ObamaCare’s Special Set of Problems at Tax Time

Many people awarded insurance subsidies for 2014 did not realize that the amount would be reviewed and recalculated at tax time in 2015.Consumers are sure to have questions, but cannot expect much help from the tax agency, where officials said customer service had been curtailed because of budget cuts.

Robert Pear, “White House Seeks to Limit Health Care Tax Problems,” New York Times, January 31, 2014

At tax time, April 15, 2015.the White House is going to have a big problem – how to quell anger of 6.5 million taxpayers who received subsidies through health exchanges in 2014 and who learn they owe more to the government.

April 15 will pose a special set of problem for America’s liberals. In the words of Ross Douthat of The Times, the problem will be " liberalism’s ongoing inability to raise the taxes required to pay for the welfare state we already have.” (“Out Loud, Proud Left,: NYT, February 1, 2014).

Nobody likes paying taxes, especially when,

• the taxes are taxes they didn’t expect;

• they are part were part of a group who can’t afford to pay more, which is why received subsidies in the first place;

• they learn they must report what happened to them month to month rather than yearly;

• they expected subsidies to pay for health care and instead received penalties, often in the thousands and dollars;

• they cannot get answers from the IRS;

• half of their phone calls to the IRS are not returned;

• they have to wait 30 minutes or more when the calls are returned;

• they have to fill out IRS form 8962, which consists of 12 rows with six columns containing a total of 72 boxes to check.

• they may qualify for 30 exemptions depending on in which state the live but requiring evidence to see if they qualify;

• they must know which of 5 health plans categories, such as gold, silver and bronze, based on how generous the coverage is, but to do so, they must calculate their tax credits, the cost of their own policies,he cost of a benchmark plan, the second-lowest-cost silver plan, the premium for the lowest-cost bronze plan in the area in 2014.

If this all sounds bewildering, it is because it is. And it is likely to whip up anger among those who thought they were among the special few who profited from government largesse. It comes at a price. This price, and the level of anger, may be even higher in June, if the Supreme Court rules it was illegal for them to receive subsidies. Then we will learn the truth of Oliver Wendell Holmes, Jr’s aphorism: “Taxes are what we pay for civilized society,”even though it may seem uncivil at times.