Good morning and welcome to today’s hearing on the Internal Revenue Service’s implementation and administration of the President’s health care law.
Before we begin this morning, it is appropriate to recall that eleven years ago, almost to the hour, our nation was savagely attacked. After these 11 years, each of can recall exactly what we were doing at that time. The horror of the day should make us resolve to continue doing our business and demonstrate that we won’t be intimidated or deterred. More than a decade has passed, but the attacks of that day still outrage, the tragedies still overwhelm, and the heroism still inspires us. We still mourn those lost on that day, and all those that have given their lives since in defense of liberty. And we are thankful for those who continue to stand and volunteer to serve our country both at home and abroad.
The Internal Revenue Service has enormous responsibility – it is tasked with administering our convoluted tax system and a tax code that has changed nearly 5,000 times in the past ten years alone. The agency is charged with collecting roughly two and a half trillion dollars, distributing hundreds of billions of dollars in tax credits, and enforcing 4,000 pages of tax laws and 80,000 pages of tax regulations.
The agency’s core revenue collection function has increasingly been crowded by its responsibility to administer many social programs. Through the years, Congress has sought to advance a multitude of non-revenue objectives through the tax code – energy policy, housing policy, and of course health care policy. Making the IRS both revenue collector and administrator of these activities has diverted IRS resources from its central mission and can diminish taxpayer service.
In 2010, the Congress passed President Obama’s health care law. Spanning nearly 1,000 pages and passed “so you can find out what is in it,” in the famous words of then-Speaker Nancy Pelosi, the health care law contained 47 separate tax provisions and charged the IRS with vast new responsibilities. These included the implementation and administration of the largest entitlement created in more than a generation, new penalty taxes on individuals and employers who fail to buy or provide government-approved health insurance, the need quickly create vast new information technology systems, and the list goes on and on.
The President’s health care law has put the federal government in charge of approving health insurance plans, subsidizing them, punishing those who do not buy government-approved plans, and many other aspects of our health care system. And the Internal Revenue Service has been saddled with the responsibility of carrying out many of these new federal activities.
More than creating new burdens on the Internal Revenue Service, the President’s health care law has led to new tax rules and regulations that will pose significant challenges to both individuals and job creators. The Administration’s own documents state that the compliance burden of the new rules it has thus far written to pursuant to the President’s health care law will add nearly 80 million man-hours each year to individuals and job creators. 80 million hours that won’t be spent creating new wealth, providing health care, or doing anything productive. 80 million hours simply complying with new rules from Washington. This is the burden from just the IRS’s new rules, when you add the new regulations from HHS, the Department of Labor and other agencies, the burden on our sluggish economy goes still higher.
As a former surgeon and owner of a small medical practice in Louisiana, I know first hand how taxes, rules, and regulations from Washington can impede not only a small business, but also patient care, so I am especially interested in hearing from the IRS and our witnesses today about the how the new law will operate in the real world.
The object of this hearing is to assess the IRS’s efforts to administer the law, including its effect on the Service’s core mission, and how the decisions made now to implement it will affect both the agency and taxpayers as the law’s provisions continue to come into effect. This is also not a hearing to beat up on the IRS – an agency run by good men and women, dedicated public servants who have an incredibly difficult job. The agency did not write the health care law – the previous Congress did. They passed it, and now we are finding out what is in it and what it means for the country, for the Internal Revenue Service, and for taxpayers.