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Enforcing Obamacare Fines

Some time ago, I read a claim that it was quite easy to evade the Obamacare fines. I stumbled upon a news article (read it here) that confirms this claim. To avoid the fines, just make sure that you don’t get a refund from the IRS.

It appears that Obamacare instructs the IRS to deduct fines from any refunds owed to taxpayers. If there is no refund, then what? Well it appears that the IRS will just carry over the bill until the next tax return is filed, collecting the fine at that time. But if there is never a refund, the only recourse is for the IRS to ask the Department of Justice to sue taxpayers for the fines. Think about this. How entertaining would it be to see high-priced U.S. attorneys trooping into what amounts to a small claims court trying to get taxpayers to pay a $95 fine? This would be hilarious to see. I think I’d pay money to see this show!

Obviously this enforcement scheme has no teeth. Why would politicians do this? The only answer that I can imagine is that, after deceiving taxpayers by promising  that the IRS would not be involved with Obamacare and because of the lack of public support for this so-called health care reform, Democratic politicians probably tried to avoid making taxpayers any more hostile to the law than they already were. The result may be that the whole Obamacare system collapses when people ignore the fines and only buy insurance when they are sick. Ironically, if this happens, there may be more people without insurance than there were before Obamacare was passed.

Obamacare really is the gift that keeps on giving. If there was ever a program illustrating the profound incompetence of politicians, this is it. I hope that this lesson is not lost on the public and never forgotten.


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Economics One

A blog by John B. Taylor

The Grumpy Economist

One economist's views on economic policy.

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