Excise tax in Senate health care bill violates Obama's tax pledge

Americans for Tax ReformOct 22 2009

Americans for Tax Reform noted today that the Senate health care bill (S. 1796) indeed uses the term "excise tax" to describe the excise tax levied on Americans who do not purchase health insurance. If signed into law, the tax would break President Barack Obama's "firm pledge" not to raise "any form" of taxes on families making less than $250,000 per year.

As seen on page 194 of the bill:

PART I -- INDIVIDUAL RESPONSIBILITY

SEC. 1301. EXCISE TAX ON INDIVIDUALS WITHOUT ESSENTIAL HEALTH BENEFITS COVERAGE

Pages 195-196 describe the following:

"IMPOSITION OF TAX"

"INCLUSION WITH INCOME TAX RETURN"

"LIABILITY FOR TAX"

"AMOUNT OF TAX"

The excise tax is just one of several taxes in the bill that violate Obama's tax pledge.

"Obama made a 'firm pledge' not to raise 'any form' of taxes on families making less than $250,000 per year," said Grover Norquist, president of Americans for Tax Reform. "The Senate health care bill has a series of tax increases that would break this promise. It's now time for Obama to tell the American people whether he lied his way into office or if he intends to govern as he campaigned."

On Sept. 20, during an appearance on ABC's This Week with George Stephanopoulos, Obama claimed that the excise tax in Senate Finance Committee Chairman Max Baucus's (D-Mont.) draft bill would not break his tax pledge and denied that it is in fact a tax, even after Stephanopoulos read him the dictionary definition:

STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that.

Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it's a tax increase?

OBAMA: I absolutely reject that notion. [Transcript]