Obamacare is going to make the IRS our healthcare enforcer, Byron York correctly explains.
And Mitt Romney ought to hammer President Obama on this ugly reality when they debate tomorrow.
As York reports, full implementation of Obamacare means that the IRS will be deciding whether American taxpayers are fulfilling the Obamacare mandate of buying “qualified” health insurance. If not, the IRS can collect the penalty for noncompliance by witholding the tax refunds that many Americans have come to expect.
“About three-quarters of U.S. taxpayers receive refunds after filing their returns each year, with the average refund nearly $3,000,” York reports. “After 2014, those people will discover the IRS can take the penalty out of their refunds.”
Romney should hammer Obama about this little-known thuggery but before he does, we have a serious question to ask:
Why are so many people getting refunds?
If you get a refund from Uncle Sam, it means you paid too much in taxes for the prior year. Why should any taxpayer do that?
York is saying that most taxpayers are in this situation, and that the overpayment is a serious chunk of change, on average $3,000.
But why is this the norm? Overpayment is bad for the taxpayer because it means more of your hard-earned money went to the government till before the bill was due. Much better instead for the taxpayer to keep his money, ideally saving or investing it so that he can earn some interest before handing it over to the government for tax payment.
A modest proposal then: Serious tax reform should include consideration of a plan to stop taking taxes at source. Earn your money in full and then pay it to the IRS.
There would be two great benefits to this system. First, more Americans would understand what they pay in federal taxes because they would be forced to deduct it from their bank accounts themselves. And second, the government would be forced to go on a serious diet seeing as tax collection would actually happen on April 15 rather than throughout the year as happens now.
A better system for taxpayers and a better system for the government.
Keep all your money, all year and pay the IRS once on April 15.
Wonder whether Obama or Romney would support our idea?