Affordable Care Excise Tax, Part II

Natural Born Conservative ^ | January 7, 2015 | Larry Walker II

[NaturalBornConservative]

Effing the Middle Class

:: By: Larry Walker II ::

In Part 1, we voiced concern that in constitutional law sense, an excise tax is usually an event tax as opposed to a “state of being” tax, the recent exception to this principle being the "minimum essential coverage" tax under Internal Revenue Code section 5000A as enacted by the Patient Protection and Affordable Care Act (Public Law 111–148), whereby an indirect tax is imposed on the condition of not having purchased health insurance coverage.

This is not the first time in history the United States has forced its middle class to pay a tax supposedly for our common good; Social Security and Medicare taxes come to mind. However, this is the first time the federal government has ordered its middle class to either engage in an act of commerce, or else hand over a percentage of its hard earned income.

Nearly 18 million state and local government employees as well as a few conscientious religious objectors are exempt from Social Security taxes, while the rest of us are bound to a sinking ship. Is it fair that millions of Americans get a better deal, while the masses are forced to contribute to the welfare of others?

Under the Affordable Care Act it's worse. Those who voluntarily purchase private company health insurance plans, predetermined by the federal government as meeting their needs, and deemed affordable to them based on contrived criteria, are allowed to escape the new tax, while those in need (i.e. stuck in the middle and still uninsured) get screwed.

If the principle behind the affordable care tax were applied consistently across the board, then those participating in qualified retirement plans should be exempt from Social Security tax, and owners of long-term care insurance contracts should be excluded from Medicare tax. This would be fair and equitable, but as it stands the new tax represents a major departure from Americanism.

Under this latest departure from common sense, the poor receive free health care through state-run Medicaid programs, the rich can handily afford the best of insurance plans, and the middle class are either stuck with high premiums compounded by soaring deductibles, or slapped with an excise tax for not purchasing a government mandated plan.

Members of the middle class, and those once aspiring, who refuse on principle, or are for myriad reasons unable to purchase a government mandated health insurance plan, and not meeting one of several exemptions, are subject to this new “state of being” tax. In other words, the state of being stuck between a rock and a hard place makes the middle class a prime target for funding government subsidies to the poor.

If you and your family did not have minimum essential coverage in 2014, you will need to meet a specific exemption to avoid paying the new excise tax. If you would like to obtain coverage for 2015, the deadline for doing so is February 15, 2015. To obtain coverage, your options include:

• Health insurance provided by your employer;

• Health insurance purchased through the Federal website (healthcare.gov), or your State’s Marketplace;

• Coverage provided under a government sponsored program (i.e. Medicare, Medicaid, Veterans Administration);

• Health insurance purchased directly from an insurance company; or

• Other health insurance coverage that is recognized by the Department of Health & Human Services.

Who is exempt?

The Affordable Care Act mandates individuals without health insurance to pay an excise tax on top of their regular federal tax obligation, however there are exemptions. If you are exempt from the requirement to maintain minimum essential coverage, the excise tax won’t apply when you file your 2014 federal tax return. An exemption may apply if you meet one of the following criteria:

1. You have no affordable coverage options because the minimum amount you must pay in annual premiums is more than 8% of your household income; or

2. You have a gap in coverage for less than three consecutive months; or

3. You qualify for one of the hardship exemptions listed below, or belong to an exempt group (explained later).

Numbers 1 and 2 (above) may be claimed directly on your income tax return, but a hardship exemption (number 3) must be approved by a government bureaucrat. To claim a hardship exemption, you must complete and mail an application to what’s being called the Health Insurance Marketplace (i.e. the federal government). Upon approval, you will receive an "exemption certificate number" (ECN), which must be included on your tax return to receive the exemption.

Please be aware, that if you do not qualify for exemption numbers 1 and 2 (above), and think you may qualify for one of the following hardship exemptions, the time to submit an application is now. If you wait until tax season, the filing of your tax return may be delayed (awaiting receipt of an ECN), or you may have to file without an exemption and amend your return later. Choosing the latter will affect the amount of your refund or balance owed.

If any of the following hardships apply to you, you must submit an application for exemption as discussed in Part 1:

1. You were homeless.

2. You were evicted in the past 6 months or were facing eviction or foreclosure.

3. You received a shut-off notice from a utility company.

4. You recently experienced domestic violence.

5. You recently experienced the death of a close family member.

6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.

7. You filed for bankruptcy in the last 6 months.

8. You had medical expenses you couldn't pay in the last 24 months that resulted in substantial debt.

9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.

