There seems to be a pattern developing with the IRS.  It’s abusing its power again.  After targeting tea party groups and stealing millions of medical records, the IRS is now illegally enforcing portions of the ACA in states which refused to set up a state run insurance exchange. Michael Gerson in his Washington Post piece and David Catron in the American Spectator explain the latest IRS impropriety.

The ACA calls for state run exchanges to sell government approved health insurance. Since the federal government cannot force states to set up an exchange, the law offered states various incentives to do so by way of premium subsidies and tax credits. Even with these carrots, 33 states refused to set up exchanges, and so the federal government was left with the task.

The refusal of the rogue states to create exchanges created a sticky situation for the Obama administration because it needs state run marketplaces to fully implement Obamacare.  The law allows for subsidies and tax credits only in states which run their own exchange. Without these subsidies, a significant number of Americans will be unable to afford insurance, especially given the increase in premiums Obamacare has brought about.  As an additional affront, the subsidies and tax credits lead to the enforcement of the employer, and in some cases, individual mandates.  Without the mandates and the associated fines, there is no incentive for companies to comply with the ACA.

But, a silly little thing like the rule of law is no problem for the IRS.  In a May 2012 regulatory ruling, the IRS interpreted the ACA to allow for the issuance of tax credits and subsidies in states with a federal exchange.  The ruling also enables the IRS to fine employers who do not comply with the employer mandate.  Michael Gerson points out, “The IRS seized the authority to spend about $800 billion over 10 years on benefits that were not authorized by Congress.” And, through its illegal enforcement of the employer mandate, the IRS will tax employers without the consent of Congress.

Jonathan Adler and Michael Cannon provide a comprehensive analysis of what they refer to as the “three legged stool” of price controls, tax credits and insurance mandates that are connected to the Obamacare exchanges.  This report is a must read for anyone who wants to fully understand the complex workings of the carrots and the sticks that are all necessary to hold the straw house that is Obamacare together.

The IRS illegality is not going unnoticed by states and businesses.  The State of Oklahoma has challenged the ruling and a group of small businesses has filed suit in the U.S. District Court for the District of Columbia.

Ohioans should not let the illegality slide either.  We said no to the Obamacare exchanges and we can not sit idly by as the IRS ignores our stance.  Attorney General Mike DeWine stood strong against the ACA when he joined suit with 26 states to fight the Obamacare mandates.  Will he join with Oklahoma against Obamacare’s latest power grab to protect Ohio businesses?

And how about our Governor, State Reps and State Senators?  Will they remain silent as they implement their own pet Obamacare policy, Medicaid expansion?

Call your representatives and let them know about the IRS’ illegal enforcement of the employer mandate in Ohio and the illegal issuance of tax credits and subsidies for the Obamacare exchanges. Ask your representatives to protect Ohio from the federal government’s massive abuse of power by saying “No” to Obamacare’s Medicaid expansion.  If more states stand strong against Obamacare, the greater chance we have to slay the dragon it has become.

Additional reading:

Michael Gerson’s Washington Post article.

David Catron’s American Spectator article.

Jonathan Adler and Michael Cannon’s report:  “Taxation Without Representation:  The Illegal IRS Rule to Expand Tax Credits Under the PPACA”