Boom: #Obamacare architect upholds #Halbig decision

July 25, 2014
"Obamacare has arrived"

“The end of Obamacare?”

I normally use that graphic as a metaphor for the needlessly disruptive, even harmful effects the Affordable Care Act is having on the American health care system and the millions who rely on it. But the First Circuit Court of Appeals ruling in Halbig v. Burwell (formerly Halbig v. Sebelius) turned the ACA into its own flaming wreck by holding that purchasers of insurance on the federal exchange were ineligible for subsidies, meaning those buyers would be forced to pay the full cost of their new, needlessly more expensive O-care plans.

Oops.

Some background: When the writers of Obamacare were designing this anti-constitutional monstrosity of a law, it was decided that states would be able to set up their own exchanges, with the federal exchange serving as the “insurance mall” for those that didn’t. To encourage states to create exchanges, it was written into the bill that subsidies for insurance purchases would only be available to those who bought their policies via an exchange “established by the State.” The idea was that pressure from purchasers who wanted those subsidies would force even conservative governors and legislatures to “opt in” to the system.

Trouble was for Obamacare fans, it didn’t work out that way.

Only 14 states set up their own exchanges (and some of those have been such disasters that their states are switching to the federal marketplace). That meant that, under the law, insurance buyers in the federal marketplace would be paying full price for their policies. It also meant that the federal government could not collect the “Roberts tax” (penalties) for not buying insurance, since those taxes were triggered by the availability of subsidies. No subsidies, no tax revenues, which the government was relying on to fund those same federal subsidies. You can just imagine how that prospect thrilled the pols in D.C.:

panic button red

 

So the IRS, hearing its master’s voice, suddenly decided it had the power to declare that “established by the State” intended to include the federal exchange, and thus the subsidy money could keep flowing.

Enter Halbig  and its argument that, no, the law meant what it plainly said, and then the First Circuit’s agreement.

The reaction on the Left has been amusing, to say the least. Ranging from shrieks of “judicial activism!!” to whines of “it’s just a typo and you know very well that’s not what Congress intended, meanies!”, they want the full, en banc, First Circuit to reverse the ruling. And, if they don’t do it, then, by golly, it’s on to the Supreme Court, where John Roberts will rewrite the law for us! Or something.

That got an awful lot harder to imagine, though, after the Competitive Enterprise Institute last night uncovered video from 2012 in which Jonathan Gruber, one of the key architects of both Obamacare and the earlier Romneycare, point-blank admitted the plaintiffs in Halbig were right:

The key moment starts at minute 31. Here’s CEI’s transcription of the big reveal:

What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.

Per Michael Cannon, Gruber is off on one point, because the “Roberts taxes” are only triggered in states that create exchanges and thus get subsidies. But the core is that this destroys the government’s “congressional intent” argument, because we now have one of the designers saying the limitation of subsidies to state exchanges was the intent of Congress.

Where Obamacare defenders go from here (other than to a bar to drown their sorrows), I don’t know. They can’t give up, because the loss of the subsidies wrecks Obamacare. Can you imagine the reaction when customers on the federal exchange are told they have to pay full price, prices mandated by Obamacare, which was passed solely by Democrats?

I have no idea how the courts will handle this. Assuming the government asks for an en banc hearing, it’s possible the ruling in Halbig will be reversed, thus probably ending the matter, but I’d have to think less so after this revelation. And there is a contradictory ruling from the 4th Circuit, a situation that almost guarantees the Supreme Court would take the case in 2015.

As ST likes to say, stay tuned… popcorn.gif

RELATED: More from Reason. The Federalist on Michael Cannon’s revenge. Mr. Cannon himself points out how Halbig frees tens of millions from an illegal tax. Paula Bolyard reports how Mr. Gruber calls the plaintiff’s arguments in Halbig “nutty,” …er… but they’re his own ideas, too. Oops, again. By the way, did you know 91% of fake applicants for Obamacare can get subsidized coverage? Another reason to kill this thing and bury it under a crossroads at midnight with a stake through it.

UPDATE: This is amusing – four ways in which Obamacare defenders have desperately tried to spin Mr. Gruber’s “speak-o.”

(Crossposted at Sister Toldjah)


Six Astounding Examples of Left-Wing Hypocrisy

July 18, 2014

Phineas Fahrquar:

Remember, kiddies: It’s “do as I say, not as I do.”

Originally posted on International Liberty:

Last month, I nailed Bill and Hillary Clinton for their gross hypocrisy on the death tax.

But that’s just one example. Today, we’re going to experience a festival of statist hypocrisy. We have six different nauseating examples of political elitists wanting to subject ordinary people to bad policy while self-exempting themselves from similar burdens.

