In an interview with ABC’s George Stephanopoulos in 2009, when the president was attempting to sell the law to the public, Obama was adamant that the penalty for failing to buy insurance was not a tax.
“I absolutely reject that notion,” Obama said under repeated questioning by Stephanopoulos. “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama said. “You can’t just make up that language and decide that that’s called a tax increase.”
Obama was desperate not to have the penalty termed a tax because if it were, it would clearly violate his pledge not to raise taxes on the middle class.
And yet after the law was signed, in a cynical slight of hand, Obama’s lawyers argued to the Supreme Court – and before it got there, in the lower courts – that the penalty in fact was a tax.
They did this because once the law was passed, the legal considerations trumped the political. Having the penalty qualify as a tax would make it immune to legal challenge, since Congress has an undisputed Constitutional right to tax.
And that’s exactly the argument that the Supreme Court accepted.