Posted on 07/02/2012 3:42:06 PM PDT by Libloather
House to prohibit IRS from implementing healthcare law
By Pete Kasperowicz - 07/02/12 01:25 PM ET
The House as early as next week will pass legislation prohibiting the IRS from receiving any money from the Department of Health and Human Services (HHS) to implement the 2010 healthcare reform law.
Passage of the financial services spending bill is especially timely in light of last week's Supreme Court ruling that penalties the government can impose under the law against people who refuse to buy health insurance can be seen as a tax, because it is enforced like a tax.
That finding allowed the individual mandate to stand, and Republicans have already started reorienting their attacks against the law based on the knowledge that it only remains in place because it is an allowable tax.
The bill would have to get through the Senate and be signed by President Obama to become law.
The House will take up the Financial Services and General Government Appropriations Act sometime in July, and possibly next week when it returns from the July 4 recess. (The rule governing debate on the bill was already approved last week.) While the Obama administration requested another $1 billion so the IRS can implement the healthcare law, the bill, H.R. 6020, does not give any new money to the IRS.
Additionally, it "prohibits the IRS from receiving transfers from the Department of Health and Human Services to implement the Patient Protection and Affordable Care Act," according to report language accompanying the bill from the House Appropriations Committee.
The report notes that in 2010, HHS allocated $20 million to the IRS for enforcing the healthcare law "without the Committee's knowledge." It also notes that the IRS received $168 million from HHS to implement the law in 2011, and plans to get another $322 million from HHS in 2012.
"The Committee prohibits further such transfers during fiscal year 2013 in section 106 of this Act," the report states.
The bill would spend a total of $21.5 billion on the IRS, Treasury Department and other related agencies, about 1.7 percent less than the current funding level. The bill increases funding in some areas, such as Small Business Administration business and disaster loans, public safety and education in Washington D.C., and the Treasury Department's anti-terrorism financing programs.
To make up for these increases, the bill makes cuts in several areas, including the executive office of the president.
"The committee is disappointed that the administration's request did not propose additional reductions for the EOP salaries and expenses accounts," the bill report says. "The committee believes that the chief executive of any organization experiencing a fiscal crisis should share in the funding sacrifice along with the rest of the organization.
"Therefore, the committee has reduced the salaries and expenses appropriation for each organization under this heading," it adds.
Specifically, the bill would fund salaries in the executive office of the president at $650 million, down $9 million from the current level. White House salaries and expenses would be cut $2.8 million, and funding for costs related to keeping up the White House would be cut $671,000.
Other executive branch agencies would receive token cuts as well, while the Office of Management and Budget would see funding drop nearly $9 million, to $80.5 million.
The bill would also take a swing at the General Services Administration (GSA), which faced harsh criticism this year for a lavish, 2010 conference in which more than $800,000 was spent. Under the bill, the GSA would face more oversight related to its travel budget, and would be banned from holding conferences that don't comply with relevant laws and regulations.
The GSA would also have to submit quarterly spending reports to Congress, and face restrictions in monetary awards it gives to employees.
Republicans in the House need to think like Democrats and stop passing bills like this. What Democrats would do is attatch a bill they want to a larger bill. The GOP leadership can’t seem to think outside the box.
That's all fine and well, but.... there's not much courage in passing a House bill (from recent past history), when you know it will not become law because when it gets to the Senate it will be defeated, AND.... when the Senate re-writes it according to THEIR OWN liking and sends it back to the House under a last-minute threat of a BUDGET SHUTDOWN, the Republicans WILL CAVE!!!
But then they enable it some time down the road - and you find you owe seven years (or whatever) of “penalties”...
Principled, thanks for the welcome.
First off, the tone of my post is a bit harsh, as this was taken verbatim from a letter that I had planned to send to the Fair Tax Organization. I probably should have softened it bit before posting it here. I did not intend it to be a harsh attack against my fellow FReepers who support the Fair Tax, but to only raise my objection to having my after tax retirement savings and assets unfairly double taxed.
Yes, I’m well aware of the “hidden tax” included in the retail price of goods and services due to the fact that businesses are pressed to pass some of the federal income tax and fees on to their customers. But how much of this cost winds up in the retail price can vary greatly depending on how the cost is managed. The cost can instead be passed on in the form of lower dividend payments, lower wages and salaries, less money for R&D, etc. It would be wrong to assume that there will be an immediate 10% drop in retail price of everything when the Fair Tax goes into effect.
You mention a possible solution would be to give individuals a credit on their after tax savings and assets similar to the proposed transitional inventory credit for businesses to help resolve this double tax problem. But I have not seen that officially proposed by the Fair Tax Organization. There has to be a solution because I have a substantial amount of after tax savings of which I would not allow to be unfairly double taxed.
But again, until a solution is put in place, I would MUCH prefer the Flat Tax instead.
NO softening needed.
The 10% in prices is an average of course already IN PRICES. At least that’s what the average was for the several years I calculated it in the 90s and first half of this decade.