Our first three examples are from the world of taxation.

Here are some excerpts from a Washington Timesreport about a billionaire donor who is bankrolling candidates who support higher taxes, even though he structured his hedge fund in low-tax jurisdictions specifically to minimize the fiscal burdens of his clients.

Tom Steyer, the billionaire environmental activist who is spending $100 million to help elect Democrats this fall, is rallying support for energy taxes that could impact everyday Americans. But when he ran his own hedge fund, Mr. Steyer sought to help wealthy clients legally avoid paying…

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RIP Australia’s Carbon Tax

July 16, 2014

Phineas Fahrquar:

Just as the EPA is trying to force us into a de facto carbon tax, Australia comes to its senses and repeals former-PM Gillard’s monstrosity. Well done, Tony Abbott!

Originally posted on Watts Up With That?:

Carbontax_tombstoneUPDATE: at ~ 11:14AM local time in Australia, it was repealed!

From ABC: Legislation to scrap the carbon tax has passed the Federal Parliament in a major win for the Abbott Government.

After a lengthy debate, the Senate voted to get rid of the price on carbon, with 39 senators voting for and 32 voting against.

This was the Government’s third attempt to scrap the tax since the election – the first two were rejected by the Senate.

The Australian reports:

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Really? Lois Lerner thought of investigating Senator Grassley (R-IA)??

June 25, 2014
No way!!

No way!!

Real smart. Let a United States Senator find out you were planning a fishing expedition into his finances? Try it, and just see how fast the hammer gets dropped on you once he’s in the majority, again:

New emails reviewed by the House Ways and Means Committee in the IRS targeting investigation revealed something that might knock the probe up another notch: IRS manager Lois Lerner allegedly sought to have the circumstances surrounding a speaking invitation to Sen. Charles Grassley, a Republican from Iowa, referred for IRS examination.

“We have seen a lot of unbelievable things in this investigation, but the fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States Senator is shocking,” said Ways and Means Chairman Dave Camp (R-MI) in a written press release.

According to the Ways and Means Committee, and the email chain released today, Lerner and Sen. Grassley were invited to speak at the same event in Dec. of 2012, but their invitations got mixed up. When Lerner received Grassley’s invitation, she suggested to others in her office that the invitation should be referred for examination.

“Looks like they were inappropriately offering to pay for his wife,” Lerner said. “Perhaps we should refer to Exam?”

Lerner’s idea was dropped after another employee politely said (I’m paraphrasing) “Are you nuts??” Still this is another example of the arrogance that infects the bureaucracy, much of which seems to have forgotten who employs whom around here.

BTW, Grassley sits on the Finance, Budget, and Joint Taxation committees, all of which have jurisdiction over the IRS. He had no comment about this story, but I’m sure he will have plenty to say in early 2015.

RELATED: My blog-buddy is already on the case.


Obamacare penalties to slam low-income Americans

June 9, 2014
"Obamacare has arrived"

“Obamacare has arrived”

Wait. I thought the whole point of this rolling fiasco was to make insurance  affordable for the least among us. But, according to the Congressional Budget Office, roughly one million Americans will pay the fine tax whatever the heck Roberts decided it was. Via The Washington Free Beacon:

“All told, CBO and [the Joint Committee on Taxation] JCT estimate that about four million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf),” the report said. “An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.”

A chart accompanying the report revealed that 200,000 of those paying the penalty earn less than 100 percent of the poverty line. An additional 800,000 are considered low-income, earning between 100 and 199 percent of the poverty level.

The article then points out how Obama was originally against the individual mandate, because it would be unfair to the poor. During a 2008 debate with Hillary Clinton Lady Macbeth, he said:

“You can have a situation, which we are seeing right now in the state of Massachusetts, where people are being fined for not having purchased health care, but choose to accept the fine because they still can’t afford it even with the subsidies,” he said. “They are then worse off, they then have no health care and are paying a fine above and beyond that.”

Which is …erm… kind of what’s about to happen right now under your system, sir. Not to be picky, or anything.

Of course, this is one of those predictible outcomes, like Obamacare causing increased use of emergency rooms instead of decreased use, that critics on the right have been warning about for several years. When faced with two painful choices –buy insurance you can’t afford or pay a fine– the vast majority will choose the least painful option. This was how the system was designed.

It’s a pity the Democrats who wrote it and shoved it down the nation’s throat didn’t bother read and understand it before voting on it and causing so many poor people so much pain. A pity, but not my problem, because not a single Republican voted for this anti-constitutional monstrosity.

And we need to remind them of that in November.

(Crossposted at Sister Toldjah)


Income Inequality and Guilt-Ridden Leftists

June 6, 2014

Phineas Fahrquar:

In other words, “You have been successful, and for your sins you will be punished!” And then the policies they advocate create the inequality they purport to hate. Genius.

