Jen Kuznicki
This article talks about how the Supreme Court decision now leaves a conundrum for the State governments. Now that the Supreme Court has said that the Federal Government does not have the power to force States to expand Medicaid, it is up to the State governments to decide if they want to expand the program and face a substantial increase in their expenditures for years to come, or, put in exchanges funded 100% by the Federal Government.
All the while, Jen Taxpayer is thinking, “My taxes are going to go up, and nobody will speak for me.”
I’m screwed both ways here. It’s not a matter of whether my State will save money by doing one thing or the other. Both my State taxes AND my Federal taxes are going to go up. Substantially.
I am a State taxpayer, and a Federal taxpayer. We aren’t talking about different people, just one person footing two bills.
And then, in 3 1/2 years, I have to prove I have health insurance, and if experience has shown me anything at all, it will be about the same time the employer will dump my insurance.
So then I have to go buy insurance, to top it all off.
This is a purely practical reality, not a partisan complaint. There is no way out, this is my future. All I have now is to try to minimize my financial stake. In my fervor to do so, I noticed the author points this out:
Thus, if states neither expanded Medicaid nor set up exchanges, that would effectively block most of ObamaCare’s new entitlement spending.
I want that one, I pick that, write me down, I’m for it, where can I sign up, I’ll lead the march and print the petitions.
At the same time, if you don’t buy insurance, and you don’t really have to pay the fine, the Federal Government cannot force you:
The law, however, severely limits the ability of the IRS to collect the penalties. There are no civil or criminal penalties for refusing to pay it and the IRS cannot seize bank accounts or dock wages to collect it. No interest accumulates for unpaid penalties.
So how can the IRS enforce the mandate? Scary letters and threats to withhold tax refunds.
Ha! What tax refunds? After digging in my purse for loose change, and checking my dryer, the feds and the State won’t find any more money to take, there won’t be any stinking tax refunds.
If this nation’s governments were sane, they would automatically know what I must be thinking on this. But, instead of picking the door that says, “Less Government Intrusion,” they continuously demand more complicated methods to steal my children’s food.
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The second article says this:
"The IRS has not yet issued procedures for taxpayers to prove they have insurance. But IRS Commissioner Douglas Shulman, in a 2010 speech, said he envisioned a process similar to the one used by taxpayers to report interest or investment income.
Under this scenario, an insurance company would send the taxpayer and the IRS forms each year verifying that the taxpayer has qualified insurance. Taxpayers would file the forms with the IRS along with their returns, and the IRS would check them to make sure they match the information supplied by the insurance companies."
I really wish bloggers would stop propagating the notion that you can just not pay the fine/tax/penalty and there's nothing the IRS can do to you except maybe withhold your refund. Congress was able to remove the jail penalty from the bill because they didn't need it.
Having health insurance is a DEDUCTION that you can take on your tax return if you have a 1099HC form from your insurance company. There is an ID number on that form that you NEED to enter on your tax return in order to take the deduction. It's like having a 1098 form for the mortgage deduction. It's like having the Social Security Number of your kids so you can claim them as DEDUCTIONS.
For crying out loud. YOU CAN'T NOT PAY IT WITHOUT COMMITTING FRAUD ON YOUR TAX RETURN! That's what you'll go to jail for.
I'm sorry for the all caps but I've been commenting on this on blogs for two frigging years and nobody seems to get it. The only way to get around paying the extra tax is to lie on your tax return.
Here's a link that explains how it works in Massachusetts now:
http://www.massresources.org/schedule-hc.html
You have said that before. But if you don't have insurance, and you don't buy insurance, how are you committing fraud? They can't force you to buy insurance, but, according to the SCOTUS, they can tax you for not having it.
OK, keep in mind everything depends on how the feds do it versus how it's done in Massachusetts today. But you gotta assume they'll do it the same.
The key here is to forget the narrative. Like Andrew always said, the left sets the narrative and the right always falls for it.
It's not really a "mandate". They just call it that because they are forcing you to buy health insurance. But they're really not. They just want you to think that way. The government doesn't force anyone to buy a house and take out a mortgage, right? No. They just give us the "incentive" through the mortgage interest deduction. The government doesn't force you to have three kids instead of two, right? No. They just give you a tax break because it benefits society to have strong families.
That's how the mandate works on your tax return. It's a deduction you can take if you are entitled to take it. But in order for you to take it you have to have proof you are entitled to it. That's the 1099HC. The only way to claim the deduction if you don't have a valid 1099HC is to make up or steal the ID number. It would be like claiming a child who doesn't exist and entering a fraudulent Social Security Number.
