise revenue it is not a tax. That would not be changed even under the theoretical possibility that everybody impacted by the mandate buys insurance and no revenue is collected – A scenario unlikely to happen in the real world.
Cigarettes, for example, are heavily taxed. You can avoid paying those taxes by not smoking them, but that doesn’t make them not taxed.
Nevertheless, as my colleague Joe Gehrke noted today, President Obama is already pushing this argument on the campaign trail, claiming it is a penalty only. So expect to hear it many more times between now and the election.