In the draft House bill, there is a 2.5% tax on the income (using a convoluted formula) of people who do not have acceptable coverage. In the draft Senate HELP Committee bill, however, the amount of taxation is not set.
Rather, the Senate gives the Secretary of the Treasury (who is in charge of the IRS) the power to come up with whatever amount of taxation (euphemistically called a "shared responsibility payment") he or she deems necessary to achieve compliance with the health care mandate. The bill provides for a new section 59B of the Internal Revenue Code (starting at page 103 of the bill; emphasis mine):
Under this wording, the Secretary of the Treasury, i.e., the IRS, is the decision-maker with regard to the amount of the tax. The Secretary only need consult with the Secretary of Health and Human Services and the States.
SEC. 59B. SHARED RESPONSIBILITY PAYMENTS.
(1) IN GENERAL.—In the case of any individual who did not have in effect qualifying coverage (as defined in section 3116 of the Public Health Service Act) for any month during the taxable year, there is hereby imposed for the taxable year, in addition to any other amount imposed by this subtitle, an amount equal to the amount established under paragraph (2).
(2) AMOUNT ESTABLISHED.—
(A) REQUIREMENT TO ESTABLISH.—Not later than June 30 of each calendar year, the Secretary [of the Treasury], in consultation with the Secretary of Health and Human Services and with the States, shall establish an amount for purposes of paragraph (1).
(B) EFFECTIVE DATE.—The amount established under subparagraph (A) shall be effective with respect to the taxable year following the date on which the amount under subparagraph (A) is established.
(C) REQUIRED CONSIDERATION.—In establishing the amount under subparagraph (A), the Secretary shall seek to establish the minimum practicable amount that can accomplish the goal of enhancing participation in qualifying coverage (as so defined).
The truly pernicious aspect of this provision is not that the Secretary of Treasury would pick some arbititrarily high amount just to raise revenue. Depending upon the nature of permitted judicial review, such an arbitrary decision likely would be overturned.
Rather, the very nature of the tax is unrelated to the cost of coverage. It is a tax to compel compliance. So the more people resist coverage, the more discretion the IRS would have to raise taxes to achieve compliance.
This is taxation unrelated to the federal budget needs or any rational cost of providing a federal government service. It is unprecedented taxation as law enforcement tool, and a complete abdication of Congressional accountability and responsibility.
IRS The New Health Care Enforcer
Taxing Your Mere Existence
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