A project of the Galen Institute

Issue: "Taxes"

IRS Struggling to Figure Out Which Companies Owe This Obamacare Tax

Chris Butler
Watchdog.com
Fri, 2014-08-29
"Internal Revenue Service officials must enforce a new Obamacare tax designed to collect money from medical device manufacturers, but they’re losing money because they don’t know which companies even qualify for the tax, a new audit shows. On top of that, the IRS wrongly penalized more than 200 of these companies for not paying their taxes when, in fact, they did pay, the audit from the Treasury Inspector General for Tax Administration reports. Why doesn’t the IRS know whom to tax? Medical device manufacturers have to register their products with the Food and Drug Administration. But the FDA’s registration requirements for medical device manufacturers never quite matched that of the IRS."

Arizona Medicaid appeal to be heard by court

Mary Jo Pitzl, Arizona Republic
Thu, 2014-08-28
"PHOENIX — The Arizona Supreme Court has agreed to hear Gov. Jan Brewer's appeal of an appeals-court decision that could unravel the Medicaid expansion she fought for last year. The high court has not yet set a date, but indicated it will hear Brewer's argument that about three dozen Republican lawmakers don't have the legal standing to challenge the controversial vote. The court's decision, reached in a scheduling conference, comes on the heels of Tuesday's primary election in which every Republican lawmaker who voted to expand the state's Medicaid program won re-election. That means it would be highly unlikely the next Legislature would vote to reverse the 2013 decision, which was a consistent fault line in numerous GOP legislative primaries. The case revolves around whether the Legislature's 2013 vote to impose an assessment on hospitals to help cover the cost of expanding the Arizona Health Care Cost Containment program was a tax.

Report: Health Law Ups Taxes On Insurers With Big Pay Packages

Julie Appleby
Kaiser Health News
Wed, 2014-08-27
"While average compensation for top health insurance executives hit $5.4 million each last year, a little-noticed provision in the federal health law sharply reduced insurers’ ability to shield much of that pay from corporate taxes, says a report out today. As a result, insurers owed at least $72 million more to the U.S. Treasury last year, said the Institute for Policy Studies, a liberal think tank in Washington D.C. Researchers analyzed the compensation of 57 executives at the 10 largest publicly traded health plans, finding they earned a combined $300 million in 2013. Insurers were able to deduct 27 percent of that from their taxes as a business expense, estimates the report. Before the health law, 96 percent would have been deductible."

Tax refunds may get hit due to health law credits

Ricardo Alonso-Zaldivar, The Associated Press
Mon, 2014-08-25
"Taxes? Who wants to think about taxes around Labor Day? But if you count on your tax refund and you're one of the millions getting tax credits to help pay health insurance premiums under President Barack Obama's law, it's not too early. Here's why: If your income for 2014 is going to be higher than you estimated when you applied for health insurance, then complex connections between the health law and taxes can reduce or even eliminate your tax refund next year. Maybe you're collecting more commissions in an improving economy. Or your spouse got a better job. It could trigger an unwelcome surprise. The danger is that as your income grows, you don't qualify for as much of a tax credit.

Unemployed by ObamaCare

Fri, 2014-08-22
NOTE: This story is behind a pay wall. "Most of the political class seems to have decided that ObamaCare is working well enough, the opposition is fading, and the subsidies and regulation are settling in as the latest wing of the entitlement state. This flight from reality can't last forever, especially as the evidence continues to pile up that the law is harming the labor market. On Thursday the Federal Reserve Bank of Philadelphia reported the results of a special business survey on the Affordable Care Act and its influence on employment, compensation and benefits. Liberals claim ObamaCare is of little consequence to jobs, but the Philly Fed went to the source and asked employers qualitative questions about how they are responding in practice. The bank reports that 78.8% of businesses in the district have made no change to the number of workers they employ as the specific result of ObamaCare and 3% are hiring more. More troubling, 18.2% are cutting jobs and employees.

