There's an old political truism that says you don't raise taxes during a recession. The reason is, raising taxes during a recession tends to make the recession worse. They used to call that - economics.
But that was before the Age Of Obama and Pelosi, where economic rules no longer apply. Obama and Pelosi just love to raise them some taxes, recession or not. It's full speed ahead and damn the torpedoes with those two. The enormous 1990-page House health care bill is no exception. Following are the taxes contained in that bill, courtesy of Americans For Tax Reform:
Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs [Flexible Spending Accounts] would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA [Health Savings Accounts] Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
That's thirteen new taxes in all, which are supposed to generate $540 billion in new revenue over 10 years to pay for health care reform (though it seems little is actually being reformed with this health care "reform." Mostly, we're just creating a big new welfare program combined with a government mandate for all to purchase health insurance). There is a public option in the House bill, but it is not one which ties reimbursement rates to Medicare rates. It allows for providers to negotiate reimbursement rates. The other interesting thing about ObamaCare is that the health care taxes begin immediately, but the benefits don't kick in for four years or so. That's how ObamaCare "doesn't add one dime to the federal deficit." Ten years of taxes pay for six years of benefits. You aren't supposed to notice that, just as you aren't supposed to notice that ObamaCare cuts over $400 billion from Medicare to pay for itself, something that has never been accomplished before in the history of Medicare. Historically, it's been the Democrats who said Republicans were trying to kill grandma by proposing much smaller Medicare cuts than ObamaCare proposes. Now it's the Democrats proposing the cuts, and the Republicans are the ones saying the Democrats are trying to kill grandma. Things have come full circle. Go figure.
Many of these new taxes will be either implemented against the middle class or passed down to them (non-insurance penalty, tax on medical devices, employer taxes, limits on FSA's and HSA's). This reminds me of something President Obama said on the campaign trail last year:
I can make a firm pledge, under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.
Sure Barry, whatever you say. The One broke that pledge a couple weeks after being inaugurated by raising the tax on cigarettes, and now he wants to break it again with health care reform. Then he wants to break his pledge again with cap and trade, which would be a huge tax increase that filters down to every American household. Various other Democrats want to tax sodas, gasoline, fast foods, heating oil, cigarettes some more, expensive health care plans (Senate health care plan), and anything else they can dream up. Democrats are engaged in the game of 1,001 ways to raise your taxes without you knowing they've raised your taxes.
And all this during what Democrats themselves term as the worst recession since the Great Depression.
Gee, what could possibly go wrong ?
Hey, I know. We can just keep passing $800 billion stimulus packages every single year, basically forever. That will "create or save" lots of jobs. Then everything will be just fine.
Just kidding. That would be a recipe for destruction, as any fifth grader could figure out. The problem is, that seems to BE the actual economic plan of the Democrats, at least until those millions of green jobs kick in sometime in the next couple decades.
That Obama sure is a good public speaker though. There's that.
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