Charles Gaba makes an interesting point about today’s Halbig decision: if upheld, it would amount to a tax increase. Everyone who buys insurance through a federal exchange would lose the tax credits they’re currently entitled to, and losing tax credits is the same as a tax increase. This in turn means that if Democrats introduce a bill to fix the language in Obamacare to keep the tax credits in place, it will basically be a tax cut.
This leaves Republicans in a tough spot, doesn’t it? Taken as a whole, Obamacare represents a tax increase, which makes it easy for Republicans to oppose it. But if the Halbig challenge is upheld, all the major Obamacare taxes are unaffected. They stay in force no matter what. The only thing that’s affected is the tax credits. Thus, an amendment to reinstate the credits is a net tax cut by the rules that Grover Norquist laid out long ago. And no Republican is allowed to vote against a net tax cut.
I’m curious what Norquist has to say about this. Not because I think he’d agree that Republicans have to vote to restore the tax credits. He wouldn’t. He’s a smart guy, and he’d invent some kind of loophole for everyone to shimmy through. Mainly, I just want to know what loophole he’d come up with. I’m always impressed with the kind of sophistries guys like him are able to spin. It’s usually very educational.