ObamaCare really is the gift that keeps on giving. And giving. And I do mean “gift” in the German sense of poison.
Under the Affordable Care Act, premium subsidies—tax credits in ObamaCare designed to defray the cost of purchasing health insurance—will go to some seven million tax filers and flow to households earning as much as $94,000 a year.
The credits are both advanceable and refundable, meaning the IRS will pay them first and verify the claims for them later, what some call “pay and chase.”
Look at the Earned Income Tax Credit. Whether you like this refundable credit or not, the Treasury Department’s inspector general for tax administration reported in April that improper payments account for 21% to 25% of total EITC payments in 2012.
Take the percentage of improper EITC payments and apply it to the approximate $1 trillion we’ll spend on ObamaCare premium credits in the decade beginning 2014. The math shows that we could see between $210 billion and $250 billion distributed to those who shouldn’t get it—because the IRS has no system in place to verify reported household income.
The wealth redistribution train never stops. We’re entering a red reality where the system exists only to be gamed.