More Tax Issues for the ACA


Barack Obama signing the Patient Protection an...

Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

It’s now appearing that the infamous quote from Representative Nancy Pelosi (D – CA), “But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”, wasn’t simply a throw away line at a press conference.  Also, Pelosi’s admonition wasn’t just to those who might be eventually covered by the legislation, but included as well those member of congress who failed to read the bill as well.

“Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” is the title of a Legal Journal publication, addressing this issue.  The authors, Jonathan H. Adler Case Western Reserve University – School of Law; PERC – Property and Environment Research Center, and Michael F. Cannon of the Cato Institute, put forth the legal aspects of the flaw in the PPACA.

The abstract from the full 70 page research finds, “The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insurance plans on state-run insurance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds. Because the granting of tax credits can trigger the imposition of fines on employers, the IRS rule is likely to be challenged in court.”

So as we continue to peel back the onion layers of the PPACA and more issues are brought into the light, it becomes apparent that what once appeared to be settled and heading to be the law of the land, is going to be questioned once again.


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