IRS Rewrites ObamaCare to Increase Taxes

First the Supreme Court rewrote President Barack Obama’s signature health reform law to save it from the Constitution. Now the Internal Revenue Service claims its new rule can interpret the law in a way that violates its text and history.

The latest outrage against common sense is an IRS rule finalized on May 23. The rule makes tax credits available to participants in federally run health insurance exchanges created under the Patient Protection and Affordable Care Act (aka ObamaCare). But while Section 1311 of ObamaCare allows tax credits to certain people in state-run exchanges, Section 1321 – the section regulating federally run exchanges – does not.

Nevertheless, the new IRS rule specifies that tax credits will be available through exchanges “established under section 1311 or 1321” of ObamaCare.

By rewriting ObamaCare without statutory authorization, the IRS is engaging in an illegal power grab that will cost taxpayers billions.

As regulation experts Jonathan Adler and Michael Cannon explained in testimony before Congress, one of the central arguments used to promote ObamaCare was that passing it would not add a penny to the federal deficit.

The ability to make that argument was based on shifting the cost of creating and running the health insurance exchanges onto states.