Texas, Kansas, and Louisiana Sue Federal Government Obamacare Tax

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The states of Texas, Kansas, and Louisiana filed a lawsuit today against the federal government over the unconstitutional tax that funds Obamacare. The Plaintiffs complain of the federal government’s actions in implementing the portions of the Patient Protection and Affordable Care Act known as the Health Insurance Providers Fee.

The Plaintiff States ask for declartory and injunctive relief. The Plaintiff States also seek monetary relief against the United States in the form of a return of the Health Insurance Providers Fees previously made.

The federal complaint is filed against the U.S. Department of Health and Human Services, Sylvia Burwell in her official capacity as Secretary of Health and Human Services, the U.S. Internal Revenue Service, and John Koskinen in his official capacity as Commissioner of Internal Revenue.

Texas Attorney General Ken Paxton said in a statement obtained by Breitbart Texas, “[t]he law coercively threatens to choke off Medicaid funds for the health needs of millions of Texas citizens, including over 350,000 children, unless Texas taxpayers pay hundreds of millions of dollars to pay for Obamacare.”

“This threat to cut Medicaid funding to Texans unless the state continues to pay hundreds of millions in taxes to Washington amounts to the very ‘gun to the head’ the Supreme Court warned about in earlier rulings on Obamacare,” says the Texas Attorney General.

Paxton continued, “Not only is the federal government threatening the health care needs of millions of Texans, but it is doing so using Texans’ own money, collected from them through taxes.” He said the government’s action “represents yet another huge overstep of authority for this administration, which once again has demonstrated their willingness to circumvent the Constitution in order to achieve their policy goals.”

In particular, the rule by the Centers for Medicare and Medicaid Services allows a private entity to decide that Medicaid insurance rates must include a Health Insurance Providers Fee. Paxton says this is “functionally an unconstitutional tax on the states in order to fund the insolvent Obamacare mandate.” He said the unconstitutional tax just in Texas, “robs the tax coffers of the citizens of Texas,” costing the citizens of Texas $86 million in 2013, and approximately $120 million a year thereafter.

The federal complaint argues that the tax is unconstitutional on four grounds.

First, the U.S. Constitution requires that state officials “clearly understand” what conditions the State is agreeing to when accepting federal funds. However, the Obamacare legislation they argue, is completely silent as to whether state taxpayers must pay for Obamacare or risk losing necessary Medicaid and CHIP funds.

Second, the tax is unconstitutional coercion as the U.S. Supreme Court ruled in the first Obamacare decision, NFIB v. Sebelius. In that case, the Supreme Court held that threatening a percentage of a state’s budget unless it agreed to expand Medicaid was coercion. The Plaintiff States argue that this same funding is at risk again if states refuse to pay the tax.

Third, the Plaintiff States argue that the tax is unconstitutional because the actions delegated the duties of Congress to a private entity, which violates the delegation doctrine prohibiting private entities from exercising legislative authority.

Lastly, the Plaintiff States urge, the new regulation represents a tax on the states which violates the constitutional doctrine prohibiting the taxation of a sovereign state.

Lana Shadwick is a contributing writer and legal analyst for Breitbart Texas. She has served as a prosecutor and an associate judge in Texas. Follow her on Twitter@LanaShadwick2

Affordable Care Act Medicaid Tax Complaint (1)

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