Refundable Tax Credits Surge : ObamaCare Subside Multiplies $

 Oh my gosh - did Mr Obama and the progressive socialist democrats lie to us again or are they just telling more lies about what they intend for us? The total cost of ObamaCare was projected to be less then 1 trillion over ten years, but the CBO says it will more like 2.3 trillion.

And the progressive socialist democrats didn't now this while they spent more the 8 years designing t this monstrosity? Please. multiplies

Refundable Tax Credits in ObamaCare
Source: Alan Cole, "Changes in Refundable Tax Credits," Tax Foundation, March 11, 2014.
March 21, 2014

Refundable tax credits are projected to double due to subsidies in ObamaCare, says Alan Cole, an economist at the Tax Foundation.Tax credits allow taxpayers to reduce their tax liabilities. Refundable tax credits, however, allow refunds beyond the amount of taxes paid in. Basically, they can result in a transfer of funds from the government to the taxpayer.

What are these refundable credits? The most well-known are the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit, each available only to taxpayers with incomes below a certain threshold.

• In 2009, the amount of refundable tax credits peaked at more than $120 billion.
• In 2011, the IRS paid $99.1 billion in refundable credits. That is more than the Department of Education spends each year ($71.2 billion).
• The EITC pays out $65 billion per year, and the Additional Child Tax Credit pays out slightly less than half of that amount -- $30 billion per year.

The ObamaCare subsidies for low-income purchasers of insurance are the newest form of transfer payment. Due to these subsidies, the dollar amount of refundable credits is going to skyrocket.

• When an individual signs up for insurance, the IRS calculates the subsidy amount and will send that amount directly to the insurance company, leaving the rest of the premium to be paid by the individual.
• However, the enrollee is required to estimate his yearly income when he signs up for insurance, before the year has actually concluded. This is going to be difficult for someone who has several temporary jobs and lacks a steady income stream.
• If he underestimates his income, the IRS requires repayment. However, the law caps the amount of required repayment. For a family of four earning 250 percent of the federal poverty line, the most that the IRS can get back is $1,500, even if much more is actually owed. This incentivizes people to underestimate their income in order to get higher subsidies.
• The Joint Committee on Taxation estimated in February 2013 that the subsidies would reach $96 billion by 2017. In its latest economic outlook, the Congressional Budget Office projected the figure at $118 billion.

Refundable tax credits only make the tax code more complex while favoring certain activities over others. Moving refundable credits outside of the tax code and into spending programs would make more sense.