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It Should Be Repealed Anyway

A report from the Treasury Inspector General for Tax Administration found that ObamaCare’s medical device tax generated about $300 million less than what was expected.  The IRS expected that it would take in $1.2 billion from the tax in the first half of 2013; it actually received about $913.4 million.

Government agencies usually employ “static scoring” when they estimate the effect of tax changes.  That it, they assume that a tax increase or tax cut will have no impact on people’s behavior.

According to an article at California Healthline:

The report also noted several mistakes IRS had made in collecting funds owed under the tax. Although electronic tax returns automatically check to make sure taxes paid match the amount of a company’s reported medical device sales, IRS does not have a similar system in place to check paper returns, according to the report. Specifically, the report found 276 errors in the 5,100 collected forms, resulting in discrepancies worth $117.8 million

Hmmm…I wonder how many companies switched from filing electronically to using paper form?  In other words, how many changed their behavior to lower their tax liability?

The tax should be repealed anyway.  For more on that, see NCPPR’s study on this from April 2013.

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