Taxes

Don't Forget: The Deadline for Payments to Offset Costs Is April 15

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Americans for Tax Reform notes that President Obama's health care plan continues to dance around the fact that he wants to tax Americans who fail to obtain the medical coverage he thinks they should have. The summary (PDF) of his plan calls the sum collected from uninsured Americans "a payment to offset the cost of care they will inevitably need." The White House also calls it an "assessment" and a "fee." But not a tax, since that description would acknowledge that the president is violating his campaign pledge not to raise "any form" of taxes on households earning less than $250,000 a year. 

By contrast, the health care bill (PDF) passed by the House calls this payment/assessment/fee "a tax on individuals without acceptable health care coverage." An early version (PDF) of the Senate bill called it an "excise tax on individuals without essential health benefits coverage." The T-word was expunged from the final version (PDF) of the Senate bill, the starting point for Obama's plan, in favor of penalty. But as ATR notes, the nature of this penalty is clear from the way it is imposed and collected:

Page 322 of the Senate bill (the "Patient Protection and Affordable Care Act") says that "any penalty imposed by this section with respect to any month shall be included with a taxpayer's return under Chapter 1 [of the Internal Revenue Code (IRC)] for the taxable year which includes such month."  The procedure to collect the tax on page 336 of the bill references Chapter 68 of the IRC. On page 337 of the bill, a new Chapter 48 is added to Subtitle D of the Code (Miscellaneous Excise Taxes) in order to create the uninsurance tax. Page 341 of the bill continues to reference various parts of the Code that need to be amended in order to cover this new tax.

Anyone reading this precise legislative language can see how this tax would be collected.  An uninsured individual would add the excise tax to their regular income tax burden on the 1040 Form every April.  It is much like other excise taxes collected on the 1040 (early IRA withdrawal tax, for example).

As a tax on living, the payment/assessment/fee/penalty would be an unprecedented (and unconstitutional) exercise of congressional power no matter what it was called. But Obama's word games reflect his general tendency to break promises while pretending he isn't.

The president also continues to offer a misleading rationale for the individual insurance mandate, saying it "helps everyone, both insured and uninsured, by reducing cost shifting, where people with insurance end up covering the inevitable health care costs of the uninsured." What he does not say is that it also facilitates cost shifting, forcing young and healthy Americans to subsidize insurance for older, sicker ones. Instead of making a moral argument for this policy, Obama conceals what he is proposing by saying the mandate allows "robust health insurance reforms that will curb insurance company abuses and increase the security and stability of health insurance for all Americans." Translation: By forcing people to buy health insurance they don't want, we can generate the revenue necessary to cover high-risk policyholders without charging them more.

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  1. I can’t wait to invest in America!

  2. NO way dude, who can forget April 15th! I mean like really! LOL

    Jess
    http://www.complete-anonymity.cz.tc

  3. When the government takes my money from me involuntarily, it’s a fucking tax.

    1. Actually…when they do it for a constitutional purpose then you’ve already agreed and it’s a tax. When they do it for an unconstitutional purpose, then it’s involuntary, and it’s just theft.

      1. I never signed a constitution.

      2. This word “agree”, I do not think it means what you think it means.

        1. Eco & Marc,

          You have freedom of movement. By choosing to live in the U.S., you agree to give certain powers to the government. These powers are enumerated in the constitution. One of these is the power of taxation. So yes, you’ve “agreed” to be taxed. You don’t have to sign it. Your agreement is implicit.

          Now, this particular plan is not constitutional so the “fee”, “tax”, “fine”, etc. is really just theft. The only reason they can do it is because they’re stronger than you are.

          Yes, it’s all theoretical but most of the stuff discussed here is theoretical.

      3. Thank you, junior, I stand corrected.

    2. Even when they take it inadvertently it’s a tax.

    3. The only way it could be constitutional is if it’s a tax. Then you just give a tax break to people who buy the insurance, and it’s just like any number of other subsidies in the tax code. A penalty/Fee/surcharge whatever imposed on persons NOT buying a product would be totally unprecedented and almost certainly totally unconstitutional.

      1. The senate bill is unconstiutional anyway. Revenue raising bills must originate in the house.

        Also, this is an income tax increase, not an excise tax.

  4. Americans for Tax Reform notes that President Obama’s health care plan continues to dance around the fact that he wants to tax Americans who fail to obtain the medical coverage he thinks they should have.

    Watch what you’re saying – the President knows hwat’s best for all of us. He is also the soon-to-be discoverer of a cure for cancer and the true Messiah . . . Hmm, hmm, hmm!

  5. He’s a soon-to-be ex-president. Just a few short years.

    1. Former President.

      1. No, no…..No, ‘e’s stunned!

      2. Ex-former president.

  6. I already sent my tax return. I received my refund from the Federal Government and I am waiting for my IOU from the State (yes, I live in Cal-ee-for-nya)

    1. So you’ll be getting your refund six months late, and then in lottery tickets?

      1. If I’m lucky . . .

  7. As a tax on living, the payment/assessment/fee/penalty would be an unprecedented (and unconstitutional) exercise of congressional power no matter what it was called. But Obama’s word games reflect his general tendency to break promises while pretending he isn’t.

