Tuesday, June 4, 2013

News Flash: The IRS and President Obama are not your friends

It’s true.

You probably already suspected that the IRS (Internal Revenue Service, the tax collecting arm of the federal government) is not your friend.

Well, neither is President Obama’s healthcare plan, famously dubbed Obamacare by its detractors (real name: The Affordable Care Act).

The Affordable Care Act. HA! And again I say, HA!

Here is a link to a very interesting article at cnsnews.com by Matt Cover.

I hope you were sitting down.

The gist of the article, for those of you who didn’t read it, is that in a final regulation issued this past Wednesday, the Internal Revenus Service (IRS) assumes that the cheapest health insurance plan for a family of four in 2016 will cost $20,000 for the year.

Yes, you read that right.

There will be four tiers of coverage possible under the Affordable Care Act -- Bronze, Silver, Gold, and Platinum. Bronze is the lowest level.

The figure $20,000 represents the annual premium for Bronze-level coverage.

But wait (as they say in infomercials). You don’t have to buy the coverage. You can choose instead to pay the “penalty” for not having coverage.

The “penalty” for a family of four will be $2,400 payable as part of your income tax for the year.

Yet President Obama continues to insist that he does not want to raise taxes on anyone except the very rich (you know, those nasty millionaires and billionaires whose success just has to have been at your expense). He wouldn’t raise taxes on you.
Not little old you. He’s protecting you, just as he always has done and always will do, is now and ever shall be, world without end, Amen.

Balderdash, poppycock, and other expressions of outright disbelief.

To help illustrate the new rules, the IRS has presented examples of different situations families might find themselves in. In the examples, the IRS assumes that families of five who are not insured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.

Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a “penalty” (a word the IRS still uses despite the Supreme Court ruling that it is in fact a “tax”) of $2,400 in 2016.

For those wondering how clear the IRS’s clarifications of this new “penalty” rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

“(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

“(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 - $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

“(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

On a side note, I’m glad the IRS cleared up the fact that they arrived at their figure of $20,000 by dividing $20,000 by 12 and then multiplying by 12. I don’t think I could have lived another second without knowing that information.

The last I heard, H and J were considering taking K, L, and M and moving to the Cayman Islands.

Until you decide to read my poems, you will continue getting posts like this one.

7 comments:

Yorkshire Pudding said...

Oh sorry - I didn't realise you'd posted those self-penned poems. I am a bit busy today but I promise to get round to reading them very soon.

Regarding Affordable Healthcare, of course health care costs money. We British have been paying for our healthcare for generations in the form of National Insurance. The trouble with all of this is that America is coming to the idea of healthcare for all far too late. It should have happened years ago. Thank God for President Obama. If her were English he would already be a "Sir", maybe even a "Lord" or a "Baron". Praise Obama! Praise Him!

There are many hidden poor in The Land of the Free and when they lose their jobs, grow old or have poorly children, civilisation, humanity and fairness insist that they should be able to access quality healthcare but to put it simply this costs money so I cannot understand the anger that is bubbling from your blogpost like foam from a rabid dog.

rhymeswithplague said...

Yorky Dear, it's not that I'm against quality healthcare for all, not at all. I suppose my concerns include (a) the shock of the cost per family (are they kidding me? $20,000? For the lowest level of care?) coupled with the fact that we're retired and on a fixed income, so an additional $2,400 in penalty/tax is not so easy to come by, and (b) the nagging suspicion that once the program is up and running, the costs will continue to increase (translation: skyrocket) each year and the quality of care will actually decrease simply because government is in charge. We are very big in this country on the private sector's ability to do things much more efficiently and cheaper in the long run than government-controlled things. Also (c) the fact that the tax-collecting arm of the Executive Branch of our government, the Internal Revenue Service, will be in charge of running Obamacare, and not, say, the Department of Health and Human Services.

Yorkshire Pudding said...

Rhymes With Vague...I was waving a red rag at you but your response was no longer rabid - calm and measured instead. You must have been guzzling Rolling Rock or bourbon when you first wrote the post. In Britain too, conservative politicians like to put the idea about that private enterprise is better at getting results than government employees and their organisations. Personally, I would refute that blanket supposition. Sometimes it's the arms of government - often rich in talent - that are more able to achieve success. The idea of financial profit can be very distracting.

Hilltophomesteader said...

I'm with you, RWP! We are self-employed but my husband had brain tumor surgery 12 years ago, hip replacement last year and knee surgery last Winter. He is a general contractor (aka handyman with disabilities and only 53 years old) and there's no WAY we can afford health care - Obama's or anyone else's! And now we'll be 'taxed' for not having what we couldn't afford in the first place! I hear the government chanting...softly now and louder as time goes by...Doom on you....Doom on you....Land of the Free? Well, it used to be.

rhymeswithplague said...

Yorkshire Pudding, it is the fervent desire of millions of Americans that the arms of our government never be anything like the arms of your government. I believe we fought a war over it. See also Hilltophomesteader's comment.

Hilltopetc., your plight is all too common, I fear. But the powers that be in Washington, D.C. (hey, I made a little rhyme!) seem to care less and less what the people think.

Snowbrush said...

And now we learn that the government is keeping a record of the whole nation's phone calls, Internet use, and credit card purchases. And to think that they couldn't tell us about it because they didn't want terrorists to know they were being watched! Obama has taken the things that I hated about Bush and multiplied them ten times over including the persecution of anyone who dares to blow the whistle. He's an Orwellian wolf in sheep's clothing.

Snowbrush said...

P.S. "the quality of care will actually decrease simply because government is in charge."

Oh, yeah, if you want to insure quality care, pay private insurance lackies to deny treatment. No, I don't think the government will do any worse.