By Paul Kersey -
“Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” — Judge Learned Hand, Helvering v. Gregory
In his latest attempt to improvise a solution to one of the many, many problems created by the Affordable Care Act, President Barack Obama delayed, yet again, the implementation of the employer mandate for some businesses. But in the process he added a very troubling twist, one that reeks of censorship, and aside from that is probably illegal.
In spite of the clear wording of the Affordable Care Act, the president on his own delayed enforcement of the employer mandate for companies with 50-99 employees until 2016. This is the second time the mandate has been postponed. It originally was supposed to take effect this year, meaning any employer with 50 or more full-time workers, or their equivalent, was supposed to provide qualified and affordable health insurance or face a possible penalty.
But there’s a catch – to qualify for the delay, employers are expected to certify as part of their tax returns that ObamaCare was not a factor in their decisions to keep their staff below 100 people. Otherwise, those employers will still be subject to the employer mandate and all the expenses or penalties. This might involve some sort of affidavit, or there may be an entry added to tax forms, but either way employers will be put in a very difficult position legally.
The catch seems designed to silence employers by eliminating their ability to say that ObamaCare is preventing them from hiring or forcing them into laying off workers. If any of them did, the administration will be able to pull out their tax return and hit them with the employer mandate penalties, or prosecute them for perjury, or both.
Using taxes as a tool for censorship like this is atrocious, on top of its potential illegality.
Like much of ObamaCare, the employer mandate is essentially a tax – the whole thing is administered by the Internal Revenue Service as part of the federal tax code. And it is pretty much settled law – going back to 1934 and the case of Helvering v. Gregory, taxpayers are allowed to account for taxes as they go about their affairs. As long as they don’t commit fraud, taxpayers are not expected to make arrangements that will increase their taxes. And that only makes sense – otherwise the tax collector would be free to look over our shoulder and tell us how to run our daily lives and increase the government’s tax revenue in the process.
The administration might argue that this is a special sort of tax provision – one that is expressly only available to taxpayers who aren’t trying to qualify for it. But that would be extremely novel, and allowing that to stand would open up the door for more intrusion by tax collectors.
Employers should not have to say whether ObamaCare was a factor in their decision to hire more workers. In fact, an employer should be able to say “I can’t afford to offer health insurance and I didn’t want to pay penalties, so of course I held off on hiring more people on account of the Affordable Care Act” – and attach that statement to its tax returns.
There is no patriotic duty to pay higher taxes. Neither is there any patriotic duty to avoid causing this administration further embarrassment over the debacle that ObamaCare has become.
Paul Kersey is Director of Labor at the Illinois Policy Institute