Just as one pays a penalty if payment of income taxes is "late," the health insurance mandate imposes a penalty for not purchasing insurance. The penalties in both cases are fairly modest, relative to the amounts on which they're based.

In the case of the income tax penalties, they amount to an "agreed upon rate of interest on an amount owed," and are sufficiently reasonable that even a poor pauper like myself may occasionally find it "convenient" to withhold the tax, or part of it, pending a thorough review of the return to be filed, when there's a question as to the amount of tax owed. If you file for a delay in filing a return, and don't pay the tax, or don't pay all that is eventually due, you pay interest for the time by which the payment is delayed. There may also be a "penalty" fee, in addition to the interest, but the penalties - in the absence of proven criminal intent - are reasonable enough for the decisions to be made according to ordinary "business rationale."

And the interest rate is generally less than if you borrowed from the bank (or a credit card) in order to pay "on time."

The penalties applied to the uninsured under the health insurance act are generally substantially less than most people would pay to purchase insurance at prevailing rates, making it an OPTION for those who have difficulty with buying an insurance policy to bear the risk of an uninsured illness, and pay a lesser amount. They then are liable for any uninsured medical expense, but pay a lesser fee in lieu of insurance by assuming that risk.

In both cases, it seems like as fair a system as any bunch of politicians is likely to be able to come up with.

The penalties (and possible interest) are obviously NOT A TAX according to the conventions applied to any number of other "taxes," for the fees and penalties applied to settlements of them when the person responsible elects to deviate from the schedule.

The two cases here are just the most convenient examples - for now. There are many other similar precedents.

John