Happy Labor Day! Now on to the post:
While the details of any health bill are still being hammered out, there will be one certain outcome of any bill: the IRS will have a whole lot more power.
Here is a laundry list of the (likely) new powers Congress will bestow upon the Service should any health care legislation pass:
1) You will have to report your health insurance status to the IRS;
2) Your insurer will have to report your health insurance status to the IRS (you thought they would trust you?);
3) The IRS will be responsible for fining you if you fail to purchase adequate insurance;
4) The IRS will be responsible for administering a web of subsidies and tax credits to help low-income individuals obtain health insurance, including releasing your tax information to a central authority who will determine if you are eligible for those credits and subsidies.
That last point is one of the scarier ones. If you thought having Progressive Auto Insurance watching you from the skies was unsettling, just imagine your earnings history, address, social security number, and any other juicy tax tidbits suddenly finding themselves spawned across several government computer systems.
But that's not all! Not only will your information be spread throughout the "system," but the government is also planning to use your tax returns to advertise other government services to you:
In H.R. 3200, the IRS would be required to provide taxpayer information to the Social Security Administration for the purpose of helping Social Security officials find qualifying seniors who can then be encouraged to enroll in the prescription drug program. 'There is no precedent for using taxpayer information for the purpose of identifying people to go out and advertise to them,' says the House expert.Should your information really be used this way? Tax returns have generally been treated with a high degree of confidentiality. This confidentiality seems reasonable considering that everyone is required to provide their annual earnings information to the government (Tip: Your 1040 is not optional). Essentially, the government acknowledges they are invading your privacy, but in exchange, they promise to keep your information safe (theoretically). Maybe we are witnessing the end of that grand bargain.
Check your mailbox, the government may have sent you a notice indicating that you are eligible for their cheese.