Taxes

Obama administration creates yet another Obamacare “hardship exemption”

individual mandate

The Department of Health and Human Services has delayed Obamacare’s individual mandate by a month, creating yet another new “hardship exemption” that pushes the deadline for Americans to purchase health insurance coverage back to May 1 from March 31:

People who obtained health plans off the marketplaces after March 31 will not automatically face a penalty under the individual mandate, the Obama administration said Friday.

In a bulletin, the Centers for Medicare and Medicaid Services (CMS) created a temporary hardship exemption for people who purchased coverage that was effective on Thursday of this week or beforehand.

The move essentially nullifies the month of April for the purposes of enforcing the mandate.
[…]
The CMS reasoned Friday that people seeking health plans outside the exchanges are “similarly situated” to people inside the system and might have been confused by the shifting deadlines.

This is the second time the administration has delayed the effective day of the individual mandate, the most controversial, most unpopular provision of Obamacare. The first delay was moving the deadline to avoid the individual mandate tax from February 15 to March 31, which brought it in line with the end of the open enrollment period.

Senate Democrat to IRS commissioner: “No taxes, no bonuses”

Responding to an internal watchdog report finding the IRS gave bonuses to workers who haven’t paid their taxes, Sen. Joe Manchin (D-WV) fired off a letter to Commissioner John Koskinen demanding that the agency take immediate action to rescind the bonuses.

“I am appalled by the findings outlined in the Treasury Inspector General for Tax Administration’s recent report that exposes millions of dollars in bonuses and awards paid to Internal Revenue Service employees with conduct issues and federal tax compliance problems,” Manchin wrote to Koskinen. “This is completely unacceptable and must be remedied immediately.”

The TITGA report found that bonuses totaling $2.8 million were IRS employees with disciplinary issues between 2011 and 2012. This includes more than $1 million to workers with outstanding tax issues.

Koskinen was only recently appointed to serve as IRS commissioner. The bonuses came under Douglas Shulman, who served as the agency’s commissioner from March 2008 to November 2012. It was also on Shulman’s watch when the agency targeted conservative groups.

“The faith of the American people in the integrity of their government is corroded every time gross negligence and indecency of this sort comes to light,” said Manchin. “How can we expect the American people—many of whom are struggling to make ends meet—to trust their government when they learn that the very agency charged with collecting their tax dollars is rewarding employees who haven’t paid theirs?”

IRS gave bonuses to employees who didn’t pay taxes

You can’t form a group with other concerned conservative activists without scrutiny from the Internal Revenue Service, but you can, apparently, work for the powerful tax agency and still receive a bonus, even if you haven’t paid your taxes:

The Internal Revenue Service handed out $2.8 million in bonuses to employees with disciplinary issues — including more than $1 million to employees who didn’t pay their federal taxes, a watchdog report says.

he report by the Treasury Inspector General for Tax Administration said 1,146 IRS employees received bonuses within a year of substantiated federal tax compliance problems.

The bonuses weren’t just monetary. Employees with tax problems received a total of 10,582 hours of paid time off — valued at about $250,000 — and 69 received permanent raises through a step increase, the report said. The report looked at bonuses in 2011 and 2012.

Employees’ tax problems included “willful understatement of tax liabilities over multiple tax years, late payment of tax liabilities, and underreporting of income,” the report said.

The IRS doesn’t take noncompliance into consideration when awarding bonuses. Because the law doesn’t matter when you’re the ones in enforcing it. Or something.

Anyone who have ever owed the IRS money or been subjected to an audit knows how much of a pain in the ass it can be. It’s not like the IRS cuts taxpayers any slack when it comes to collecting the revenue it says you owe to the Treasury.

House Democrat speaks candidly about “unpalatable” parts of Obamacare, predicts losses for his party

Stephen Lynch

In an interview law week with the Boston Herald, Rep. Stephen Lynch (D-MA) admitted that parts of Obamacare were “postponed” by the administration “because they are unpalatable,” pointing to the individual mandate and tax penalties for noncompliance.

The Massachusetts Democrat, however, hinted the backlash over the law may not be limited to the more unsavory aspects that the administration has managed to shrug off through unilateral delays. He warns that other provisions of the law could create a political firestorm.

“It’s going to hit the fan, because any individual with an individual healthcare plan that exceeds $10,200 is in a Cadillac plan situation,” said Lynch. “[T]hat employer, if they provide that, and many do today, nevermind in 2018, will have to pay a 40 percent tax on the amount over the maximum established under the Affordable Care Act.”

Colorado may charge insurers a fee to run Obamacare exchange

Of course, as is the case with most regulations and taxes, the fee Colorado officials are reportedly considering to pay for the state’s Obamacare exchange will be passed by health insurance companies to consumers:

A $13 million fee on all Coloradans with health insurance would pay half the operating costs at the state health exchange next year and in 2016 under the newest financial projections.

The proposed fee would affect at least 875,000 people and includes Coloradans who get their insurance through their employers or outside the exchange.
[…]
Exchange managers announced earlier this week that they sold private health plans to 124,000 people through the end of March. People who buy through the exchange will get hit with two fees. They are currently paying a user fee of 1.4 percent and that fee is projected to rise as high as 3 percent by 2017. On top of the user fees, people who buy through the exchange will also pay the fee that exchange managers are calling a “general market health insurer assessment.”

