Mandate. You keep using that word.

by Brian Martinez on March 31, 2010 @ 4:19 pm · 0 comments

But I’m not sure it means what the Democrats think it means:

The penalty [for not carrying insurance as required by the new health care bill] is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.

So the IRS might gaze at you sternly and maybe wag a finger or two, but there’s nothing they can do at this point to collect the non-compliance penalty. Megan McArdle lays out the possible consequences:

It would mean that in practice the mandate would only apply to people who get tax refunds; otherwise, just write the IRS a check for everything except the mandate. And since you don’t have to get a tax refund–you can have your employer change your withholding–anyone who doesn’t want to pay it, wouldn’t have to.
But it’s not clear that this is what’s actually going to happen. If the IRS can reorder the priority of the tax dollars they take from you, then they can simply put any funds towards the mandate first. That way, if you attempt to go without insurance and then pay the IRS everything except the mandate penalty, you’ll end up with a tax liability the exact size of the mandate penalty . . . for which they can now garnish your wages, put tax liens on your house, and otherwise do all the nasty stuff that they are authorized to do under Subtitle F.

Naturally I’m all for not providing government revenue agents with more authority to steal money from me, although I suspect that the enforcement problem will be fixed sooner than later (the personal responsibility clause itself doesn’t begin until 2014). But just imagine how much revenue the IRS would collect, if it could not threaten taxpayers with imprisonment. It might just be enough to cover the printing costs on Obama’s health care bill.

In the meantime, to paraphrase Captain Barbossa, consider this rule more like…a guideline.