Tag: IRS

More Americans Going Galt

President Obama promised he would unite the world…and he’s right.

Representatives from all parts of the globe have bitterly complained about an awful piece of legislation, called the Foreign Account Tax Compliance Act (FATCA), that was enacted back in 2010.

Michael Ramirez/Investor's Business Daily(Michael Ramirez/Investors Business Daily)

They despise this unjust law because it extends the power of the IRS into the domestic affairs of other nations. That’s an understandable source of conflict, which should be easy to understand. Wouldn’t all of us get upset, after all, if the French government or Russian government wanted to impose their laws on things that take place within our borders?

But it’s not just foreign governments that are irked. The law is so bad that it is causing a big uptick in the number of Americans who are giving up their citizenship.

Here are some details from a Bloomberg report.

Americans renouncing U.S. citizenship surged sixfold in the second quarter from a year earlier… Expatriates giving up their nationality at U.S. embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, according to Federal Register figures published today. That brought the first-half total to 1,810 compared with 235 for the whole of 2008. The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.

I’m glad that the article mentions that American law is so out of whack with the rest of the world.

Harvard Health Policy Review on the IRS’s Illegal ObamaCare Taxes

In the just-released Spring 2013 issue of Harvard Health Policy Review, I have an article titled “ObamaCare: The Plot Thickens.” The article examines the IRS rule that purportedly implements ObamaCare’s tax credits, but actually violates that statute by taxing, borrowing, and spending hundreds of billions of dollars contrary to Congress’ explicit instructions. (The article is a less-technical version of my Health Matrix article (coauthored with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”) Here’s an excerpt:

In broad daylight, the Internal Revenue Service is attempting to tax, borrow, and spend [roughly] $800 billion—contrary to both the express language of the PPACA and congressional intent. Thus in addition to other abuses that have recently come to light, the IRS is attempting to tax millions of employers and individuals without congressional authorization…

In this still-unfolding narrative, the Obama administration’s actions are triply anti-democratic. First, the IRS is violating a direct constraint that popularly elected legislators placed on the executive branch. Second, it is violating that duly enacted statute for the purpose of denying popularly elected state officials the vetoes Congress gave them over certain provisions of the statute. And third, it is violating the statute because administration officials either cannot fathom or will not accept that Congress meant to do what it clearly did.

Obama administration officials continually emphasize that the PPACA is “the law of the land.” That remains to be seen, in more ways than one.

Obamacare: House Hearing on the IRS’s Illegal Taxing, Borrowing & Spending

As Jonathan Adler and I detail in our Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” the Obama administration is attempting to rescue Obamacare from oblivion by literally taxing, borrowing, and spending more than $700 billion without congressional authorization. In a recent letter to the editor of the Washington Post, I explain how these illegal taxes are already hurting workers. 

On July 25, chairmen of the House Ways & Means Committee, the House Committee on Oversight & Government Reform, and two Oversight subcommittees sent a letter to Treasury Secretary Jacob Lew demanding information related to the illegal tax-credit rule.

The House Oversight Subcommittee on Health Care has announced it will hold a hearing this Wednesday, July 31, on the IRS’s illegal tax-credit rule titled, “Oversight of IRS’s Legal Basis for Expanding ObamaCare’s Taxes and Subsidies.” Adler will testify alongside Oklahoma Attorney General Scott Pruitt and Missouri physician and small business owners Charles Willey, each of whom has filed suit to block the IRS’s illegal rule. 

Washington Post: Adding Insult to Obamacare’s Injury

On Sunday, The Washington Post published my letter to the editor:

The excellent July 24 front-page article “Health law’s unintended impact on part-timers” showed how President Obama’s health-care law is cutting part-time workers’ pay by forcing employers to limit these employees’ hours in order to avoid penalties. Yet the reality is even worse.

Obamacare does not authorize those penalties in states that leave the task of establishing a health insurance exchange to the federal government. That means most of the employers the article cited — the commonwealth of Virginia, various Texas employers, the Ohio-based White Castle burger chain, the city of Dearborn, Mich., and Utah’s Granite School District — don’t need to cut part-timers’ hours, because the federal government has no authority to penalize them.

Yet the Obama administration has decreed it will do so anyway, contrary to the clear language of federal law, proving that taxation without representation is not confined to the District.

Two lawsuits have been filed to stop this illegal action — one by the state of Oklahoma, another by employers and individual taxpayers in Kansas, Missouri, Tennessee, Texas, Virginia and West Virginia.

Even so, thousands of part-time workers are already losing wages because of a tax Congress did not authorize. As underemployed music professor Kevin Pace told The Post, “This isn’t right on any level.”

Michael F. Cannon, Washington

The writer is director of health policy studies at the Cato Institute.

On Wednesday, July 31, a House oversight subcommittee will be holding a hearing on the IRS’s illegal taxes, borrowing, and spending.

Aside From That, Mrs. Lincoln, How’s ObamaCare Implementation Going?

The Washington Post has published a remarkable exposé on the Obama administration’s foundering efforts to implement ObamaCare.

The article paints a picture of a White House that did not know what it was getting into, either in terms of public opposition or the technical challenges of implementation. It likens the task of getting young adults to buy ObamaCare’s health plans to getting young adults to vote, despite a glaring difference between those challenges. (Hint: one of them requires young adults to shell out hundreds of dollars per month.) But this exposé is most remarkable for not exposing two lawsuits that by far pose the greatest challenge to ObamaCare’s survival.

