Latest Pajamas Media Column (‘Should Grandma Get Divorced? ObamaCare Says So’) Is Up (Update: IRS As The Marriage Police)
Its subheadline better previews the column’s full content:
By additional taxes and fees, and by sliding subsidies, ObamaCare introduces powerful incentives against job creation, personal success — and marriage. Is this really good for America?
It will go up here at BizzyBlog on Monday morning (link won’t work until then) after the blackout expires under the title “Earn More, End Up With Less, and Even Fork Over Your ‘Wealth.’”
Left on the Cutting Room Floor:
This table, which is a combination of two tables originally created at the Heritage Foundation by Senior Research Fellow Robert Rector, forms the major backing for the column:
The column concentrated on the incentive-killing effects of ObamaCare’s sliding subsidies, most obvious in the orange boxes (where the loss of subsidy is 80% of a $5,000 income gain achieved by a two-income, equal-earning couple) and the purple ones (where it’s over 100%). In both cases, other taxes such a couple would have to pay (Social Security, Medicare, and federal, state and local income taxes) would cause them have less disposable income after earning $5,000 more ($2,500 each).
All indications are that these “brackets” aren’t indexed, meaning that we would be back to the subsidy equivalent of the tax code’s pre-Reagan “bracket creep” — on steroids.
The marriage penalty, i.e., the subsidy lost by getting married or staying married, is so obvious and so punitive as displayed in the table that I didn’t directly discuss it in the column. The worst example on the table above is a 60 year-old couple earning a combined $60,000. Such a couple would get no annual subsidy if they got or stayed married and a $10,425 subsidy if they divorced and stayed together or cohabited indefinitely.
Ah, but the law in most states says that you can’t cohabit indefinitely and still claim not to be married, which gives rise to the following not-unrealistic scenario:
- A government starved for money notices that the percentage of people reporting themselves as “married” has declined steeply and that the number of couples living together has grown in tandem.
- Reminding itself of state laws that treat couples as “married” for legal purposes if they live together for typically seven years, the Internal Revenue Service is tasked with finding cohabiting couples and divorced couples still living together “illegally” claiming that they are not married for health care subsidy purposes.
- Those caught and punished by the IRS carrying out its new role as the de facto “marriage police” could get socked with multi-year bills for “undeserved” subsidies running into tens of thousands of dollars (plus, of course, penalties and interest).
16,500 new IRS agents won’t be anywhere near the number needed to enforce the ObamaCare regime.