Rooted in Reason: Nurturing the Seeds of Liberty


Obamacare and Taxes by grassroothawaii
July 21, 2010, 8:52 am
Filed under: Uncategorized

I recently found this article in the Consumers for Health Care Choices Newsletter from the Heartland Institute. I think it’s worth taking a look at! Check it out:

Although the medical/business community is focused on how to implement ObamaCare, the likelihood of it being thrown out by the courts is growing dramatically. The latest evidence is that the administration has decided not to even defend the law on Commerce Clause grounds, but will argue instead that the mandate isn’t really a mandate at all, but merely a tax. The federal government certainly has authority to levy a tax and provide a program.

Well, yes it does. And if that was how the law had been written it would certainly pass judicial review. But, of course, if that was how it had been written it never would have passed in Congress.  Instead, it was written to require people to pay premiums to private entities.  The “tax” here is not merely the penalty paid to the IRS for failure to buy health insurance, but the requirement to pay premiums in the first place. Ergo, it is NOT a “tax.” Private companies are not allowed to collect taxes from citizens.

My advice to companies – do not throw away a lot of money learning how to comply with a law that will never survive a court challenge.

SOURCE:
One of the niftiest analyses is by Ken Blackwell and Ken Klukowski on the Huffington Post (of all places)

Heritage also has an analysis, but it is a little too willing to accept that this “tax” is legitimate for my tastes.

American Spectator


Meanwhile, the IRS will have its hands more than full trying to administer everything else this law requires, according to the Washington Post.  Some of this is just beginning to sink in to the minds of the public. In 2012, every business, including sole-proprietorships, will have to issue a 1099 to anyone from whom it buys $600 worth of goods or services. The IRS’ Tax Advocate Service says, “For example, if a self-employed individual makes numerous small purchases from an office supply store during a calendar year that total at least $600, the individual must issue a Form 1099 to the vendor and the IRS showing the exact amount of total purchases.”

When I try to explain this to business groups, they invariably reply, “No,  that can’t possibly be right. You mean if I buy $600 worth of paper from Wal-Mart in the course of a year I have to get their IRS number, the address of the corporate accounting office, send them a 1099 and another copy to the IRS?” Yep. That’s exactly what it means. “What does this have to do with health care? What is wrong with these people?”

I don’t know, but the Tax Advocate Service estimates that 40 million businesses will be affected. And no money was appropriated to cover the cost.

CNN Money reports that purchases made with debit and credit cards will not be subject to this new rule, because “a separate reporting requirement kicks in next year that will cover card transactions and help the IRS spot unreported payments made through those channels.” The article quotes Tom Henschke, president of SMC Business Councils as estimating only 10% of all transactions will be exempted, He says, “Most of the small businesses out there that do small business [purchasing] don’t do it by credit card. One of the reasons is the transaction cost is very high — 2% to 3%.”

SOURCE:
Washington Post
CNN Money

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