Chicago’s Exciting Xbox / Cloud Computing tax!

Well, it’s going to be exciting to everybody who lives outside of Chicago.

As of July 1, 2015, citizens of Chicago who enjoy their Netflix, Spotify, Pandora, Amazon Prime, Xbox Live, and/or PlayStation Network subscriptions are now subject to the city’s 9 percent “Amusement Tax” for the privilege. Further, should you decide to digitally rent a movie or videogame via these services, the 9 percent tax would be applied for every rental. In other words, Chicago now taxes its citizens 9 percent on their $99 annual Amazon Prime subscription because of its instant video/music service, plus 9 percent for each $3.99 digital rental through the same service. The same applies for rentals and music services offered directly from Microsoft and Sony. Fans of Sony’s PlayStation Network ecosystem are hit hardest: a 9 percent tax each on their PlayStation Plus subscription, PlayStation Music, PlayStation Now (videogame streaming), and Sony’s recently introduced PlayStation Vue live-TV service. Throw in other rental/subscription services such as Hulu, Gamefly, Google Play, HBO Go, iTunes, and Vudu, and you get a sense of the sheer breadth of this tax on Chicago consumers’ digital lives.

So, basically, avoid living in Chicago if you enjoy living in the 21st Century. Or working in it, because they’re also going to tax the cloud. That’s why everybody outside of Chicago is excited about this. It’s not every day that a major city decides to deliberately drive non-geographically fixed companies out to the suburbs.


“HealthCare.gov does not appear to be set up to detect fraud.”

I don’t know whether it matters if you score this as ten out of eleven, or ‘merely’ five: either way… Houston, we have a problem.

The nonpartisan Government Accountability Office says 11 counterfeit characters that its investigators created last year were automatically re-enrolled by HealthCare.gov. In Obama’s terms, they got to keep the coverage they had.

Six of those later were flagged and sent termination notices. But GAO said it was able to get five of them reinstated, by calling HealthCare.gov’s consumer service center. The five even got their monthly subsidies bumped up a bit, although GAO did not ask for it. The case of the sixth fake enrollee was under review.

The GAO’s sardonic conclusion of the problem (I don’t know if it’s a direct quote or not) can be found in the title of this post. But let us not pretend that successful fraudulent applications represent a flaw in the system: they are, in fact, part of the system. Lest we forget (which is admittedly hard to do): Obamacare is a government program.  In fact, it’s a government program that the current government is absolutely desperate to have succeed.  The only way to keep the whole thing from collapsing into a fetid heap of delayed verification is to approve any application that does not have HELLO, MY NAME IS [NAME] AND I WISH TO COMMIT TAX FRAUD scrawled across it in big, shaky red letters.

Huh.  The GAO should have done exactly that as a test, just to see how many of those would have gotten through.  Although, to be fair I don’t imagine that more than two out of eleven. Maybe three. Four if circumstances were perfectly aligned.

Moe Lane (crosspost)

PS: For extra horrified laughter: the administration informed GAO that the company running Healthcare.gov aren’t set up to detect fraud, but that there’s no meaningful level of fraud anyway so that’s all right. No, I’m not sure how they’re determining that, either. Maybe Tarot cards?

PPS: Good news, though: “The fake enrollees also got some perplexing instructions from HealthCare.gov. Eight of the 11 were asked to submit additional documentation to prove their citizenship and identity. But the list of suitable paperwork detailed documents for verifying income instead.” So at least anybody out there committing tax fraud will have to deal with just as much government ineptitude as the rest of us…


American poor does math, realizes that Obamacare tax is still cheaper than Obamacare.

From the I told you so section of the news comes a report that the Obama administration is having trouble convincing people to buy insurance, or pay a fine – despite the fact that they’ve extended the window to buy coverage.  Why? Well

This is the first year fines are being collected from uninsured people the government deems able to afford coverage. Tax preparation company H&R Block says the penalty averages about $170 among its affected customers. It usually is deducted from a person’s tax refund.

Those penalized are mainly the kind of people the law was intended to help: low- and middle-income workers who do not have coverage on the job or are self-employed. Roughly 4 million people are expected to pay fines, according to congressional estimates.