That why they don't need the jail penalty.
But that is where I think you are going wrong, we can't assume they will do the same as Mass. because it is set up differently. They are mandating individuals, whereas, Mass. mandated business.
However, a tax break doesn't make people buy something. The Volt is a perfect example.
Massachusetts has an individual mandate and I described how it's treated on the state tax return for individuals.
I hope Romney gets in and keeps his word and that the Republicans manage to find the balls to repeal this nightmare bill. But people need to be prepared, and thinking you can just not pay the fine/penalty/tax and nothing will happen to you is nuts. You won't have any choice unless you're a math genius who figures out how to get your W4 withholding to add up to the exact amount of the tax you will owe without the increase in tax you will owe for not having a 1099HC. That's where they've got us.
I still don't understand how, if I don't have insurance, that I will get in trouble for tax fraud. I still dont see, because you keep describing what you do if you have insurance. I am pointing out that the people who don't have insurance would not be committing fraud by not taking the deduction because they don't have insurance, and refuse to buy it, incurring a tax penalty which, if not paid, cant be enforced. I'm not being contentious with you, I just don't get this point of yours.
It's all in the paperwork. I use Turbotax, so for me there is absolutely no way around it because the Turbotax software asks if I have a 1099HC and I enter it and the software does all the calculations.
But I've also done it manually on a paper return just to see if I could fake it. You can't because while it's like taking the mortgage interest deduction by using your 1098 data, where you subtract the amount from your income, the 1099HC simply excuses you from paying the penalty/ tax. In other words, if you have a 1099HC you just keep filling out your return and nothing gets added to the tax you owe. If you don't have a 1099HC you have to fill out a schedule called a Schedule HC which is a worksheet that determines how much more tax you owe because you don't have a 1099HC.
I'm not explaining this well, I know. Believe me, this drove me insane. It's the main reason I left Massachusetts. I HATED getting that 1099HC. Just the sight of it made me furious. The idea of it.
I live in Florida now. I used my pension and bought a house for cash and sold my old house at a loss. It cost me big bucks but was worth every penny.
ok, and here's the point, if I don't have a 1099HC, I get a Schedule HC, which may be less expensive to pay the penalty tax rather than get insurance, because I can't pay for insurance which pays for abortions, for instance. So, I go through, figure the tax, pay it, and continue to pay out of pocket for health care. I understand they don't allow that in Mass, which brings me to my other point that they can't force me to buy insurance but they can tax me for not buying, and can't enforce that tax because they don't have an enforcement in the law.
Now, if the tax deduction for having health insurance makes it possible for me to not pay anything out of pocket, the conscience factor of not paying for abortions outweighs any deduction (which just means my taxes will pay for the insurance that I'm getting the deduction for.)
Either way, I'm paying for this unless it's fully repealed.
Thanks for your insight.
Right.
After sitting out by the pool with my beer and cigarettes and thinking about it more, it actually would be possible to not pay it and maybe not commit fraud or perjury.
See, it really all depends on how motivated you are to get around it. It's a simple YES/NO question on your tax return. If you say yes, you then have to enter the tax ID number from your 1099HC and you're done. That's it.
If you say no, then you're supposed to go fill out the Schedule HC, figure out how much you owe, and then enter that amount back next to the NO box on your tax return. I guess I'm such a good little compliant obedient American it never occurred to me to just not do that. Just say NO and don't fill out the schedule.
But you couldn't use any tax preparation software or an accountant. You'd have to do it on paper manually and that's where I got stuck. I've been using Turbotax for more than 10 years now and I also E-file so the only way I could do it would be to commit fraud. That's what was hanging me up.
and another thing, let's say I have insurance through my employer, and they drop it in 2014. I would be faced with entering an exchange (if it's set up) or buy my own insurance, or go without. This new law mandates that I pay for abortions, against my conscience. So, I couldn't really buy insurance, without paying for them. So, I guess I'd have to go without, and then work around the law somehow as long as I could. Under these circumstances, how am I committing fraud?
The religious freedom argument is one I think will win at the Supreme Court. And hopefully Romney gets in and all this will be moot anyway.
You wanna really get your blood boiling? Here's how the so-called religious exemption works in Massachusetts:
The only way to claim the religious exemption is to certify that you did not pay for ANY medical care in the previous year, including vision and dental care. That's right. You can't even pay cash out of pocket. For anything even remotely considered "medicine". If you did, to still claim the exemption (or get the deduction without having a 1099HC) you have to go before a state board and they will decide if your circumstances warrant you getting the exemption from the mandate.