Kill the tax exclusion for health insurance

Thomas P. Miller
National Review
Thu, 2014-08-21
"Last Saturday, August 16, marked the 60th anniversary of the enactment of the Internal Revenue Code of 1954, which permanently established in federal law generous tax advantages for employer-paid health-insurance premiums. Those group health benefits are excluded from employees’ taxable wages and thereby are not subject to income and payroll taxes. This tax break has been praised as a pillar of our employer-based private health-insurance system, but its age is showing. A growing list of critics agrees that the tax exclusion needs to be changed. The key questions are when and how. We should expect a significant overhaul, but not a full retirement party, within the next five to ten years. The simplified history of the tax exclusion for health care usually begins with a 1942 ruling by the War Labor Board that allowed employers to bypass wartime wage controls by providing fringe benefits to workers.

How the IRS Is Botching Obamacare Tax Collection

Brianna Ehley, Fiscal Times
Wed, 2014-08-20
"he Internal Revenue Service is struggling to collect a new tax that’s critical to financing the president’s health care law – and auditors say the IRS’s flawed collecting process is allowing it to raise only three-quarters or so of the revenue that was originally expected.A new report from the Treasury Inspector General for Tax Administration (TIGTA) flags the enforcement of the medical device excise tax, one of a handful of new taxes imposed under the Affordable Care Act.Related: Obamacare’s Next Challenge: IRS VerificationThe Affordable Care Act’s excise tax – equal to 2.3 percent of the sales price of medical devices – took effect in January and is estimated to bring in about $20 billion through 2019, the Joint Committee on Taxation has said.Auditors say the IRS had originally estimated that the tax would bring in about $1.2 billion in the second and third quarters of 2013 – but it’s only received $913.4 million."

Consumers’ next Obamacare challenge: Tax forms

Paige Winfield Cunningham and Mackenzie Wienger, Politico
Tue, 2014-08-12
"If consumers thought logging on to HealthCare.gov was a headache, sorting through complex forms ahead of tax deadline day 2015 is their next big Obamacare challenge. The health care law’s benefits are rolling out, but its major math problems start next year as the IRS tries to ensure that millions of Americans are correctly calculating their benefits and that those who don’t have coverage are penalized unless they qualify for an exemption. That means much new paper-shuffling between now and April 15, which could be especially confusing for low- and middle-income Americans unaccustomed to lots of reporting to the IRS. The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return.

Consumers’ next Obamacare challenge: Tax forms

Paige Winfield Cunningham and Mackenzie Weigner, Politico
Mon, 2014-08-11
"If consumers thought logging on to HealthCare.gov was a headache, sorting through complex forms ahead of tax deadline day 2015 is their next big Obamacare challenge. The health care law’s benefits are rolling out, but its major math problems start next year as the IRS tries to ensure that millions of Americans are correctly calculating their benefits and that those who don’t have coverage are penalized unless they qualify for an exemption. That means much new paper-shuffling between now and April 15, which could be especially confusing for low- and middle-income Americans unaccustomed to lots of reporting to the IRS. The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return.

It Wasn’t a Tax Before It Was a Tax: Court Upholds Obamacare Individual Mandate

Elizabeth Slattery, The Heritage Foundation
Thu, 2014-07-31
"A three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacare’s individual mandate based on the origination clause of the Constitution. The Supreme Court held in NFIB v. Sebelius (2012) that Obamacare’s individual mandate was constitutional because it was a tax. The Constitution also says tax legislation must originate in the House. But the Obamacare individual mandate tax did not originate in the House. Senate Democrats took a House bill that provided tax credits to veterans purchasing new homes, gutted its language and “amended” it with the language that would become Obamacare. Todd Gaziano, one of the lawyers for Matt Sissel, likened this amendment to “the complete destruction of a house and the erection of a massive skyscraper on the same street address.” In a unanimous ruling in Tuesday’s case, Sissel v. U.S. Department of Health and Human Services, the D.C.

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