10. You expect to claim a child as a tax dependent who's been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child.

11. As a result of an eligibility appeals decision, you're eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren't enrolled in a QHP through the Marketplace.

12. You were determined ineligible for Medicaid because your state didn't expand eligibility for Medicaid under the Affordable Care Act.

13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.

14. You experienced another hardship in obtaining health insurance.

If any of the 14 hardships (above) apply to you, and you wish to be excluded from the affordable excise tax, then you must submit a hardship application, along with proper documentation supporting your claim. If approved, you will be granted an ECN to enter on your tax return. Good luck with that. If denied, you may need to pay the tax, or if you are expecting a refund the IRS will conveniently subtract it out.

Exempt Groups: The following individuals are exempt from coverage:

1. Religious conscience. Any member of a religious sect that is recognized as conscientiously opposed to accepting insurance benefits. The Social Security Administration administers a similar process allowing exemption from Social Security and Medicare taxes. You must submit an application to claim this exemption.

2. Health care sharing ministry. Any member of a recognized health care sharing ministry. Health care sharing ministries (HCSM) provide health care cost sharing arrangements among persons of similar and sincerely held beliefs. HCSMs are operated by not-for-profit religious organizations acting as a clearinghouse for those who have medical expenses and those who desire to share the burden of those medical expenses. You may claim this exemption directly on your tax return through self-attestation.

3. Indian tribes. Any member of a federally recognized Indian tribe. You may claim this exemption directly on your tax return through self-attestation.

4. No filing requirement. An individual whose household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on filing status, age, and types and amounts of income. If you are not required to file a return, then no other action is required.

5. Incarceration. Any individual in jail, prison, or a similar penal institution or correctional facility. You may claim this exemption through self-attestation when you fill out your federal tax return.

6. Not lawfully present. Any individual who is neither a U.S. citizen, U.S. national, nor an alien lawfully present in the U.S. If you are in the U.S. illegally, then according to the law you are exempt. Well, imagine that.

You’ve Been Grubered

The affordable excise tax maxes out at 1% of household income (above the filing threshold) in 2014, increases to 2% in 2015 (i.e. a 100% increase), then to 2.5% in 2016 (i.e. an additional 25% hike) and is automatically adjusted for inflation thereafter. What’s the rationale behind the dramatic rate of increase? Is inflation expected to rise by 100% in 2015 and by another 25% in 2016? Are middle class wages expected to grow at anywhere near this clip?

You’ve got to give it up for the Grubers (i.e. Democrats), for pulling the wool over our eyes and sneaking this baloney into law. As if their deception wasn’t bad enough on its own, what’s even more disturbing is their blatant persistence in calling this “state of being” excise tax a fee or penalty, even after the Supreme Court ruled it to be a tax. One has to wonder just who they are trying to fool at this point? Certainly members of the middle class, who are beginning to feel the pinch, are not fooled.

If the affordable care tax is indeed a fee, doesn’t the act of paying a fee normally correspond with the receipt of some good or service? Sure, but in the matter at hand, what does the middle class get in return for this so-called fee? Do we receive health insurance? Nope.

All the middle class winds up with is less money to cover its uninsured, out-of-pocket, health care expenses, and less to put towards compliance with the nefarious Act. So how exactly does this help the uninsured? Well, it doesn’t help this group.

If the affordable care tax is a penalty, doesn’t the assessment of a penalty normally succeed an act of wrongdoing? Yes, but in this matter, what wrong has been committed? Is the act of paying one’s own health care expenses out-of-pocket (without the benefit of health insurance) a crime? Since the statute waives criminal penalties for non-compliance with the requirement to maintain minimum essential coverage, it’s not a crime.

The Supreme Court agrees, its Chief Justice having stated that, “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax…” Had the court deemed it a penalty, the entire law could have been ruled unconstitutional. Face it, the affordable excise tax is just that, a tax. It’s not a fee, nor is it a penalty, so it’s high time you Grubers cut the B.S. and start calling it what it is. Hopefully, the new Congress will bring an expeditious end to this looming catastrophic nightmare.

To be continued…

Related:

Affordable Care Excise Tax, Part I

#Health+Care

[Libloather]

You recently experienced domestic violence.

[ZRicochet]

It’s not “Affortable care act tax”, not even “Obamacare tax anymore”, it’s “Boehnercare tax” now. Boehner’s the one who pushed the funding thru. Of course for his Best Friend Forever, Obama.

[NaturalBornConservative]

Damn!

[Ray76]

“may reasonably be characterized as a tax” - that’s Roberts grubering.

[The Ghost of FReepers Past]

The oppressive taxation has only just begun to kick in.

