Not only does 36B clearly state that eligibility for the subsidy requires enrollment in an exchange "established by the State," but it also specifically cites 1311, the section of the bill dealing with state exchanges. Federally-run exchanges are authorized by a different section that is never mentioned anywhere in 36B. There is zero basis in the law for the IRS's claim that section 36B authorizes credits in a federal exchange.
Moreover, because employers can be taxed $3000 per subsidy-eligible employee, the IRS is literally attempting taxation without representation. The new IRS Tax will whack companies in states that already opted out and therefore shouldn't lawfully be taxed.
It's an affront not just to principles of federalism but to the very first thing our founders put in the Constitution after the famous "We the People" preamble. Article I, Section 1 states: "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
It doesn't say the power to write and rewrite laws is vested in HHS and IRS, or that unelected bureaucrats can impose taxes on states that legitimately opted out of a federal program.
Fortunately, the Senate is expected to vote on overturning this outrageous IRS dictate and protecting the right of states to opt out of President Obama's new health care subsidies and employer taxes. The vote, under the Congressional Review Act, will be protected from filibuster and will therefore require just 51 votes to overturn the IRS dictate.
This Senate vote will tell us whether each U.S. senator supports the rule of law and our federalist system or believes IRS bureaucrats should be allowed to govern by dictate, even to impose their own taxes. Citizens whose senators are up for election this year should watch closely and consider whether senators who would outsource such power to the IRS deserve to stay in the Senate.
Phil Kerpen is president of American Commitment, a columnist on Fox News Opinion, chairman of the Internet Freedom Coalition, and author of the 2011 book Democracy Denied.
American Commitment is dedicated to restoring and protecting America’s core commitment to free markets, economic growth, Constitutionally-limited government, property rights, and individual freedom.
Washingtonian magazine named Mr. Kerpen to their "Guest List" in 2008 and The Hill newspaper named Mr. Kerpen a "Top Grassroots Lobbyist" in 2011.
Mr. Kerpen's op-eds have run in newspapers across the country and he is a frequent radio and television commentator on economic growth issues.
Prior to joining American Commitment, Mr. Kerpen served as vice president for policy at Americans for Prosperity. Mr. Kerpen has also previously worked as an analyst and researcher for the Free Enterprise Fund, the Club for Growth, and the Cato Institute.
A native of Brooklyn, N.Y., Mr. Kerpen currently resides in Washington, D.C. with his wife Joanna and their daughter Lilly.