Obamacare Tax?

[bbastenbeck]

Tax? Thank God
The Supreme Court has ruled that any punitive action/fine levied on an individual or organization as a result of not conforming to what has been called ‘ObamaCare’ is a Tax. Congress has the power to levy taxes.
Congress does not have the power to levy taxes on IRS Tax Exempt organizations.
As an example, Catholic Family Services, which is an IRS Tax Exempt organization, would not and should not have to pay any tax (fine) as a result of offering non-conforming (per ObamaCare) healthcare insurance to its employees. It is an IRS recognized Tax Exempt organization.
This would apply to any IRS recognized tax exempt religious school, hospital or charity and any IRS recognized Secular Nonprofit organization.
Maybe Justice Roberts knew exactly what he was doing.

Bill Bastenbeck
Winsted, CT

 

[smittee]

I don’t really know much about US public health policy. Can you tell me what that all means and why US Catholic organisations might have non-conforming health insurance for their workers?

 

[Seeker1961]

Wouldn’t that be interesting…

 

[jfanning]

ObamaCare is socialized medicine. This country was not meant to have the government control and provide healthcare. There will always be people with out insurance and medical care, however, that number would be much smaller if healthcare became a free market among all states. Costs go down, the number of insured go up. It is known that only half of the United State’s population pays taxes. We now have half of the nation paying for the entire nation’s health care. Even if you opt out of ObamaCare, the government needs some source of income. Taxes will increase on all tax payers. ObamaCare is bad news!

 

[Seeker1961]

ObamaCare is socialized medicine. This country was not meant to have the government control and provide healthcare. There will always be people with out insurance and medical care, however, that number would be much smaller if healthcare became a free market among all states. Costs go down, the number of insured go up. It is known that only half of the United State’s population pays taxes. We now have half of the nation paying for the entire nation’s health care. Even if you opt out of ObamaCare, the government needs some source of income. Taxes will increase on all tax payers. ObamaCare is bad news!

Which has nothing to do with the point being raised…but we’re all thrilled to read your opinion.

The potential GOOD news here is that SCOTUS may have handed the Bishops the exact thing they (and we) wanted-exemption for religious organizations!

 

[Iheartcoffee]

Wow…I had never thought of it that way. It is true that if it were a tax then tax-exempt organizations should hopefully be excluded.

Of course, that still leaves businesses run by Catholics in a sticky situation though…

I sort of wonder if by calling it a “tax” then they have technically given Obama what he wanted, while at the same time delivering a HUGE blow to his administration and his campaign. He is going to be the guy that not only gets blamed for raising taxes, but for CREATING NEW ONES. It is extremely detrimental to him for this to be a “tax” in the eyes of the Supreme Court, as is evidenced by the administration’s repeated attempts to tell the country it is not a tax.

 

[smittee]

…The potential GOOD news here is that SCOTUS may have handed the Bishops the exact thing they (and we) wanted-exemption for religious organizations!

Okay…but I don’t understand why the Church needed an exemption? Do we have special reasons to not have compliant health insurance for employees in the US?

 

[Seeker1961]

In my Constitutional Law class we learned that a really good decision leaves both sides happy AND unhappy.

Roberts may have done his best work here-too bad he feels like he has to go into hiding.

 

[Seeker1961]

Okay…but I don’t understand why the Church needed an exemption? Do we have special reasons to not have compliant health insurance for employees in the US?

The church and church run organizations should not have to pay for health coverage that includes birth control or abortion services that are in contradiction to our faith.

 

[smittee]

The church and church run organizations should not have to pay for health coverage that includes birth control or abortion services that are in contradiction to our faith.

Ah, that makes sense. Thank you.

Will the Church use ‘non-compliant’ alternatives? (That’s ‘non-compliant’ by the new law, not by faith, btw.)

 

[Seeker1961]

Ah, that makes sense. Thank you.

Will the Church use ‘non-compliant’ alternatives? (That’s ‘non-compliant’ by the new law, not by faith, btw.)

If this does what we think it does I’m sure there will be insurance companies happy to write policies for the Catholic and other religious institutions that will be looking for them. It will be a nice market niche.