CBO sees a bigger river of red ink under Obama’s budget

The Congressional Budget Office (CBO) projects that budget deficits will be nearly $1.7 trillion greater under President Barack Obama’s budget than the estimates released last month by the White House Office of Management and Budget (OMB).

The two agencies frequently conflict on budget projections. The OMB sort of takes a guess on what economic growth will look like over a 10-year period and scores a president’s tax and spending agenda based on those estimates. The CBO, however, is more restrained in its approach.

The discrepancy between the two reports is due to the CBO’s assumption that current law remains largely unchanged. The nonpartisan fiscal research agency also believes that tax revenues will be $1.8 trillion lower than the OMB, which is due to less rosy economic projections over the next 10 years (2015-2024).

President Obama’s budget estimates that budget deficits over the next decade will come in at approximately $4.93 trillion (Table S-1 of the OMB report). But the CBO estimates that deficits will be significantly higher, at $6.56 trillion (Table 1 of the CBO report), or $1.64 trillion greater than the administration’s estimate.

Here’s a look at the year-by-year differences:

Chris McDaniel: We need more responsible people running the government

Chris McDaniel

The Republican Senate primary in Mississippi has become ground zero for the battle between the GOP establishment and the grassroots.

In one corner there is Sen. Thad Cochran, who first went to Washington in 1973 and has fallen in love with the smell of the marble on Capitol Hill. In the other is state Sen. Chris McDaniel, a conservative seeking to shake up the status quo.

McDaniel, 41, is the one conservative primary challenger who has a legitimate shot of taking down an incumbent Republican. He’s saying the right things on the campaign trail, pushing fiscal conservative ideas and constitutional principles that appeal to base voters in Mississippi.

What helps McDaniel’s case is that Cochran has become one of the most squishy Republican in the Senate. The long-time Senate Republican recently earned a dismal 63% rating from the American Conservative Union, far worse than GOP colleagues facing primary challengers.

It would seem that McDaniel’s message is making headway, though polling out of the state has been scant. The most recent poll, conducted by Harper Polling, found Cochran’s lead in the race has fallen to 17 points from 23 points in December. Other polls, however, have found that the race is within single digits.

Deficits to grow by $7.6 trillion over next 10 years

The Congressional Budget Office expects budget deficits to grow by $7.62 trillion between 2015 and 2024 despite a rise in tax revenue. That, according to updated budget projections released yesterday.

The nonpartisan fiscal research office expects budget deficits to hit $492 billion in 2014, or 2.8% of gross domestic product (GDP), and $469 billion in 2015 before beginning to rise again. By 2020, the budget deficit will hit $804 billion, or 3.5% of the economy.

The main drivers of federal spending are entitlements, known budget language as “mandatory spending” or “autopilot spending,” and debt service. These budgetary items will consume nearly 74% of the federal budget over the 10-year budget window.

Though tax revenues will eclipse $4.9 trillion, or 18.3% of GDP, by 2024, spending will continue to rise at an unsustainable pace. The federal government will spend nearly $6 trillion in that same year. The federal government will spend nearly $48.2 trillion over the course of this timeframe.

Added together, taxpayers will be hit with $7.62 trillion in budget deficits over the 10 year budget window. The share of the national debt held by the public will eclipse $20 trillion by 2024. This, despite higher than average tax revenues collected by the federal government.

The Congressional Budget Office warns of potentially dire consequences if federal lawmakers don’t act soon to deal with the threats to the United States’ long-term prosperity.

ReasonTV: Happy (Tax Day Edition)

See Video

ReasonTV has put out a video in honor of Tax Day to the tune of “Happy” by Pharell Williams. They point out that we DON’T want to pay for things like outhouse in the middle of the woods, a camel statue from Pakistan, and studies on quails.

As they say in the video, “It’s crappy!” But if you don’t pay up, you’re going to jail. Happy Tax Day!

Today in Liberty: Cantor unwilling to fight for Ex-Im Bank reauthorization, Obama’s 442 tax hike proposals

“It is impossible to enumerate a priori all the rights we have; we usually go to the trouble of identifying them only when someone proposes to limit one or another. Treating rights as tangible claims that must be limited in number gets the whole concept wrong.” — David Boaz (Politics of Freedom: Taking on The Left, The Right and Threats to Our Liberties)

— Cantor backing away from cronyism: The Hill notes that House Majority Leader Eric Cantor isn’t going to spend political capital over the reauthorization of the controversial Export-Import Bank, a government-backed entity known for rampant cronyism. (They also read websites which mention them, at least that’s what our Google Analytics reports tell us.) “Cantor…has privately told members he does not intend to get involved this time around,” The Hill reports, “a message that some see as an indication that he is wary of battling conservatives angered by a number of his recent legislative moves.” It looks like House conservatives are going to make Ex-Im reauthorization their big issue this spring, part of a push to end corporate welfare and change the narrative about the Republican Party.


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