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The ObamaCare Fraud
...When the government hands out subsidies, it will use a household’s income in the previous year as the basis for guessing what the household is qualified to get in the current year. But if the household’s income grows midyear, the subsidy recapture provision will require it to repay anywhere from $600 to $3,500, compared to the $450 that the law originally called for.

This will make it very hazardous for poor working families to get ahead. In the original law, the loss of subsidy with rising income already meant absurdly high effective marginal tax rates—the implicit tax on every additional dollar of income earned. How high? The Cato Institute’s Michael Cannon puts them at 229 percent for families of four who increase their earnings by an amount equal to 5 percent of the federal poverty level or $1,100. In other words, a family that added this amount to an income of $44,700 would actually see its total income fall by $1,419 due to the loss of subsidies.

The subsidy recapture provision—essentially a tax collection scheme—means that low-wage, cash-strapped families will have no escape from these perverse tax rates. Many of them will find themselves owing the government thousands of dollars in back taxes. Since it is unlikely that they will have this kind of money sitting around, they will face a massive incentive to either fudge their returns or work for cash to avoid reporting additional income. Either way, Uncle Sam will come after them, just as it does with recipients of the Earned Income Tax Credit, the negative income tax scheme that is the inspiration behind Obamacare’s subsidies. In 2004, EITC recipients were 1.76 times more likely to be audited than others, no doubt because it is easier for the government to recover unpaid taxes from poor people than “lawyered up” rich people. In other words, Obamacare will first create the temptation for low-income families to commit fraud, and then penalize them when they do....