 

[Iron_Donkey]

Tax? Thank God
The Supreme Court has ruled that any punitive action/fine levied on an individual or organization as a result of not conforming to what has been called ‘ObamaCare’ is a Tax. Congress has the power to levy taxes.
Congress does not have the power to levy taxes on IRS Tax Exempt organizations.
As an example, Catholic Family Services, which is an IRS Tax Exempt organization, would not and should not have to pay any tax (fine) as a result of offering non-conforming (per ObamaCare) healthcare insurance to its employees. It is an IRS recognized Tax Exempt organization.
This would apply to any IRS recognized tax exempt religious school, hospital or charity and any IRS recognized Secular Nonprofit organization.
Maybe Justice Roberts knew exactly what he was doing.

Bill Bastenbeck
Winsted, CT

But would the employees covered by these policies still have to pay a tax for not having “approved” policies?

 

[losh14]

Good points here … and this may very well be the subtle solution. It may not be entirely the case, though, since

But would the employees covered by these policies still have to pay a tax for not having “approved” policies?

Good question … and you raise the point that there are two penalties here - one levied upon the individual for failing to have sufficient insurance (the individual mandate), which SCOTUS decided is a tax. The other is levied upon the employer for failing to offer sufficient insurance. I don’t know whether that’s considered a tax or a penalty, although my gut tells me that penalties can’t be assessed without some sort of due process, so that something which is levied automatically is in fact a tax.

And this raises the very good point at the nexus - if an employer fails to offer valid insurance, does the employee then have the responsibility to seek it out? To my understanding, the insurance exchanges (which will not be set up until 2013 or 2014) are only open to those whose employers do not provide any insurance, though that seems a small matter to change.

But I’m a statistician, not a lawyer, and I’ll defer to someone with the right training.

 

[smittee]

…Good question … and you raise the point that there are two penalties here - one levied upon the individual for failing to have sufficient insurance (the individual mandate), which SCOTUS decided is a tax. The other is levied upon the employer for failing to offer sufficient insurance…

So…assuming the new laws mean ‘compliant’ health care policies always cover some morally dangerous procedures, the situation might be that if Catholic organisations use their new exemption to avoid policies inconsistent with faith and values, then their (most probably) Catholic employees might be compelled to participate in the questionable ‘compliant’ ones at their own cost anyway, and/or be financially punished with levies? (Sorry about that tortured language there.) I’m sure it wouldn’t happen like that, would it? It would be nice to clear that up for sure.

I’m quite bothered that this exemption had to be fought for by appealing to technicalities of taxation law. That the legislators couldn’t or wouldn’t include a respectful accommodation of values is pretty ordinary.

Then again, at least it’s done.

 

[Seeker1961]

The way I read it-purchasing health care is still a choice. You can get it from your employer, you can buy it as an individual, or you can purchase it from government health exchanges. If you do not purchase it AT ALL-then you must pay a tax. If that theory is correct, then Catholics whose employer insurance covers things they don’t like could purchase it from a private source.

Now-I would bet a few dollars that a whole lot of Catholics are part of insurance plans that offer coverage that they would object to if they knew about it and have been for a LONG time.

 

[markomalley]

Tax? Thank God
The Supreme Court has ruled that any punitive action/fine levied on an individual or organization as a result of not conforming to what has been called ‘ObamaCare’ is a Tax. Congress has the power to levy taxes.
Congress does not have the power to levy taxes on IRS Tax Exempt organizations.
As an example, Catholic Family Services, which is an IRS Tax Exempt organization, would not and should not have to pay any tax (fine) as a result of offering non-conforming (per ObamaCare) healthcare insurance to its employees. It is an IRS recognized Tax Exempt organization.
This would apply to any IRS recognized tax exempt religious school, hospital or charity and any IRS recognized Secular Nonprofit organization.
Maybe Justice Roberts knew exactly what he was doing.

Bill Bastenbeck
Winsted, CT

Actually, Congress has the power to tax any entity it chooses. Tax-exempt status is a result of statute, not the Constitution (26 USC 501).

