IRS and the Health Care Law

A reader asked FactCheck.org if reports that the IRS would need over 1,000 new workers to administer Obama's health care reform law. Not surprisingly, the numbers are misleading...

Fact Check reports:

The IRS is actually asking for more new workers than reported in an article by U.S. News and World Report — a story that has generated a lot of Internet buzz after being picked up by news outlets, such as Fox News and The Daily Caller. The IRS budget request for fiscal year 2012 shows that the agency is seeking at least 1,269 full-time equivalent employees (FTEs) at a cost of $473 million to help implement the Patient Protection and Affordable Care Act.

But many of them are needed to deliver new tax credits, not to dun taxpayers. The agency is seeking to add 291 "revenue agents" — most of them (193) to "ensure accurate delivery of tax credits." The agency’s technology staff would see the biggest increase with the addition of 537 IT program analysts and specialists.

Still, Republican Sen. John Barrasso of Wyoming mischaracterized the IRS budget request in an interview on Fox News, falsely suggesting that all of the new hires will be auditing taxpayers.

Barrasso, Feb. 16: We don’t need a thousand new IRS agents who are now going to audit Obamacare.

That’s ridiculous. Yes, the IRS budget request lists 1,054 FTEs under the category of "enforcement initiatives" — which is the number cited by U.S. News. And, yes, the IRS wants 58 agents to enforce the new tanning salon tax, which took effect in 2010. But the 1,054 figure also includes 504 new hires to "ensure accurate delivery of tax credits." The law, among other things, provides tax credits for small businesses to offer coverage to their employees, beginning in April 2010.

Read more here

That Health-Care Tax Pledge

From the Wall Street Journal.com:

'If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime." So spoke Barack Obama at his first address to Congress in February. We're about to find out if the President cares about that promise as much he does passing a health-care bill.

Congressional Democrats have loaded up their health bills with provisions raising taxes on the middle-class by stacks and stacks of dimes. And Senate Democrats on Tuesday made clear they won't be bound by the President's vow; 54 voted to kill Idaho Republican Mike Crapo's amendment to strip the bill of taxes on families earning less than $250,000 and individuals earning less than $200,000.

Those tax hits include a mandate of up to $750 a year for Americans who fail to purchase health insurance; new levies on small businesses (many of which file individual tax returns) that don't offer health care to employees; new tax penalties on health savings accounts and flexible spending accounts; and higher taxes on medical spending, including restrictions on medical itemized deductions, as well as taxes on cosmetic surgery. A Senate Finance Committee minority staff report finds that by 2019 more than 42 million individuals and families—or 25% of all tax returns under $200,000—will on average see their taxes go up because of the Senate bill. And that's after government subsidies.

This profusion of tax hikes is central to the Democratic fiction that the Senate bill is budget neutral. And because many Senate Democrats are cool to the House proposal to fund legislation with a surtax on the "wealthy," many of these middle-tax hikes will likely remain in final legislation. Yet President Obama is embracing the bill.

Democrats are instead trying to claim that some taxes really aren't taxes. The President in September engaged in a debate with ABC's George Stephanopoulos, with the President arguing that the individual mandate isn't a tax since it is for the good of America. Michigan Senator Debbie Stabenow says increasing the amount of medical expenses a person must accumulate before deducting them also isn't a tax because "most Americans" don't itemize. Except the millions of middle-class Americans who do. Democrats have argued their restrictions on health savings accounts simply close "tax loopholes" and therefore also aren't new taxes.

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Taxing health benefits: A read-my-lips moment for Obama?

From The Minnpost.com:

What is a campaign promise? And how seriously do we expect them to be kept?

If, during your campaign for president, you criticize one your opponent's ideas, really, really rail against it, advertise against it, successfully convince the public that it's a reason to vote against your opponent, and you win, are you obliged to fight against that idea? To refuse to sign it into law? To rule it "off the table?"

OK, let's get down to cases. We're talking about President Obama, and about the idea of eliminating the tax-exempt status of employer-paid health insurance.

During the campaign, the elimination of this very significant tax benefit was a key part of John McCain's health care proposal. (McCain wanted to use it to offset the creation a big tax credit that would be available to every individual or family to use in buying health insurance.)

Obama denounced the idea. Really, really slammed it. Advertised against it. One 30-second spot, containing the tell-tale "I'm Barack Obama and I approved this message," called the McCain proposal "a multitrillion dollar tax hike. The largest middle class tax hike in history."