The IRS rule allowing Obamacare subsidies to flow through federal exchanges in states that refuse to establish their own flies in the face of the plain language of the statute and is likely headed to court.
“Obama’s law allows state-run exchanges to offer the tax credits and assess the penalties integral to Obamacare, but there’s no language authorizing the feds to perform the same function.”
“The exchanges will cost money to run, but the text of the law only authorizes state-run exchanges to collect the cash and disburse the tax credits which are essential to the functioning of Obama’s law.”
“Michael Cannon, director of health care policy studies at the Cato Institute, said the missing language explains a last-minute Internal Revenue Service (IRS) rule change—a revision he maintains is illegal, designed to collect cash for federal exchanges that are otherwise unfunded.”
““It’s called taxation without representation,” said Cannon. “It’s called taxation without congressional authorization.””
““There is no funding in Obamacare for a federal exchange—none,” Cannon said.”
“The Congressional Budget Office estimated that in the unlikely scenario in which no states create exchanges, the operation of federal exchanges could cost the government $1 trillion or more over the next decade, offset by roughly only $172 billion collected from penalties.”
http://news.heartland.org/newspaper-article/2012/11/01/obamacare-tax-credit-issue-could-head-courts