Thanks for the response. As it happens, I have an unnatural sort of interest in the “ordering rules” that Congress almost always fails to think of enacting when passing tax legislation. (For instance, if you have $100,000 in losses from a partnership but can deduct only $30,000 of them because that’s all the outside basis you have, and your loss is made up of ordinary losses, capital losses, 1231 losses, etc., etc., how do you decide which losses are limited first?) That leaves the matter to regulations or, perhaps, revenue procedures, which can go all sorts of ways. It gets amusing when an activity is subject to more than one set of ordering rules, and they’re different from each other, creating a need for rules for ordering the ordering rules.

You do occasionally see ordering rules that reflect some drafter’s clear intention to stick it to taxpayers by adopting the rule likely to hurt most people the most, but not often. There really isn’t any overall pattern.

The way I see it, the only place Sen. Baucus is a hero is in Bizarro World!

Is there something you can cite to support your position that the Service will apply amounts paid toward the health-care penalties first? This is possible, given the way the law is written, but I had understood, perhaps wrongly, that the Service had announced that it would treat payments just the other way (i.e. “real taxes” first), and your comment is the first time I’ve seen a claim to the contrary.

I’m not saying you’re wrong; just that I’d like an authoritative citation.

The individual insurance market in new York State collapsed because there is no way to socialize the high cost for those seeking such insurance. That socialization is a byproduct of large employer plans but not in small-employer plans or individual coverage. Something had to be done. A Canadian system makes more sense than what was enacted, but the legislation had to accommodate to the stupidity of Americans and to the extremism of the evil right-to-life movement.

I wish that medical malpractice cases be totally eliminated and that birth control, including abortion, be subsidized. But that was not going to happen. So the heath bill is about as good as it could be. Senator Baucus is a hero.

Let’s say you owed $1000 in taxes and $500 for the health care premium. (Totally arbitrary numbers.) You sent in a check to the IRS for $1000, specifically stating that it is to be applied to payment of the tax portion of the bill and is not to be applied to health care premium. The IRS says sorry, takes your $1000 check, applies $500 of it to pay your health care premium, applies the remaining $500 to your tax bill, and you are now delinquint on your tax bill by $500. Failure to pay it when due results in penalties and eventually jail time. You aren’t being jailed for failure to pay health care premium, you’re being jailed for failure to pay taxes.

Suppose instead you are due to get a tax refund of $1000, but owe $500 for health care premium. Your check from the IRS will be $500. End of discussion as far as the IRS is concerned.

This legislation was very carefully crafted to make payment mandatory, without saying it was mandatory. Why do you think the enforcement part went to the IRS?

Remember the Stupak subterfuge where “no taxpayer money would go to funding abortion?” These politicians are truly evil, doing and saying whatever they can to get us to give them what they want. Oh, but they weren’t lying, they just didn’t quite tell us the whole truth.

As most people can adjust their withholding or estimated-tax payments to make sure that they will not get a refund, this means in practice that the supposed mandate is fairly easy to avoid. This, in turn, probably means that the whole system will collapse, because many of the required features of health insurance under the new law, such as no coverage denial for pre-existing conditions, will make that insurance extremely expensive unless healthy people can be forced to buy it. Whether this result was intended is unclear. So far as I can tell, the provisions of the new law limiting the enforceability of the penalties was never discussed in public until after the act had passed.

“This country has shed more blood for the freedom of other people than all the other nations in the history of the world combined, and I’m tired of people feeling like they’ve got to apologize for America.”

Awesome and true. and ironically made long before Obama began his apology and boot licking tours.