Please ensure Javascript is enabled for purposes of website accessibility
September 29, 2023

Just Admit It, Choosing the IRS to Enforce ObamaCare Was Smart

One of the many beefs that people have with ObamaCare is that the IRS will be tasked with enforcing the penalty assessed to those that choose not to purchase health insurance.

Joe Kristan laments:

Maybe the most depressing aspect of the [SCOTUS] decision is the way it seems to endorse using the tax law as the Swiss Army Knife of public policy.  Things that Congress can’t enact any other way are now possible if they can somehow be crammed into the tax law.  The tax code is already groaning under its load of responsibilities for industrial policy, health policy, welfare policy and housing policy, for starters.  The IRS Commissioner is now sort of a super cabinet member with a portfolio that dwarfs most of the “real” cabinet departments.  Of course, the IRS is ill-suited to this role, resulting in poor policy administration and poor tax administration. 

Considering the amount of responsibility that the IRS has, the Swiss Army Knife analogy is appropriate. There are all sorts of strange things rammed into the tax law – thus falling under the jurisdiction of the IRS – that make little sense. Why does this happen?

Typically, when an individual person is given tons of responsibility it's because TPTB believe that (s)he can handle it. Many of you can relate to this as you have found yourselves in a position where you are taking on more and more responsibility because you've proven to your superiors that you're nothing if not dependable (or a giant pushover).

Maybe not surprisingly, the federal government does not operate this way. To wit:

DNC chairwoman Rep. Debbie Wasserman Schultz (D-Fla.) says the Internal Revenue Service (IRS) is the "easiest, most basic way" to enforce President Obama's health care law. However, Wasserman Schultz insists the fee associated with the law is not a "tax" but a penalty.  Wasserman Schultz says the IRS, which is responsible for collecting taxes, should be used because "it's simply a matter of ease in administration."

So on the surface, it appears the IRS was chosen not because it was the best equipped to enforce the law, but because the crafters of the legislation were sorta lazy. I guess that's understandable. It has to be way easier to ring the IRS and say, "Hey, you're going to enforce the new healthcare policy, okay?" when you know they've taken on other responsibilities that are seemingly unrelated to their core function.

But it also may mean that it's a way easier sell politically to have the IRS in charge than to create a different enforcement arm for ObamaCare. Think about it. If you're a politically savvy staffer helping to write this legislation you might think, "Why create a new bureaucratic villain when we've got the perfect one already in place?"

The opponents of the law (read: Republicans) demonize the IRS regularly, so pols ranting about "IRS goons" will sound like they're reciting the same old blabber points. A new "ObamaCare Enforcement Agency" or something similar would have allowed the GOP to strike the fear of God into their constituents by conjuring up "death panels," broccoli pushers, and other faceless agents who jump out of helicopters and kick down your doors when you decide you'd rather live without health insurance. The IRS already has this reputation; they're the perfect fall guy. 

So when Rep. Wasserman Schultz says using the IRS is the "easiest" way to enforce ObamaCare I think she implicitly means "smartest"; not smart in the sense that it's good policy, so much as it is smart politics. Those are rarely the same thing anyway.

Wasserman Schultz: ObamaCare Not A Tax, IRS "Easiest" Way To Enforce Penalty [RCP]

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

Woman wearing a dunce cap writing I WILL NOT on a concrete wall

Look What PwC Made the Australian Government Have to Do

The Australian government released exposure draft legislation yesterday in response to “the PwC matter” and the funniest part is the special email they made to receive comments: [email protected]. Not ConsultingReponse or Sept23TaxReform, specifically PwCResponse. In four separate exposure drafts that amend the Taxation Administration Act 1953 (TAA) and/or the Tax Agent Services Act 2009 (TASA), […]

Internal Revenue Building Sign in Washington DC

The IRS Has Stopped Processing ERC Claims Because ERC Mills Are Scamming the F*ck Out of Them

The IRS announced today that it has issued an immediate moratorium on processing new employee retention credit claims at least through the end of the year. The agency cited “rising concerns about a flood of improper Employee Retention Credit claims,” driven by “aggressive promoters,” as the reason for closing the door on ERC claims. IRS: […]