A project of the Galen Institute

Issue: "Taxes"

IRS Under Congressional Fire For Moving Resources To Support ACA Rollout

Inside Health Policy
Fri, 2015-04-24
The IRS shifted around substantial resources and manpower to implement the Affordable Care Act while its overall operations and taxpayer assistance suffered, according to a Republican staff report released by the House Ways and Means committee. The findings, released Wednesday (April 22), follow a stressful tax season for the Treasury Department, as it handled nearly 1 million people who received incorrect 1095-A forms that used the wrong data to calculate health insurance exchange enrollees’ subsidies due to a technological code glitch. Taxpayers were told they owed or were owed the wrong amount for their tax return; the IRS said those affected did not have to refile if they had already done so. “To date, the IRS has spent over $1.2 billion on implementation of the ACA,” the report says. “In fiscal year 2014, the IRS spent $386.6 million on the ACA, including $12.1 million from the taxpayer-services account and $185.7 million from its user-fee account.”
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Stephen Ohleacher IRS: 'Obamacare' caused us to hang up on 8 million taxpayers

Komo News
Thu, 2015-04-23
WASHINGTON (AP) - The IRS' overloaded phone system hung up on more than 8 million taxpayers this filing season as the agency cut millions of dollars from taxpayer services to help pay to enforce President Barack Obama's health law. For those who weren't disconnected, only 40 percent actually got through to a person. And many of those people had to wait on hold for more than 30 minutes, IRS Commissioner John Koskinen said Wednesday. The number of disconnected callers spiked just as taxpayers were being hit with new requirements under the health law. Last year, the phone system dropped 360,000 calls, Koskinen said. For the first time, taxpayers had to report whether they had health insurance last year on their tax returns. Those who received government subsidies had to respond whether they received the correct amount. People without insurance faced fines, collected by the IRS, if they did not qualify for an exemption.
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Susan Cornwell: Seeking Obamacare alternative, Republicans eye tax credits

Reuters
Mon, 2015-04-20
(Reuters) - If the U.S. Supreme Court blows up the tax subsidies at the heart of Obamacare in June, Republicans hope to deliver on their promise to offer an alternative healthcare plan. But key parts of it may resemble the one President Barack Obama delivered five years ago in the Affordable Care Act, partly reflecting Republican concerns that they could pay a political price if insurance subsidies are yanked from millions of Americans later this year. Two front-running Republican options at an early stage in Congress include a refundable tax credit that experts say is virtually the same thing as the Obamacare tax subsidy being challenged before the Supreme Court. Republicans deny that their ideas are tantamount to "Obamacare Lite" but acknowledge they will need bipartisan support for their plans to stand any chance of avoiding an Obama veto.
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Louise Radnofsky: Health-Care Law Trips Up Some at Tax Time

The Wall Street Journal
Wed, 2015-04-15
The tax filing season has uncovered lingering wrinkles in the 2010 health-care law that have caused headaches for consumers who incorrectly estimated their income, didn’t use a government exchange to buy an insurance plan or changed coverage during the year. Marta Chapman saw her anticipated $850 federal refund wiped out because she received too much in advance tax credits in 2014 to pay her insurance premiums under the Affordable Care Act. That prompted her to drop her plan for this year. “I canceled because I was very upset. To me it was kind of a trick,” said the 48-year-old personal-care aide in Aztec, N.M. “If I knew that, I wouldn’t have got the insurance.” Federal officials said they have been working hard to help people get used to the law’s system of financial help to pay health premiums, and will continue to try to make it easier for them.
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Jayne O'Donnell: Many unaware of required tax-time insurance reporting

USA Today
Wed, 2015-04-15
The special health insurance enrollment period set up for people surprised by their tax penalties hasn't appeared to increase either awareness or enrollment by much, new research shows. People who live in the 34 states that use HealthCare.gov and didn't know about the requirement to have health insurance can sign up through April 30 for 2015 coverage. But nearly half of people planning to file taxes said they had heard nothing or very little about the requirement to report whether they have insurance on their tax return, according to new research funded by the Robert Wood Johnson Foundation.. "Very few people are reacting to the news by insuring," said Kathy Hempstead, who directs insurance coverage issues at RWJF. "So far it doesn't seem we're seeing this mass teachable moment."
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Jason Devaney: Report: Obamacare Tax Regulations Costing Economy Billions

