Another unintended consequence but this time it hurts the government

Here is another unintended consequence of Obamacare but this time it hurts the government. The IRS is tasked to enforce compliance with Obamacare by assessing a penalty tax upon taxpayers who do not have compliant health care. But the only way they can collect this penalty is to take it from tax refunds.

People who decide that the penalty makes the most economic sense for them will quickly realize that they can even avoid the penalty by making sure that they are not getting a refund. Since many people customarily overpay their taxes as a form of “zero-interest savings account”, they will realize that they should no longer continue this custom.

Thus the government will lose a signifiant source of interest-free funding from those who have up until now willingly overpaid their income tax withholding.

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    • Steve
    • December 17, 2013

    This is exactly what young people are telling me in open enrollment meetings. This will be a total shock to the IRS and is just one more messed up consequence of this bloated bill.

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