Tuesday, December 21, 2010

the health care mandate is unconstitutional, but the mortgage interest deduction is not?

In the news last week is the ruling by Virginia federal judge Henry Hudson that the individual mandate in the federal health care law is unconstitutional.  I understand the arguments about overreach of the "commerce clause" of the US Constitution. 

But how is a federal requirement mandating participation in the health insurance market different than the federal mortgage interest deduction?  As I understand it, the mandate says that if you don't buy health insurance from a private company, you pay a financial penalty and that's it.   This seems similar to the federal tax code regarding home ownership.  If you don't buy a house, you pay a tax penalty, right?  That is, if you DO buy a home with a mortgage, you get to deduct the interest from your tax bill.  If you DON'T buy a home with a mortgage (say, by continuing to rent an apartment) you don't get to deduct the interest from your tax bill.  The result is that the goverment is enforcing a financial penalty on those who refuse to buy a mortgage from a private company (or quasi-private company, I guess, in the case of FHA, Fannie Mae or Freddie Mac loans).

I haven't heard this issue addressed over the last week in all the commentary (though I recall it being discussed during the debate and negotiations before the federal law was passed.)

I need my lawyerly readers to explain this to me.

1 comment:

  1. Good point...and why isn't Medicare unconstitutional?