One indication that implementation is not going well is what the Post quotes ObamaCare’s supporters as saying:

“In 2011, there was this ‘we’re going to save the world’ mentality. In 2013, it focuses more on how do we deliver on the requirements of the law.”

“It’s pretty much a black box.”

“They tell us, ‘It’s freakishly on schedule.’ They use those exact words. But only the people who work in this can tell you if it’s actually running on time.”

“Advocates on the ground are really struggling with that group. They want to have a positive message but don’t know what to say.”

“We’re in an environment [now] where 40 percent are against it, 35 percent are for it and neither side knows what’s actually in it.”

“How hard does the insurance department or Medicaid department in a red state [that opposes the law] make it to implement this?”

“Everybody is having sleepless nights given the magnitude of the effort and the short amount of time.”

“It’s like building a bridge from both ends and hoping, in the end, they connect.”

“I read [the delay of the employer-mandate] as an admission that not all of the components of the [data] hub are working.”

“Some of the guidance from the federal government is still coming. That means we can’t get to our wishlist.”

As bad as these evaluations are, things are actually quite a bit worse.

For one thing, the HuffingtonPost/Pollster.com polling aggregator currently shows that 52.5 percent of Americans are against ObamaCare, compared to 40.5 percent are for it. That’s a 12-point gap, not a five-point gap. It’s also the largest gap that aggregator has ever measured.

For another, the Washington Post acknowledges that if young adults don’t sign up for ObamaCare’s over-priced insurance “the law will fail,” and acknowledges the difficulty of getting young adults to over-pay for insurance. But it still downplays that challenge:

When…asked in a recent survey whether a $210 premium was affordable, only 29 percent of likely marketplace enrollees said yes. [Marketers then told] participants that, with their tax credits, they would save “$1,908 a year compared to what you would pay on your own.”

All of a sudden, 48 percent of the participants thought that insurance was affordable. But 48 percent is still less than half.

That number will turn out to be even lower when young adults realize they’re still shelling out that $210 they already said they cannot afford.

But the Post neglects to mention the greatest threat to the law’s survival: those tax credits may not even be there in two-thirds of the country.

The attorney general of Oklahoma, and a group of small employers and individuals from various states, have each filed lawsuits challenging the Obama administration’s plans to issue those tax credits in the 34 states that have opted not to establish one of ObamaCare’s health insurance “exchanges” themselves. The statute quite clearly authorizes those credits (and related subsidies) only “through an Exchange established by the State.” Nowhere, and in no way, does federal law allow the administration to issue entitlements through the 34 state-based Exchanges established and operated by the federal government. Yet the White House is trying to spend an estimated $700 billion over 10 years in those states without congressional authorization.

Both the non-partisan Congressional Research Service and Harvard Law Review have acknowledged these lawsuits are credible. Plaintiffs in one of the suits have asked the court to block that illegal spending before it begins in 2014. Supporters of the law admit that if that happens, ObamaCare doesn’t just fail, it collapses.

So the question this supposed exposé really answers is: aside from that, Mrs. Lincoln, how’s ObamaCare implementation going?

Fourth Circuit’s Liberty Ruling Deals a Hidden Blow to Obamacare

Obamacare had a rough day in court yesterday. In Liberty University v. Lew, the Court of Appeals for the Fourth Circuit ruled against Liberty University’s challenge to various aspects of the law. One might think, as SCOTUSblog reported, this was a victory for the Obama administration. 

In the process, however, the Fourth Circuit undercut three arguments the administration hopes will derail two lawsuits that pose an even greater threat to Obamacare’s survival, Pruitt v. Sebelius and Halbig v. Sebelius

The plaintiffs in both Pruitt and Halbig claim, correctly, that Obamacare forbids the administration to issue the law’s “premium assistance tax credits” in the 34 states that have refused to establish a health insurance “exchange.” The Pruitt and Halbig plaintiffs further claim that the administration’s plans to issue those tax credits in those 34 states anyway, contrary to the statute, injures them in a number of ways. One of those injuries is that the illegal tax credits would subject the employer-plaintiffs to penalties under Obamacare’s employer mandate, from which they should be exempt. (The event that triggers penalties against an employer is when one of its workers receives a tax credit. If there are no tax credits, there can be no penalties. Therefore, under the statute, when those 34 states opted not to establish exchanges, they effectively exempted their employers from those penalties.)

The Obama administration has moved to dismiss Pruitt and Halbig on a number of grounds. First, it argues that those penalties are a tax, and the Anti-Injunction Act (AIA) prevents taxpayers from challenging the imposition of a tax before it is assessed. Second, the administration argues that the injuries claimed by the employer-plaintiffs are too speculative to establish standing. Third, shortly after announcing it would effectively repeal the employer penalties until 2015, the administration wrote the Liberty, Pruitt, and Halbig courts to argue that the delay should (at the very least) delay the courts’ consideration of those cases. In Liberty, the Fourth Circuit rejected all of those claims.

In discussing whether the “assessible payment” that the employer mandate imposes on non-compliant employers falls under the AIA, the court writes: