re: #515 NJDhockeyfan

I’d say it’s a tax, primarily for the reasons explained in the majority opinion, plus the fact that the IM provisions are found in the tax code at 26 USC 5000A.

It’s a semantics thing to try and claim it is or isn’t a tax.

A good guide on whether something is a tax or a fee or a penalty is that a tax’s express purpose is to raise revenue, while a fee is supposed to cover the operating costs of a particular program. It gets fuzzy once legislatures begin using fees for the purpose of raising revenue (because calling something a tax is a surefire way to get it blocked).

Penalties are just what they sound like - if you do something that the law deems wrong, a penalty is imposed. Penalties can act as taxes, adding to the complexity of the whole thing.

For instance, let’s take taxes on tobacco products. It’s a tax because the purpose is to raise revenue. It could also be seen as a penalty to those who smoke because nonsmokers don’t have to pay that tax.