LATEST: Senate Clears Key Procedural Vote on Trump Reconciliation Bill Outright
Here's What Senate Dems Plan to Do to Gum Up the Works for...
Here's One Issue Causing the Senate GOP to Shoot Inside the Ship
Well, We Knew This GOP Senator Was Going to Screw Us
How Could Anyone Support These People?
The Dog That Never Barked
A Quick Bible Study Vol. 274: ‘Psalm Summer 2025’ Begins with Three of...
An Avalanche of Congressional Investigations Need to be Initiated or Intensified
Trump Explodes on Tillis Ahead of BBB Vote, Vows to Back Primary Challenger...
JD Vance Arrives at Senate to Potentially Cast Tie-Breaking Vote on Trump's BBB
Sabotage? Schumer Drags Out Trump’s BBB With All-Night Stunt to Delay GOP Victory
DHS Raids Los Angeles Home Tied to Iranian Smuggling Ring; Terror Watchlist Suspects...
Senate Gears Up to Vote on Trump’s ‘Big Beautiful Bill’
UPDATE: Sen. Lee Drops Proposal to Sell Off Federal Land after GOP Lawmakers...
Far-Left Comedian Blames Trump for Her Overeating, Alcohol Abuse, and Depression
OPINION

Illegal IRS Rule to Increase Taxes & Spending under Obamacare

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

The written testimony that Jonathan Adler and I submitted for the House Oversight Committee hearing on the Internal Revenue Service’s unlawful attempt to increase taxes and spending under Obamacare is now online. An excerpt:

Advertisement

Contrary to the clear language of the statute and congressional intent, this [IRS] rule issues tax credits in health insurance “exchanges” established by the federal government. It thus triggers a $2,000-per-employee tax on employers and appropriates billions of dollars to private health insurance companies in states with a federal Exchange, also contrary to the clear language of the statute and congressional intent. Since those illegal expenditures will exceed the revenues raised by the illegal tax on employers, this rule also increases the federal deficit by potentially hundreds of billions of dollars, again contrary to the clear language of the statute and congressional intent.



The rule is therefore illegal. It lacks any statutory authority. It is contrary to both the clear language of the PPACA and congressional intent. It cannot be justified on other legal grounds.

On balance, this rule is a large net tax increase. For every $2 of unauthorized tax reduction, it imposes $1 of unauthorized taxes on employers, and commits taxpayers to pay for $8 of unauthorized subsidies to private insurance companies. Because this rule imposes an illegal tax on employers and obligates taxpayers to pay for illegal appropriations, it is quite literally taxation without representation.

Three remedies exist. The IRS should rescind this rule before it takes effect in 2014. Alternatively, Congress and the president could stop it with a resolution of disapproval under the Congressional Review Act. Finally, since this rule imposes an illegal tax on employers in states that opt not to create a health insurance “exchange,” those employers and possibly those states could file suit to block this rule in federal court.

Requiring the IRS to operate within its statutory authority will not increase health insurance costs by a single penny. It will merely prevent the IRS from unlawfully shifting those costs to taxpayers.

Advertisement

Related: here is the video of my opening statement, and Adler’s and my forthcoming Health Matrix article, “Taxation without Representation: the Illegal IRS Rule to Expand Tax Credits under the PPACA.”

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos

Advertisement
Advertisement
Advertisement