When is a tax increase not a tax increase..until it is a tax increase?  The answer: The healthcare legislation commonly known as Obamacare.

The video below is an exchange between former Clinton senior political advisor George Stephanopoulos and President Obama.  The interview took place September 2009 on the ABC show This Week. 

Throughout the exchange, particularly the last half of the video, President Obama repeatedly takes Stephanopoulos to task for asking why Obamacare’s  forcing Americans to purchase healthcare insurance (or pay a penalty) is not a tax. The President declares “for us to say that you’ve got to take responsibility to get health insurance is absolutely not a tax increase”.

As you can plainly see in the video, Mr. Obama is quite forceful in stating that dictionary definitions are beside the point, and that it is his critics who wrongly are claiming he is creating a new tax on citizens.  One reason the President was so forceful in his assertions regarding new healthcare taxes is because of his often spoken pledge not to raise taxes on Americans earning less than $250,000 a year.

In the wake of Obamcare passage in March 2010, officials from 14 states went to court trying to block the President’s healthcare legislation. They argue that requiring individuals to purchase healthcare insurance violates the Constitution.

However, this week the Obama Justice Department went to court and responded to state officials by saying that requiring people to carry insurance or pay a penalty is a “valid exercise of Congresses power to impose taxes”. The Justice Department said “Congress can use its taxing power even for purposes that would exceed its powers under other provisions of the Constitution because the Supreme Court has ruled that Congress can tax activities that it could not reach by using its power to regulate commerce”.

Congress wrote the healthcare legislation describing the levy on the uninsured as a penalty and not a tax.  However the Obama Justice Department cast that logic aside in court by saying “the statutory label does not matter.  The constitutionality of a tax law depends upon its practical operation, not the precise form of words used to describe it”.

So, when is a tax increase on the middle class not a tax increase?  Hmm, you tell me because I’m confused.  It reminds me of the old Groucho Marx quip “Are you going to believe me or what you see with your own eyes?”