In the wake of last week's Supreme Court ruling upholding the constitutionality of the Affordable Care Act,opponents of the ACA have seized on the Supreme Court's rationale to attack President Obama for imposing a huge new tax on the nation. (The Romney campaign has been a little confused in its response, because coming around to the view that the mandate is a tax would seem to suggest that the Massachusetts mandate was also a tax, something Romney has always denied.) But all of this reaction is funny in a way, because it's not as if the text of the ACA has changed. However the individual mandate worked when the ACA was passed, that is still how it works today. And whether you want to call whatever is imposed if an individual does not have insurance a penalty, or a tax, or a rose, that cost is going to be the same for people who choose to go without coverage as it was when the ACA was passed.
The only thing new is the Supreme Court's rationale for upholding the power of Congress to pass such a law. Any act of Congress can only be constitutional if it falls within one of Congress's designated powers. The Obama administration's lawyers argued, as any good lawyers would, in support of all possible grants of authority. The law was authorized under Congress's power to regulate commerce. It was also authorized under the necessary and proper clause. And it could also be allowed under Congress's power to tax. The Court could not agree on any of these rationales. Four justices opined that there is no possible basis in the text of the Constitution that allows Congress to require that people have health insurance, or charge them if they do not have insurance. And four justices said that Congress has the power under the commerce clause, or the taxing power. But one justice sided in part with both camps, and that is the controlling decision. Justice Roberts does not think that Congress had the power to enact this statute under the commerce clause, but he does think it is permissible under Congress's authority to tax. (To add some more confusion to the issue, remember that Chief Justice Roberts's opinion also holds that the law is NOT a tax for purposes of assuming jurisdiction over the case, but IS nevertheless a valid exercise of Congress's taxing power.)
Does that suddenly make the mandate a tax? It certainly makes the mandate permissible under the Constitution's grant of taxing authority. That means you can call it a tax if you want. But you could always call it a tax even before the Supreme Court ruled. You can still call it a penalty if you want also. In fact, you can call it whatever you want. What it is in fact is a legal obligation to obtain insurance if your employer does not already provide it for you. In some cases the government will subsidize the cost of that insurance, and in some cases you might have to buy insurance yourself. And if you choose not to buy insurance, the IRS will assess a payment due (which by the way the IRS will be limited in its ability to collect). That's what it is. That's what it always has been.
If you don't like it, explain why you think it is an admirable exercise of American principles of freedom that people who go without insurance should be able to freeload on the system that the rest of us have to pay for, and still get to use emergency room services when they get sick or injured, at tremendous cost to the rest of us, because that is our current system. And also explain how an insurance system can work if people are allowed to wait until they get sick or injured before they buy insurance (because that is what would happen if we require insurance companies to accept people with pre-existing conditions). Finally, explain to people that they don't have to pay this "tax" unless they choose to go without insurance (but the payment might still be cheaper than getting insurance, so maybe they shouldn't mind paying it). But don't just try to scare people with the word "tax." Because it's not a dirty word, and people should not be afraid of it.