Basically, in June of 2014 CNN reported that the average monthly Bronze Obamacare payment after subsidies was $82, or $984/year. That is significantly more than the 2014 penalty. That’s also significantly more than the $325/year minimum penalty for this year.  Turns out that the administration miscalculated just how much of a deterrent the fine fine was; which is pretty much par for the course for this administration, huh? (more…)


Barack Obama’s Obamacare problem, in one tax form line.

And it’s a sockeldanger.

Line 6[1]: it’s official and the federal government has to admit it. The individual mandate is a tax. That means that changing it even by a penny is – no fooling, seriously, this is not something that you can just executive-order away – only possible via an Act of Congress. This will not happen (Obamacare was designed to keep Republicans out of the loop for as long as possible) which means that the current very low penalties for noncompliance are never going to get any higher.

Shoot, at the rate things are going paying the fine and getting insurance on your own will be a pretty good deal. Assuming, of course, that the Supreme Court doesn’t make the whole thing moot by declaring that the individual mandate is invalid in federal exchange states*.

Moe Lane

*Yup, Halbig. If the government can’t provide subsidies to a state that doesn’t have an exchange, effectively the mandate goes away for that state. Dang but the Democrats are bad at writing legislation, huh?

Written by in: Politics | Tags: ,

Dueling narratives on individual mandate tax enforcement. #obamacare

Shot (December 2013):

Despite his administration’s quiet move overnight to ease the individual mandate for some Americans, President Obama said today the requirement will “absolutely” be enforced starting April 1, 2014, when everyone must have health insurance or pay a fine.

Speaking at an end-of-year news conference, the president insisted that there will be no delay of the mandate as some Republicans have repeatedly called for.

Chaser (February 2014):

…it’s not clear that the IRS will deploy much in the way of resources to aggressively search for individuals who don’t get coverage this first year. Enforcement of the individual mandate likely will be a huge challenge for the agency, both because of the difficulties in figuring out who doesn’t have insurance and the political problems it would pose for the Obama administration.

“I’d be very surprised if there’s much in the way of enforcement. It just doesn’t seem plausible,” said Federal Policy Group Managing Director Ken Kies, a former top congressional aide. “The IRS is in a tough spot. They don’t have the resources to do this. This is a whole different responsibility for them they never had before.”



New York Post discovers the collapsing #obamacare individual mandate scenario.

(H/T: Hot Air) It’s nice to see this finally making the mainstream press.

[The Obamacare tax] tax will generally be far lower than ObamaCare premiums. That’s the clear conclusion of a new study by the 2017 Project, which compares premiums in the ObamaCare exchanges in the 50 most populous US counties to the tax that households could pay instead.

This year, that tax equals the greater of two numbers: 1) $95 per adult in a household, plus half of that amount for each child, up to $285 for an entire household, or 2) 1 percent of household income in excess of the tax-filing threshold ($10,150 for singles, and $20,300 for married couples).

So, for instance, a 31-year-old single man making $30,000 in Columbus, Ohio faces a tax of $198.50, more than $2,000 less than the cheapest option in Ohio’s ObamaCare exchange, even including his taxpayer-funded subsidy. For a 36-year-old San Diego woman making $40,000, the tax is $298.50, or nearly $2,400 less than the cheapest policy on the California exchange. She’s not eligible for a subsidy.



Is the best #obamacare exchange deal more than $400/year than your current plan? Then eat the tax.

The Las Vegas Review-Journal noted something in passing that struck me:

In California, for the Silver plans offered by Anthem Blue Cross and Kaiser Permanente, the monthly premium for a family of four is nearly $1,000. As one potential online enrollee tweeted, “It didn’t even show me Gold (plan). Probably figure I’d have a heart attack right there.” It did show the bronze plan, at a cost of about $750 per month — along with a whopping $5,000 deductible and out-of-pocket expenses of 40 percent.