Newsmax
Wed, 2015-04-15
A new report shows that as the United States' tax system grows more complicated because of Obamacare regulations, the economy is taking more of a hit. According to data from the National Taxpayers Union Foundation (NTUF), complying with the federal income tax cost the economy about $234 billion in productivity last year. The group came to that figure by adding the out-of-pocket cost of tax preparation assistance ($31.7 billion) and the estimated cost of $202.1 billion due to lost labor hours Americans spent dealing with their 2013 tax returns that were filed in 2014. Special: IRS Loophole That Could Protect You From Economic Instability The economic hit was lower than the previous year by almost $10 billion, and the NTUF concludes that "was an anomaly." The increase to this year's figure, according to the NTUF, stems from the Affordable Care Act and the mountain of paperwork it has created at the IRS. "Looking deeper at NTUF's research, there is one big reas
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Grace-Marie Turner: Average Fine For Noncompliance With ObamaCare Is $1130, Expert Testifies

Forbes
Wed, 2015-04-15
As millions of Americans scramble to file their tax returns, many are shocked by the full cost of ObamaCare’s individual mandate. “Those who failed to obtain minimum essential health insurance coverage last year will have had to send the Internal Revenue Service (IRS) a check for $1,130, on average,” Doug Holtz-Eakin, former director of the Congressional Budget Office, testified today before a congressional hearing. An estimated 6.3 million people will be required to pay a penalty this year because they didn’t buy qualifying health insurance in 2014, Holtz-Eakin testified.
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Douglas Kellogg: It's Tax-plicated: Complexity Rising with Obamacare Burden

National Taxpayers Union Foundation
Wed, 2015-04-15
This year’s new analysis of tax complexity from National Taxpayers Union Foundation (NTUF) found some startling lead figures: a $234 billion cost to the economy due to 6.1 billion lost hours of productivity and $32 billion spent out-of-pocket to comply with America’s insanely complicated tax system. As always, there is much more to the story. Since 2010, tax complexity costs have remained sky-high, at well over $200 billion each year. From fiscal year 2005 to 2013, the Treasury's paperwork burden rose from 6.4 billion hours to 7 billion hours never making up less than 74 percent of the burden imposed by all government agencies combined. While last year’s (covering 2013) totals actually trended downward compared to the previous year (2012), there was little reason to believe that was the beginning of a trend toward continued relief.
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Alex Rendon: Obamacare’s $800 Billion Tax Hike Explained in One Chart

The Daily Signal
Tue, 2015-04-07
April 15 is right around the corner, and millions of Americans will find themselves paying more in taxes than ever thanks to Obamacare. The law is more than a fundamental change to the country’s health care system. It also is a massive tax hike. As The Heritage Foundation’s Federal Budget in Pictures shows, according to the most recent scores, Obamacare will increase taxes by nearly $800 billion for the period of 2013-2022. Obamacare contains 18 separate tax increases. A few of the biggest include a tax on “Cadillac” health insurance plans, which doesn’t take effect until 2018, long after President Obama and many in Congress who voted for the tax in 2010 have departed Washington. Also, there is a tax on health insurance premiums and a higher rate on the Hospital Insurance payroll tax for single filers with incomes above $200,000 ($250,000 for married filers) that also applies to investment income.
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Sarah Hurtubise: New York Legislature Turns Down Tax On Obamacare Policies

The Daily Caller
Wed, 2015-04-01
The New York legislature voted down Gov. Andrew Cuomo’s proposal to tax health insurance policies to fund the state’s Obamacare exchange, calling the fees system used by the Obama administration and other states counterintuitive. The shrinking number of state-run Obamacare exchanges are facing a new problem this year — how to fund their ongoing operations now that start-up grants from the federal government are running out. In New York, like many other states, Cuomo proposed a tax on health insurance premiums to fund the state-run exchange’s operations. That tactic comes with its own concerns: some states, such as Hawaii, have smaller-than-expected enrollment and the per-policy fees aren’t bringing in enough money. Rhode Island is considering adopting a tax itself, but due to small enrollment in the tiny state, fees per Obamacare enrollee would likely climb higher than $30 every month, according to Modern Healthcare.

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