The Duck of Minerva

The Duck Quacks at Twilight

Credit and penalty

October 15, 2010

The Federal Government makes you pay a penalty if, among myriad other things, you: don’t have children, don’t get married, and don’t take out a mortgage. Of course, we don’t call these “penalties.” We call them “not getting a tax credit.” Yet some people think that reducing someone’s tax liability if they engage in a particular behavior is different than increasing someone’s tax liability if they don’t engage in that same behavior.

The same people also believe, for incomprehensible reasons, in the existence of a meaningful legal distinction between forcing U.S. citizens to pay the Federal Government money if they fail to purchase a product called a “mortgage” and forcing U.S. citizens to pay the Federal Government money if they fail to purchase one called “health insurance.”

Unfortunately, it seems that such irrational beliefs may also extend to a U.S. Federal judge:

“The individual mandate applies across the board,” Vinson wrote. “People have no choice and there is no way to avoid it. Those who fall under the individual mandate either comply with it, or they are penalized. It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive.”

As a social scientists, I can’t help but wonder what drives such obviously flawed reasoning. Is this an example of the psychology of loss aversion, the cognitive blinders created by partisan bias, or something else?

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Daniel H. Nexon is a Professor at Georgetown University, with a joint appointment in the Department of Government and the School of Foreign Service. His academic work focuses on international-relations theory, power politics, empires and hegemony, and international order. He has also written on the relationship between popular culture and world politics.