A Tax Is a Tax Is a Tax

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Maybe it's far too early to gauge whether President Barack Obama's media blitz this Sunday was a success. But I don't think the President did enough to convince the naysayers on health insurance reform. What I saw on Sunday was a man who's trying to keep up with the fast pace of the campaign trail--when the people want him to just slow down and lead.

Furthermore, his decision to take a pop at the media was somewhat difficult to swallow, especially when he was lionized by those very agencies: ABC, NBC, CBS, CNN and Univision. And the President's refusal to appear on Fox News may have also been a mistake. After all, if Mr. Murdoch et al are responsible for promulgating a number of untruths, why not take off the gloves?

That being said, the gloves did come off. Well, to an extent.

In what was a long-overdue testy exchange for the President, ABC's George Stephanopoulos asked Obama whether requiring an individual mandate to buy health insurance equates to a tax hike.

Now President Obama wouldn't be the first individual to play fast and loose on the politics of taxes. Gordon Brown, during his tenure as Chancellor of the Exchequer, constantly stated that he would stick to New Labour's manifesto and not hike taxes. Instead, Brown opted to raise revenues through so-called "stealth taxes," a combination of hidden taxes disguised, often, as charges.

So is Obama right? Is it unreasonable to claim that a mandatory requirement to buy health insurance is a new tax?

According to Investor Words, a tax is: A fee charged ("levied") by a government on a product, income, or activity.

Any clearer?

Some will recall that the President was unequivocal during the campaign trail that he would not raise taxes on America's middle class. He may well believe that he is sticking to this promise by charging rather than taxing. But whether they are taxes or charges is irrelevant. By and large people don't like seeing a deduction from their pay check, especially with a sluggish economy and low inflation on earnings.

Thus, whatever you call it, the President could discover that a charge can also be taxing. Voters are likely to draw the same conclusion.

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