Writing in the Phoenix Business Journal, Dr. Eric Novack warns readers about the many ways that they will end up paying for the new health care law. Fewer jobs and higher costs are just a few of the law’s unwelcome consequences. As we approach Tax Day, it’s also worth considering how the IRS gains in power as a result of the health care bill:
The new health care law makes it mandatory that every American buy health insurance. The enforcer of this provision is the Internal Revenue Service, which will add 17,000 new auditors and accountants — all the better to function as a collection agency for private insurance companies. Individuals without “adequate” health insurance — a term that will be redefined yearly — will be subject to fines that will reach 2.5 percent of income by 2016.
Fortunately for the feds, it won’t be hard to collect those fines. The new law allows the IRS to seize your tax refund as payment.
It’s not just individuals that face new mandates and potential penalties from IRS enforcers. Businesses are also underfire, and as a result many will be looking for ways to avoid exposure, including reducing the number of employees. As Dr. Novack writes:
In those companies [that employ 51 people or more], if even one employee qualifies for subsidies as a result of “inadequate” company benefits, the business will be subject to a $2,000 fine for every employee working at the company, with an exemption for the first 30.
Penalties for other violations will be predicated on factors such as employees’ income and family size. Because of this, employers will have incentives to avoid certain kinds of applicants — single mothers, for example — since those employees could put the entire business at risk for significant fines.
To be safe, businesses likely will respond by moving more employees into part-time jobs to avoid having them “in the count.” Others may find it easier to shift to a contract work force, which will require more costly advice to comply with regulations cracking down on “1099 employees.”
Yes, fellow taxpayers, keep this in mind as you finish up the mind-boggling process of filing your taxes. It is only going to get worse—much worse—as a result of this new health care law.