by Mitch Kokai
Senior Political Analyst, John Locke Foundation
At least one group likes the 2010 federal health care reform law. Bloomberg Businessweek explains that tax preparers are looking forward to Obamacare’s implementation.
Ana Maria Costanza likes the Affordable Care Act—a lot. “I read the whole 900 pages,” the H&R Block (HRB) tax preparer exclaims happily in a TV ad. “It literally took me weeks.” Most people have a different reaction to the thought of wading through new government regulations, and that’s the point. “I know the law,” Costanza tells the camera with a big smile, “and I can help you figure it out.”
Tax-prep companies have long looked for ways to diversify their businesses, and Obamacare may be the perfect opportunity. H&R Block is pitching what it calls a tax and health-care review so customers can be ready when the law’s income-based subsidies begin kicking in next year. Uninsured Americans will need to figure out whether they qualify for the insurance subsidies, how much they could receive, and whether it makes more financial and medical sense to get coverage or skip it and pay the penalty for violating the law. The group of taxpayers eligible for the subsidies—families of four earning between $31,000 and $94,000 a year—falls right into the sweet spot of storefront tax preparers. “This is an intersection that uniquely positions us to respond to their needs in new ways,” says Meg Sutton, senior adviser for tax and health-care services at H&R Block.
Those who read the article and cheer the potential stimulus to economic activity associated with the tax preparers’ new work ought to acquaint themselves with the details of the broken window fallacy.