But it isn’t just income taxes and fees. FICA is big [which of course remains under the flat income tax.] Nevertheless, the 10% is the average in prices right now. Look it up yourself. So it does make sense that prices would drop about that much right away.
Taxes can only be paid by individuals thru higher prices, lower wages, or reduced ROI. That’s it. The part that’s in prices is around 10%. All other tax costs are elsewhere and elsewhere is where we would expect other tax costs to disappear from.
When you take your after-tax savings out to spend, you’ll be taxed again [’bout 10%] and if you leave it to heirs they’ll be hit about 50%. Even if you give it away you’ll be hit w/ a substantial tax. Under the nrst you get hit with none of that - but as it is now you do get hit again [30% or so - whatever is rev neutral.] So you are so much not worse off under the nrst and may even be better off [but let’s hope not that means you’ve died!]
If you have any pre-tax savings, however, you will surely be better off than expected. If you ONLY have post-tax savings you are in a complete minority. Almost nobody has exclusively after tax investments.
Notwithstanding the above, it isn’t a good idea to double tax anything - in fact it is a fundamental principle of the NRST to tax things only once. So I am asking them to change it. Now I DID soften the letter far more than yours - which was probably not read.
Synthesist,
I believe that you are making fair and reasonable points.
That being said, and with respect (and at the chance of seeming harsh), I’m completely unmoved.
The current system double, triple, and sometimes quadruple taxes us.
An example of triple taxation under the current system (The Death Tax being a fairly recent, and very financially painful, example for me):
My grandfather paid taxes on every dime we inherited, however, because it became “income” upon transfer, it was taxed again.
I took some of those double taxed monies and purchased federally taxed gasoline.
Voila, a triple tax upon a single dollar.
Double/Triple/&c. taxation is one of the main reasons to remove the current Progressive tax and replace it with a system that, after a certain amount of time, would create a single point of taxation - at purchase.
If the Fair Tax were to pass tomorrow, I would gladly pay a sales tax on goods/services moving forward as America (and in turn myself and my family) would be better for it - even on my pre-taxed monies.
It’s an individual choice, however, and I don’t see anything wrong with you wanting a credit for the money that you have paid taxes on - however - this move will begin the corrupting process of adding “loopholes” to what is supposed to be a simple 5-page Tax Bill.
Best,
Noam;ibgu
Space trucker, there is no “Fair tax bill.”
I pray that there never will be one, but if there ever is one, I know that it will be even more onerous than the bag of fairy farts that the small but vocal handful here promote so irrationally.
I insist in dealing with reality, thewrefore, I can only support a true flat tax, and cannot see any logic in anything else.
Naomie,
Wow. What a wonderful reply.
I spent some time searching the net about this unfair double tax problem with the “Fair Tax” on the 4th and ran across the FairTaxNation forum where this question was raised years ago. Sadly, your reply is typical of many replies posted there.
As typical, the replies would mostly dodge the question entirely and instead launch into a listing of the horrors of double/triple taxing of the current federal tax, as if the people raising the “Fair Tax” unfair double tax on their savings didn’t already know of those horrors already. And that reminding them of those horrors should make them feel better about putting up with the exact same horror continuing after the “Fair Tax” goes into effect. C’MON…. REALLY?!?!
You say that you are “completely unmoved” about my unfair double taxation problem, and that you would have no problem with the double tax on your already taxed monies. Well, good for you. But, what you think is good for you does not mean that it should also be good for me. I stand to forfeit a *large* amount of money to this new national sales tax. If you were in MY situation, you would be “completely moved” to be as concerned as I am.
Now, about asking for what I’m going to now call a “Fair Credit” to help compensate for the unfair double taxation of my already taxed savings and assets: this would NOT begin a “corrupting process” of adding “loopholes” to your simple tax bill. The “Fair Credit” would simply be a ONE time event, NEVER to be repeated again, which would only occur when the “Fair Tax” goes into effect. Apparently, the one time “transitional inventory credit” fixes a similar problem for businesses, so is it unfair to ask why not a “Fair Credit” for individuals? Of course, it is not.
In all sincerity, the “Fair Tax” supporters should stop the denials, acknowledge this unfair double taxation problem, then get out in front of it and put a FAIR solution in place. Otherwise, you just invite more opposition and even litigation which could be entirely avoided.
I’ve been Taxed Enough Already! I will NOT settle for even more unfair additional taxation!
Thanks a million for acknowledging the obvious unfair double taxation problem and forwarding this concern to the “Fair Tax” organization.
Oh, and I did not ever send my ogiginal letter…
Synthesist,
As I wrote: “It’s an individual choice, however, and I don’t see anything wrong with you wanting a credit for the money that you have paid taxes on...”
I encourage you to push for the solution you’ve proposed because, honestly, I don’t fault anyone for seeking to prevent unfair double taxation and loosing a single dollar for no reason.
If the final Bill included what you have laid out then I would still think that it’s a great Bill. Maybe even better.
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