In fact, challenges have been given to authorizing tax-exempt status for churches in particular because that tax exempt status would promote religion. The courts have agreed that allowing tax exempt status is Constitutional because it does not create an excessive entanglement. From Walz (1970):
It appears that, at least up to 1885, this Court, reflecting more than a century of our history and uninterrupted practice, accepted without discussion the proposition that federal or state grants of tax exemption to churches were not a violation of the Religion Clauses of the First Amendment. As to the New York statute, we now confirm that view.
Note that the court is not saying that an exemption is mandatory. The court is saying that it is allowed. Big difference.

Also, see the Lemon Test (Lemon vs Kurtzman):

Every analysis in this area must begin with consideration of the cumulative criteria developed by the Court over many years. Three such tests may be gleaned from our cases. First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion, Board of Education v. Allen, 392 U.S. 236, 243 (1968); [p613] finally, the statute must not foster “an excessive government entanglement with religion.” Walz, supra, at 674.

As far as I know, churches and other non-profits do, actually, pay employment related taxes, such as the employer share of FICA. Since the employer “shared responsibilty” (barf) tax is a “miscellaneous excise tax” and not an “income tax” (which is where the concept of “tax exempt” comes from), I am not certain that employers, whether for profit or not-for-profit would be exempt.

 

[ACCT]

Don’t get me wrong. Every American should be entitled to world-class healthcare at an affordable price. But I’m no expert, so I don’t have the answer as to what the solution would be to get there.

But I do know this …

Forcing Americans to buy healthcare or else face a penalty under the guise that mandatory care is some sort of tax that Congress has full power to levy is just plain wrong. So is penalizing people if they decide not to buy health insurance.

For one thing, the Supreme Court should not be regulating commerce to such an extent. Indeed, I find it ironic that while Congress and the Supreme Court are meddling in commerce and free trade, our leaders in Washington are promoting free trade all over the world.

For another, our founding fathers were against all forms of direct taxation. I’m sure they would be rolling over in their graves if they understood how both houses of Congress, and now the Supreme Court, are effectively mandating healthcare coverage with the logic that it’s a tax, which Congress has full power to levy.

And for yet a third, a dangerous new precedent has been set.

Suppose, for example, down the road that Congress decides everyone must own a hybrid car to reduce carbon emissions. Would the Supreme Court then rule that it’s in the “best interest of the country” … and that it’s really a form of “tax” to pay to preserve the environment … ergo, it’s perfectly legal?

I sure hope not.

Again, I’m not an expert in healthcare. But I don’t think ObamaCare is going to fix much, and I think the potential damage done by the Supreme Court’s decision could come back to haunt us.

 

[manualman]

Politics aside, does anybody actually understand how Obamacare is supposed to benefit the poor and unemployed who have no health insurance?

As I understand it today, such people routinely go to the ER for crisis care and so without preventive care unless they can find a free clinic. Once ACA goes into effect, those people will be required by law to purchase health insurance and if they don’t they will be subject to a four figure IRS penalty, right?

How is this better for them? What have I missed?

 

[Ridgerunner]

Politics aside, does anybody actually understand how Obamacare is supposed to benefit the poor and unemployed who have no health insurance?

As I understand it today, such people routinely go to the ER for crisis care and so without preventive care unless they can find a free clinic. Once ACA goes into effect, those people will be required by law to purchase health insurance and if they don’t they will be subject to a four figure IRS penalty, right?

How is this better for them? What have I missed?

I think it is a great mistake to assume that only people with no insurance use a lot of ER care. A solvent person or one who is working will avoid the ER like the plague because the hospital will sue a solvent person and garnish his wages if he doesn’t pay.

The big users of ER care are people who cannot be traced or garnished for collection and people who have Medicaid. If you’re not going to pay, you don’t care what it costs.

But it seems to me the big “tax” in Obamacare is not any of th eones people talk about. There are lots of mandates in Obamacare that increase the cost of insurance; preexisting conditions, contraceptives, abortifacients, sterilizations, in vitro fertility treatment, low deductibles, plus whatever else seems politically advantageous in the future to politicians; almost certainly including abortion. Those who are paying their premiums without subsidies are going to pay full boat for those increases in coverage; coverage a lot of them won’t even want. I expect that “tax” is going to be the biggest one of all. Right now it seems to be $1300/year, and is expected to be much higher in the future.

That “tax” might be so big that even people with moderate subsidies will also be on the “taxpaying” end for that particular tax.