    Even some team blue members aren’t buying that bullshit.

    STEPHANOPOULOS: I — I don’t think I’m making it up. Merriam Webster’s Dictionary: Tax — “a charge, usually of money, imposed by authority on persons or property for public purposes.”

    OBAMA: George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. Otherwise, you wouldn’t have gone to the dictionary to check on the definition. I mean what…

    1. Obama is so openly dishonest that he may lose even the apostles.

    2. I was getting ready to bring this up too, but I’m glad you linked it first. The most interesting thing about that ABC News page is the comments section. I normally expect people to generally go along with the president (and “authority” in general), but for the most part, the commenters weren’t buying it. I found it a rare bit of encouraging news.

    3. Wasn’t that like eight months ago?

      1. Yeah, but it’s still funny.

    4. Barack “Bill Clinton” Obama. Yeah, demanding to know what the definition of ‘is’ is. And we’re stretching by giving him the definition.

    5. Wasn’t that Olbermann freak shrilling about this weeks ago?

  8. This is the gamut of taxes everybody has to go through:

    The tax for daring to be productive.
    The tax for daring to be alive.
    The tax for daring to own a roof.
    The tax for daring to have a future.
    The tax for daring to trade what you own at a profit.
    The tax for daring to enjoy your life.
    The tax for darig to use your property.
    The tax for daring to give people employment.
    The tax for daring to give away your property to someone else besides the gunvermint.
    The tax for daring to save your money.

    [Guess what they are called by the gunvermint and the Statists who love gunvermint…)

    1. The obvious solution is a tax on legislating, payable by the sponsor(s), at $100/word/vote, with a $50000 fee for passing committee.

      1. I like the way you think, Brett.

        This notion could be expanded to include charges for time spent crafting the bill, rebates/penalties for repeal/amendment, etc.

        But I think at $100/word we’d see cryptic Deutsch-like legislation.

  9. it also facilitates cost shifting, forcing young and healthy Americans to subsidize insurance for older, sicker ones
    Is it any wonder he is losing the youth vote?

    1. And the bot vote. How the hell am I supposed to remain the anonymity bot if some kind of net neutrality law is passed? I’ll have to become the automatic-withdrawl-from-your-paycheck bot, bitches. Wow! LOL

      Jess
      http://www.complete-anonymity.cz.tc

      1. Bot Wars! I mean come on, can you believe this guy! LOL!

  10. a payment to offset the cost of care they will inevitably need

    what about smokers? isn’t that what the Master Settlement Agreement was for? don’t tell me those Attorneys General were bullshitting.

    1. Funny, cause we die younger, so some estimates indicate we cost LESS in the long run. If you’re dead, you don’t need health care…and we spend billions on the last few months of even those who never smoked so….

      Smoke ’em if you got ’em.

      1. …now life insurance premiums being higher for smokers I understand. But if we’re doing away with good underwriting and risk management practices for health insurance, hell, why not for life insurance, too!?

        Then, car insurance, flood insurance…er, wait…

  11. Denninger has noodled this one through and while he is simultaneously cynical and painfully naive, he has settled on a perfectly plausible explanation. The tax….and it is a tax….will be collected while a slew of lawsuits challenge the legality of the plan. The collected funds will be routed into other programs (Drudge already posted O’s plan to direct some to Social Security) to enable the charade to continue a bit longer and when the program is inevitably found to be illegal/unconstitutional they will be forced to stop collecting these funds prompting yet another crisis that will need to be remedied by yet more government. The can has been kicked down the can long enough for a few more election cycles and every short term neer do well in DC keeps drawing a paycheck in the interim. No “health care” is ever provided under the plan.

    What’s not to like?

  12. I say we support Obamacare, and then invest heavily in lube companies. We’ll be billionaires. Well, millionaires after healthcare penalties.

    1. When was the last time those fuckers used lube? You’re better off investing in the adult diaper business, since they’ll be needed to prevent spotting while the congress critters are recuperating for the next violation.

    2. I say we all take flying lessons.

      1. Ouch, too soon.

  13. I find the president’s statements are much more palatable if coupled with a laugh track.

  14. I’m only half-joking when I say the next big growth industry in a post-Obamacare America will be Mexican medical clinics, just across the border.

    1. I’m only half-joking when I say now you know the real reason for the border fence.

      1. Good fences make good prisoners.

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  16. Something to look at, Jeff.

    You might fine tune your business plan, though. Most of your patients are going to be paying cash, so they will probably be well off and would prefer their clinic in a nice resort.

  17. “” the uninsurance tax.””

    This kind of stuff is funny when it comes out of the taxman’s mouth in a Popeye cartoon. I think that’s where he’s getting his ideas.

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