[Amendment10]

Thank you for referencing that article NaturalBornConservative. Please bear in mind that the following critique is directed at the article and not at you.

FR: Never Accept the Premise of Your Opponent’s Argument

Regarding the article, patriots need to bear the following in mind. Regardless what activist justices wanted everybody to think about the constitutionality of Obamacare, these justices wrongly ignored that the Supreme Court had historically clarified states have never delegated to the feds, expressly via the Constitution, the specific power to regulate, tax and spend for intrastate healthcare purposes. This is evidenced by the following excerpts from Supreme Court case opinions.

• ”State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, &c. are not within the power granted to Congress. [emphases added]” —Gibbons v. Ogden, 1824.

• “Congress is not empowered to tax for those purposes which are within the exclusive province of the States.” —Justice John Marshall, Gibbons v. Ogden, 1824.

In fact, regardless that federal Democrats and RINOs will argue that if the Constitution doesn’t say that they cannot do something then they can do it, note that the Supreme Court has condemned that foolish idea. More specifically, the Supreme Court has clarified in broad terms that powers not expressly delegated to the feds via the Constitution, the power to regulate vote-winning intrastate healthcare in this case, are prohibited to the feds.

”From the accepted doctrine that the United States is a government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the states, or to the people. To forestall any suggestion to the contrary, the Tenth Amendment was adopted. The same proposition, otherwise stated, is that powers not granted are prohibited [emphasis added].” —United States v. Butler, 1936.

[ballplayer]

Well John Roberts never ruled on the Constitutionality of the Penalty or tax as he called it because no one had to pay the tax yet.
So if the tax or penalty is now in effect,whomever pays it has now been harmed and can sue claiming they are being penalized for not engaging in commerce forced on them by the government

[NaturalBornConservative]

"Never Accept the Premise of Your Opponent’s Argument." - A good article and wise words.

I really didn't draw any conclusion here in Part II. My premise extends from Part I, "I should have the freedom to either buy health insurance or not free from government coercion."

I suppose Grubers would premise that everyone has a right to health insurance, or something. But what I'm saying blows past that, to questioning the constitutionality and morality of this new excise tax.

What Grubers refer to as a penalty and sometimes a fee, via www.heathcare.gov and in IRS's instruction booklets, the Internal Revenue Code classifies as an excise tax. Justice Roberts referred to it as a financial penalty which could be characterized as a tax, but I suppose it could also be characterized as extortion.

What I find ironic is if it is a tax, it's like no other tax in American history. It is in fact more of a penalty than a tax, and is being used to coerce someone like me into making a bad decision. I know my limits, and my government has just overstepped it's bounds. That's not good.

[Amendment10]

Regardless whether an appropriations bill establishes taxes, fees or penalties, note that the Constitutions’s Clause 1 of Section 7 of Article I, the appropriations clause, uses only the term raising revenue. And raising revenue is what constitutionally indefensible Obamacare does regardless which of the previously mentioned terms that corrupt politicians and activist justices want to call it.

But more importantly, note that one of the excerpts from previous post reasonably indicates that Congress is prohibited from making appropriations bills of any kind which it cannot justify under its Article I, Section 8-limited powers.

”State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, &c. are not within the power granted to Congress [emphases added].” —Gibbons v. Ogden, 1824.

In other words, regardless of any appropriations bill that Congress makes to raise revenue in the name of intrastate healthcare, Congress actually has no constitutional authority to make such a bill any more than Congress can make laws which address our 1st Amendment-protected personal freedoms.

The bottom line concerning Obamacare is the following imo. Congress wrongly ignored that it first had to propose an amendment to the Constitution to the states as required by the Constitution’s Article V, the amendement in this case granting Congress the specific power to regulate, tax and spend for intrastate healthcare purposes. And if the states had chosen to ratify such an amendment then I wouldn’t be making this post.

But corrupt Congress and corrupt Obama wrongly ignored the will of the Article V state majority, as DC has done with probably most federal spending programs that it has established for many decades, likewise wrongly establishing Obamacare outside the framework of the Constitution.

What a mess! 8^P

[NaturalBornConservative]

Yes, it is a mess, because in my profession, I am ethically obligated to practice and advise on what stands as the law, whether I agree with it and the manner whereby it was passed, or not. I have no choice other than to concede that the PPACA is the law, but I will not be coerced into compliance with the individual mandate. The government can threaten to tax or penalize me, but I do not intend to ever purchase one of its prescribed health insurance plans. Fortunately, the statute doesn’t grant the IRS power to file liens and levy’s with regard to this tax, so they may never get it.