Originally posted on International Liberty:

Our leftist friends have decided that income inequality is a scourge that must be addressed.

That might be a noble goal if they were motivated by a desire to improve the lives of the less fortunate.

Based on their policy proposals, though, it appears that the main goal is to punish the so-called rich. And they’re so fixated on that objective, Margaret Thatcher pointed out, that they’re willing to make the poor worse off.

And what’s especially bizarre is that rich leftists are among the biggest cheerleaders for these policies. Heck, I’ve even debated some of these limousine liberals, as you can see here and here.

But maybe their feelings of self-loathing and guilt are justified. After all, it seems that statist policies are actually associated with higher degrees of income inequality.

Let’s see what Steve Moore and Rich Vedder discovered when they looked at evidence…

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The IRS wants to tax your frequent flyer miles and hotel points

May 27, 2014

taxes IRS shakedown

It’s as if the agency was worried it wasn’t hated enough.

Writing at Reason, Ira Stoll reports that the Internal Revenue Service is looking at taxing rewards points offered by airlines and hotel chains:

Just in time for your summer vacation, the IRS is getting ready to toughen the tax treatment on frequent flyer miles and hotel loyalty reward programs.

The IRS announced in 2002 that it wouldn’t try to go after individuals for income taxes on frequent flyer miles or hotel loyalty points earned on company-paid business trips. Yet the temptation to wring some tax revenue out of the vast non-dollar economy of Starwood Preferred Guest Starpoints, Marriott Rewards points, American Airlines AAdvantage miles, Delta Skymiles, and so on is apparently so great that that the government just cannot resist.

Sure enough, the Tax Foundation, a research group that tracks tax issues, flags a recent post on the View From the Wing blog that runs under the provocative headline, “The IRS Looks To Be on the Verge of Imposing a Big Tax Burden on Loyalty Points.”

The IRS’s plans are vague, but they have airlines and hotel owners concerned enough about the issue that they reportedly sent a letter to Treasury Secretary Jacob Lew. “The IRS’ proposal to alter the tax treatment of loyalty programs will impose a significant new tax on existing and future loyalty points that travel customers enjoy and rely upon,” said the letter, according to a report in Politico. “Any change or clarification of loyalty program accounting should be made through the legislative process, not IRS promulgation.”

Frequent flyer mile fanatics got a wake-up call on the issue back in 2012 when Citibank sent IRS Forms 1099, documenting “miscellaneous income,” at a rate of 2.5 cents a mile, to customers who had signed up for an American Airlines-branded credit card and gotten 40,000 AAdvantage miles as a bonus. It was an unpleasant surprise to cardholders who thought they were getting a free trip, not an unwanted extra tax bill.

I’ll say. I rarely rack up enough points for a free flight or hotel night, but I know plenty of people who fly a lot and who rely on those points to help cover the occasional vacation. Suddenly taxing them not only diminishes their value as a customer-retention tool, but also burdens the consumer by imposing a monetary cost for a non-monetary reward. (Sure, the points have “value,” but it’s not like real income. Just try paying for a meal with airline points…)

Stoll covers several problems with this plan, but I’ll add one of my own: this is another example of the gradual bureaucratic usurpation of legislative power that’s grown to be such a problem since the Progressive Era. Congress writes laws that allow regulatory agencies to create rules for their implementation, but agencies, like bureaucracies everywhere, constantly push the bounds of that authority to accumulate ever-greater power to themselves, to the point whereat they’re no longer writing rules, but actually making law in place of the elected legislature. Which, for progressive ideology, is a feature, not a bug. (1)

Although, perhaps “usurpation” is too strong a word. After all, congresses dominated by both Democrats and Republicans have gone along with this, even if they didn’t agree with progressive ideology, passing vague legislation and letting agencies “fill in the blanks.” It’s a tempting bit of laziness: as Washington accumulated more power to itself, Congress had to deal with more and more, until it became expedient to let someone else deal with the details. And it gives them political cover: It wasn’t your congressman who decided to tax your airline miles, it was the IRS. Left unsaid is how generations of congressmen and senators have enabled this.

Of the many reforms our government needs, congress reclaiming its power to make laws and reining in the bureaucracy –especially the IRS!– is high on the list.

Footnote:
(1) The basic idea is that democratically-elected legislatures are too prone to public passions, too full of unqualified people, to be trusted with governance. Progressives prefer unelected, dispassionate boards of technocrats who would practice scientific management of public affairs. They may be right about the problems of legislatures, but I think the last century has shown their solution is even worse.

(Crossposted at Sister Toldjah)


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