Nice, huh? The only religious group I can imagine ever getting a waiver under those circumstances are Muslims.
I've been speaking to several Europeans who expected America to develop a national health insurance program but now they are dumbfounded that what we have done is actively demand, by using a penalty, for Americans to buy the product. Even they do not do such. It is paid for via taxes on employment as a passive experience.
Lately we have lost our ability to be capitalists; now we seem to have lost our ability to be socialists even to the extent of copying how it is done by legions of forerunners. We have gone from capitalism to tyranny with nary an intermediary alternative step along the way. And this is just the beginning if I know anything about the way the government can tool 2700 plus pages of complicated law containing seemingly endless authority now granted to them by the Roberts' ruling.
Jen, I thought of your post when I read the following from Tom Lynch of The Thomas Moore Law Center in Bloomfield Hills.
Here it is, telling us what we have to do to avoid ObamaCare in Michigan. Enjoy and keep up the good work!!!
In as deft a decision as has been written in the last 20 years, he accomplished three major things.
The Supreme Court’s healthcare decision limits the promotion of federal power and future Democratic Congresses in two ways,
while also setting up an important national debate on tax policy.
First, because the Roberts decision was supported by the liberal members of the court, it stops dead what seemed to be
the march of the federal government to usurp the power reserved to the states under the 10th Amendment.
This march had used the Commerce Clause as its path of choice.
Because of this decision, that clause has finally been fenced in and is no longer a mutating force for federal expansion.
Second, the Roberts decision has given state governments — which are already running unique and effective programs to get healthcare delivered to their citizens — the chance to opt out of the incredibly onerous and expensive Medicaid directives included in ObamaCare.
The clear goal of ObamaCare was to have all control over the manner and direction of the delivery of Medicaid rest with a few self-anointed healthcare experts and community organizers in Washington.
At the same time, the healthcare law forced the states to pick up a huge amount of the costs these federal politicos deemed necessary to run Medicaid in a way that they deemed best for everyone.
It was the ultimate act of elitism, which is the operative engine for all things done by this administration. It told other people, and in this case entire state legislatures, what they must do to be socially responsible. And then it sent them the bill. This is also known as the “NPR good governance guidelines” — tell folks in the hinterland to stand back and let a few self-indulgent folks in Washington explain how they must live their lives.
The Roberts decision put a spike through this arrogance. States that do not want some 26-year-old Health and Human Services staffer in Washington running the lives of thousands of their citizens — and running taxes up on the rest — can opt out and will.
Third, the Roberts decision has made taxes the issue.
This is a fairly good outcome for most conservatives.
It is now clear the Obama administration and the Pelosi Congress passed the largest, and one of the most regressive, taxes in recent times. The “Democratic Mandate Tax” is aimed at, and will dramatically impact, small businesses and middle-income Americans.
The veil has been pulled back, revealing one of the primary intentions of ObamaCare. It seeks to massively expand the size of the federal government in the name of better healthcare. It also requires the expansion to be paid for by middle-income Americans and those who are brazen enough to try and make money running small businesses.
The dislike of markets and profit was always at the center of ObamaCare.
Its whole structure was built with the intent of forcing profit-based activity –
and the efficiencies that come with it — out of the healthcare delivery system.
It sought to replace it with a top-down, federally-dominated system that was single-payer in everything but name.
Now the debate can be more clearly and properly framed and pursued, especially by conservatives. It is really a question of who pays when the government decides to super-size itself as it does under ObamaCare.
It is obvious that the need for a massive increase in revenues to pay for the new “free” coverage under ObamaCare, and the cost of subsidy of the exchanges, will be staggering. We are on a fiscal course which, within a few years, will make borrowing to pay for this expansion extremely problematic.
Tax increases will really be the only option, and these tax increases will fall on everyone. But, as the Roberts decision makes clear, they fall first and disproportionately heavily on middle-income Americans and those in small businesses who are historically the job creators in our economy.
“More taxes, less jobs” is at least a more accurate slogan than “hope and change.”
yes, thanks Patriot Lady, but remember, the Robert's Ruling still expands legislative power through taxation.
What he did was deny Obamacare's mandate through the commerce clause, but allowed it through the legislature's taxing authority, although there is no taxing authority in the Constitution for inactivity.
In other words, what he did was ignore the Constitution to uphold Obamacare as well as define a new taxing authority not given in the Constitution. The legislature, through his ruling, now has the authority to tax us for inactivity (for not buying insurance.) This is why the ruling is a stake through the heart.