WHAT’S IN A WORD: Is a parking ticket a tax?

FRIDAY, JUNE 29, 2012

Ladies and gents, shall we parse: We had to laugh at one part of today’s New York Times editorial.

The Times was looking for the best way to praise Chief Justice Roberts. In a wonderfully amusing way, this is what they said:

NEW YORK TIMES EDITORIAL (6/29/12): When Congress was struggling to pass the health care bill, lawmakers refused to use the word tax to describe the proposed penalties on those who did not obtain insurance. Instead, they used the words “mandate” and “penalty.”

The Obama administration went along with this purely political pretense but made a cogent argument to the Supreme Court that the taxing power was a strong ground for the law, and it sensibly carried the day.

We’re not joking—that’s what they said! Shall we parse?

According to the editors, lawmakers used the word “penalty” to describe the law’s proposed penalties! That would seem like a fairly obvious choice of words.

But so what! In the next paragraph, the editors describe this choice of words as a “purely political pretense!” Calling penalties by their name turned out to be a pretense!

Only in the Times! Somewhat funnily, the letters page includes a letter which pretty much called this shot:

LETTER TO THE NEW YORK TIMES (6/29/12): Chief Justice John G. Roberts Jr.’s legerdemain in finding what Congress clearly intended to be a civil penalty to be a tax seems the opposite of the old saw that if it looks like a duck and quacks like a duck, it must be a duck.

Good grief, what an act of judicial activism—one that I suspect the left will applaud.

The letter-writer, from Draper, Utah, had that last part right.

Having said that, is a penalty a tax? We’ll ask that question in the form of a different question:

Is a parking ticket a tax?

Most people think of a parking ticket as imposing a fine. Few people would think of that fine as being a “tax.” In part, that’s because you pay the fine by sending a check to the city government.

You don’t pay the fine for a parking ticket when you file your taxes, although in theory the payment of tickets could be handled that way.

Many other types of payment are handled through tax filings. This may disguise the nature of such transactions. One prime example:

A so-called mortgage deduction is really a government subsidy. Each month, the federal government helps the homeowner pay his monthly nut.

This transaction would look like a subsidy if the government simply sent a check to the homeowner every month. But the transaction isn’t handled that way. Instead, the transaction is handled through the homeowner’s annual filing of taxes.

For that reason, this subsidy comes to be seen as a “tax deduction.” The homeowner ends up saying that he’s been allowed to “keep more of his money.”

In one sense, that's true, of course; the homeowner did keep more of his money. But in essence, the federal government sent him a check. It just chose a genteel way to do it.

Parking tickets aren’t thought of as “taxes.” Neither are the penalties you may have to pay if you let your car registration lapse. These payments are referred to as penalties or fines. They are rarely thought to be “taxes.”

That said, should the penalty in the health care act be thought of as a tax?

Folk can judge that as they wish. Fines and taxes bear a bit of a family resemblance; in each case, a citizen is required to give the government some of his money. In this case, there may be some basis in technical legal reasoning behind the Roberts approach. The relevant passage in his decision is excerpted in today's Times.

But however you scan it, we did enjoy that clumsy attempt to shower praise on Roberts’ head. Only in the New York Times do you get that kind of amusement!

Let's review: Lawmakers used the word “penalty” when they referred to a law’s proposed penalties!

That was a scam, the Times quickly said! Where else do you get this much fun?