May 12, 2006 10:44AM # They Don’t Call It Taxachusetts for Nothing By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE In the *Boston Herald*, I [wrote](https://www.cato.org/pub_display.php?pub_id=6380) that Gov. Mitt Romney’s new health reform law includes “not just \[an\] individual mandate but also some hefty tax increases.” Romney’s secretary of health and human services, Tim Murphy, responded with a letter to the *Herald* claiming that “the law includes no new taxes to accomplish its objectives.” Oh, really? - The individual mandate is itself a tax on Massachusetts residents. Their freedom to choose not to purchase health insurance has been replaced by a tax equal to half the price of a typical insurance policy. - The $295 per-employee levy on employers who do not offer coverage is another tax. - There is a mandate (i.e., a tax) on employers that they set up what is called a Section 125 plan. (This is necessary to participate in the “connector.”) - If an employer has an uninsured worker who runs up a huge hospital bill, the employer must pay a tax of up to 100% of hospital charges in excess of $50k. - The law includes a “slacker mandate” (another tax) that requires insurers to cover dependents up to the age of 25. That tax gets passed on to everyone through higher premiums. I have personally expressed to Murphy admiration about what the connector attempts to do. However, the connector tries to remedy a federal problem (the federal tax treatment of health insurance) at the state level. Massachusetts might as well try to [reform the FDA](http://www.fdareview.org/). Thus even the “good” part of this legislation is a costly distraction from [real health care reform](http://www.amazon.com/gp/product/1930865813/sr=8-1/qid=1147376371/ref=pd_bbs_1/002-9400933-4942424?%5Fencoding=UTF8). ##### Related Tags [Health Care](https://www.cato.org/health-care), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).