Today in Vir­ginia, U.S. Dis­trict Judge Henry E. Hud­son struck down the com­pul­sory insur­ance pro­vi­sion of the PPACA as uncon­sti­tu­tional. In par­tic­u­lar, he noted that the “tax” for non­com­pli­ance was explic­itly a penalty, accord­ing to the law as writ­ten, and thus is not actu­ally a tax. Instead, he con­cluded that it’s puni­tive, and thus com­pels a cit­i­zen to engage in pri­vate commerce.

The case will most likely go to the Supreme Court, where I’d expect the same result.

Based on this deci­sion, it seems to me that sim­ply rais­ing the base income tax, while offer­ing a deduc­tion or credit for hav­ing health insur­ance that meets a min­i­mum bar, would pass muster. In other words, sticks bad, car­rots good. But that, of course, would require new leg­is­la­tion, which seems unlikely to pass under any cir­cum­stances in the next two years.

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