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Economy Update: Healthcare Law, A New Tax Or Not?

by Newsteam Staff
July 5, 2012

A patient gets a check up at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012 (Jim Young/Courtesy Reuters). A patient gets a check up at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012 (Jim Young/Courtesy Reuters).

The national healthcare debate remains a campaign issue as candidates continue to discuss whether they agree with the Supreme Court’s ruling late last month that so-called individual mandate to buy insurance falls under the federal government’s taxing power.

Though a senior aide to presumptive GOP presidential nominee Mitt Romney said the mandate is not a “tax” but a “penalty,”Romney said Wednesday that while he agrees more with the courts dissenters (CBS), “that’s taken over by the fact that the majority of the court said it’s a tax, and therefore it is a tax.”

His latest statement puts him in line with the GOP leadership (Reuters), which plans to continue opposition to the 2010 law on the grounds that it is a new tax though the Obama administration has continued to insist it is not. Romney has repeatedly said he will repeal and replace the law if elected.

At a time when voters are focused almost entirely on U.S. economic conditions including stagnant unemployment, a debate also is ensuing on whether the law helps or hurt U.S. employers (TheStreet), particularly small business, and their efforts to compete globally.

As the Street’s Laurie Kulikowski notes: “While some argue the individual mandate will help draw down costs by spreading it across a broader base, many advocacy groups say the new rule will hurt entrepreneurs in the long run by adding more costs.”

For more on the candidates’ stances, check this issue tracker on The Candidates and the Economy.

Suggested Other Reading:

IN a guest post on the CFR blog Energy, Security, and Climate, Michael Wara, a law professor at Stanford University, looks at the potential environmental impact of the U.S. Supreme Court’s healthcare decision.

A recent study (PDF) by the Urban Institute, with independent analysis by MIT economist Jonathan Gruber, says the health insurance mandate will impact roughly 26 million Americans, or 8 percent of the population.

Contributing Editor Gayle S. Putrich and Senior Editor Toni Johnson

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