It’s much the same in Nevada, with bronze plans ranging from $582 to $745 monthly, and deductibles as high as $6,300 with 40 percent out-of-pocket expenses. And regardless of whether you need an individual plan or a family plan, even with a subsidy, you are looking at a huge increase in premiums and out-of-pocket expenses, with stringent limits on care. Beyond the technical glitches, these plans don’t make financial sense for many individuals and families. It will make far more financial sense to buy a non-Obamacare compliant plan and pay the penalty tax. People will figure that out soon enough — and they won’t be happy about it.

(Bolding mine) In 2014, the Obamacare tax penalty will be 1% of taxable income above $10K.  Assuming a median household income of $50K, that means that if the price differential between an Obamacare-qualifying plan and an existing/potential non-Obamacare is more than $400/year, it makes sense to eat the tax (and vote Republican in November).  And apparently the government didn’t really take into consideration the possibility that rates were going to skyrocket enough in their Potemkin Village of a marketplace.


Quote of the Day, How The Next Few #Obamacare Months Will Go edition.

This sounds about right:

Right now the White House is in carrot mode, trying to sell “young invincibles” on the glories of health insurance. But the carrot doesn’t work on everyone: According to Gallup, more than 30 percent of the uninsured were unaware this past week until they were polled that they’re now required by law to buy insurance. As we get closer to December and the need grows more urgent for a big pool of new revenue to cover those with preexisting conditions, the White House is bound to shift from carrot to stick. I’m curious to see how they play that. They’ll hammer the fact that it’s ILLEGAL not to have insurance if you can afford it and that the TAXMAN will make you pay a FINE if you don’t, but they might not emphasize too much that the fine (for this year at least) is the higher of just 95 bucks or one percent of your income. If a thousand Obama speeches on how awesome ObamaCare is can’t create a groundswell of enrollment, maybe strategically vague warnings implying that the IRS might kick down the door will do it.



Should you pay the #obamacare tax? Crunch the numbers for yourself!

Here is a handy chart for individuals looking to calculate their Obamacare tax.  I’m putting it up because there’s a bit of confusion out there over how much people can expect to be taxed.  For example: the $95 or 1% rule is on taxable income, not total income. This means that you have to subtract $10K currently to determine how much the government will tax you for not having health care, which of course removes $100 from your final yearly tax obligation.  For some strange reason the administration isn’t too keen in letting people know just how small the tax is going to be for young, unmarried workers.

Crazy, huh?

Anyway, below is the chart, based on the data found here.  Remember, the final tax will be the higher of the flat rate, and a percentage of adjusted taxable income; everybody’s getting hit with this. (more…)


Obamacare is a tax on employment.

Here, let me help wreck your weekend for you.

Postulated: If you wish to see more of something, you subsidize it; if you wish to see less of something, you tax it. I assume that we are all on board with this, yes? – After all, this has been a major point used to justify sin taxes for, well, my entire life. In other words… “tax it out of existence” is a sentiment that is not exactly unique to this post.

Which leads to this observation from Andy Puzder, head of the company that operates Hardees and Carl’s, Jr:

About 40% of [CKE Restaurants CEO Andy] Puzder’s employees are part-time and therefore exempt from ObamaCare’s coverage mandates. “That percentage of employees will probably go up. Everybody is hiring more part-time employees,” he says, though he is quick to add that “we’re not firing anyone to hire” part-time workers. “Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours.”

Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. “You’re going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don’t have to pay benefits for any of those things.”



Obama administration silently discontinues tracking taxpayer migrations.

I recognize that this news from the National Review is a bit of a disaster for political scientists:

As the din of America’s falling headfirst over the fiscal cliff reverberates across the nation, the Obama administration is quietly killing a key economic metric that tells how, and how many, people are voting with their feet. Since 1991 the Internal Revenue Service has been compiling statistics on filers’ addresses, which the agency’s Statistics of Income division uses to show who is moving into and out of every county and state in the nation. As you’d expect, the IRS also knows the aggregate income levels of those who move. So the movements of the most fundamental productive components of the economy — taxpayers — can be analyzed by journalists and economists, or could until now.

The IRS and the U.S. Census Bureau (which provides technical support in reporting tax migration data) have not made an official announcement as to why the program is being discontinued.


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