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Mehrens: Courts Must Stop Obamacare’s Taxation Without Representation

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President Obama’s socialized medicine law has a big problem on its hands — something much more serious than a botched website or a broken political promise. And while some say it’s nothing more than a “technicality,” the court case over this “glitch” is moving forward even as most of the mainstream media looks the other way.

“This is for all the marbles,” George Mason University professor Michael S. Greve wrote.

“This has the potential to sink Obamacare,” Cato Institute health policy expert Michael Cannon told The Los Angeles Times.

The case they’re referring to is Halbig v. Sebilius, filed in May by seven plaintiffs (four individuals and three companies) in U.S. District Court in Washington, D.C. At the heart of this case is a simple question: Does the federal government have the right to tax and spend $700 billion worth of health care subsidies in the thirty-four states which declined to create state-administered health care exchanges under Obamacare?

Under the specific language of the law, tax subsidies (and tax penalties) on individuals and employers only apply in states that created these exchanges. It’s right there in black-and-white — as the availability of subsidies was expressly confined to qualified plans enrolled “through an Exchange established by the State.”

Obamacare makes no mention of these subsidies being provided in federal exchanges.

At the time the law was being drafted this wasn’t seen as a problem. The President and his allies believed the allure of more “free money” from Washington would be sufficient to entice states into doing their bidding. However when it became clear this wasn’t happening, the Internal Revenue Service scrambled to issue a “rule” extending the subsidies to all states.

The rub? This IRS rule explicitly contravenes the language approved by Congress — and signed into law by Obama himself. Not only that — to quote from Halbig — it “(disburses) monies from the Federal Treasury in excess of the authority granted by the Act.”

And at $700 billion, we’re talking about the single largest instance of taxation without representation in human history.

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Nathan Mehrens is president of Americans for Limited Government.

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