Saturday, April 7, 2012

Healthcare:  First the Mandate, Then All Tax Incentives

Martin Sullivan wrote in Tax Notes and on Tax.com Monday:
The only difference between the mandate and your common tax incentive is that Congress framed the incentive as a tax penalty instead of a tax break. I recognize there might be a legal difference between the two approaches that is beyond my comprehension. But the court, Congress, and the public should understand that economically the two approaches are exactly the same. Any tax penalty can easily be redesigned as a tax incentive. So, for example, a $1,000 tax penalty for not doing X could be replaced by a tax policy whereby all individuals' taxes are raised by $1,000 and then they are given a tax credit of $1,000 for doing X. ...

For more, see First the Mandate, Then All Tax Incentives by Catherine Rampell, April 2, 2012 at Economix.

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