Posted tagged ‘taxes’

New Health Care Bill Has a Tax for Everyone

October 30, 2009

From HotAir:

Americans for Tax Reform has culled the 1990-page Pelosi health-care overhaul bill to find the taxes that will supposedly collect over $540 billion in revenue over 10 years.  It’s quite an impressive list of new burdens on Americans and their health-care providers and producers — but that’s redundant.  After all, who do you think will end up paying for the medical-device taxes?  It won’t be insurers or doctors:

  • 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)
  • Cap on FSAs (Page 325)
  • Increased Additional Tax on Non-Qualified HSA Distributions (Page 326)
  • Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327)
  • Surtax on Individuals and Small Businesses (Page 336)
  • Excise Tax on Medical Devices (Page 339)
  • Corporate 1099-MISC Information Reporting (Page 344)
  • Delay in Worldwide Allocation of Interest (Page 345)
  • Limitation on Tax Treaty Benefits for Certain Payments (Page 346)
  • Codification of the “Economic Substance Doctrine” (Page 349)
  • Application of “More Likely Than Not” Rule (Page 357)

See the ATR post for detailed descriptions of each new tax. 

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Fact-Checking the Obama Health Speech

September 10, 2009

o-youlieReason magazine editor-in-chief Matt Welch has the best post-speech fact-check I’ve seen so far. Going beyond just the basic true/false of what Obama said about the (nonexistant) health reform plan, Welch takes measure of the president’s character and how willing we should be to trust his promises.

 

A brief excerpt:

Again and again last night, the president’s numbers didn’t add up. “There may be those—particularly the young and healthy—who still want to take the risk and go without coverage,” he warned, in a passage defending compulsory insurance. “The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits.” No, it means that, on balance, the healthy young don’t pay for the unhealthy old. The whole point of forcing vigorous youth to buy insurance is using their cash and good actuarials to bring down the costs of covering the less fortunate.

Such fudges reveal a politician who, for whatever reason, feels like he can’t be honest about the real-world costs of expanding health care. “Add it all up, and the plan I’m proposing will cost around $900 billion over ten years,” he said, trying hard to sound like those numbers weren’t pulled out of Joe Biden’s pants, and won’t be dwarfed by actual costs within a year or two. “We’ve estimated that most of this plan can be paid for by finding savings within the existing health care system–a system that is currently full of waste and abuse,” he said, making him at least the eighth consecutive president to vaguely promise cutting Medicare “waste” (a promise, it should be added, that could theoretically be fulfilled without drastically overhauling the health care system). Any government-run “public option,” he claimed, somehow “won’t be” subsidized by taxpayers, but instead would “be self-sufficient and rely on the premiums it collects.”

Read the rest

A Black Hole Called the Federal Reserve

September 5, 2009

Updated Unemployment Rate

September 5, 2009

The latest report on the unemployment rate from the Bureau of Labor Statistics was released yesterday. If you’re into the “less bad” thing, then this report has some good news for you. Only 216,000 jobs were lost in August. The bad news all around, though, is that the official unemployment rate rose to 9.7 percent – the highest rate in 26 years.

Calculated Risk puts it in perspective saying, “The economy has lost almost 5.83 million jobs over the last year, and 6.93 million jobs during the 20 consecutive months of job losses.”

 But worse than that, the Associated Press reported last week that more than 1.3 million people will exhaust their unemployment benefits by the end of the year. The same report puts the number of unemployed at 14.5 million.

And all of the above is based on the official BLS numbers which we all know are only a fraction of the true unemployment numbers. In the real world, where most of us live, the actual rate of unemployment is now around 21 percent.

Visit ShadowStats.com

Courtesy of ShadowStats.com

Not surprisingly, then, government tax collection isn’t going so well.

withholding

And government spending? Like there’s no tomorrow…

spending

None of it bodes well for the immediate future.

“By the pricking of my thumbs, Something wicked this way comes.”
William Shakespeare, Macbeth Act 4, scene1

The Whole Foods Alternative to ObamaCare

August 12, 2009

I’ve been jotting down notes for a few days now of the ways I think health care reform could be done effectively as opposed to the half-baked horror currently circulating in Congress.

So I was quite pleased to find the following op-ed in yesterday’s WSJ. Not only is it almost everything I’ve been thinking, it is a case study in how these ideas are actually working in real life.

Your thoughts?

The Whole Foods Alternative to ObamaCare
Eight things we can do to improve health care without adding to the deficit.

By John Mackey

With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people’s money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone:

Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

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Sadly, I don’t expect to see any of these excellent ideas implemented by the federal government and not just because of partisan politics either.

The unfinished plans in Congress now are heavy on sticks and light on carrots. Why? Because tax revenues have fallen off a cliff.

Health Care Reform Is Making Me Sick

July 16, 2009

o-laughThe House of Representatives passed their health reform bill and the Senate Health, Education, Labor and Pensions Committee passed a $600 billion version today – a version that will require individuals to get health insurance and require employers to contribute to the cost as well.

And what if an individual does not buy a health insurance plan? For about 8 million of us, it means we will pay a new tax of 2.5% – and still not have health insurance.

Keith Hennessey lays it out:

As expected, the House bill would mandate that individuals and families have or buy health insurance.

But what if they don’t buy it?

Then Section 401 kicks in.  Any individual (or family) that does not have health insurance would have to pay a new tax, roughly equal to the smaller of 2.5% of your income or the cost of a health insurance plan. …

I assume the bill authors would respond, “But why wouldn’t you want insurance?  After all, we’re subsidizing it for everyone up to 400% of the poverty line.”

That is true.  But if you’re a single person with income of $44,000 or higher, then you’re above 400% of the poverty line.  You would not be subsidized, but would face the punitive tax if you didn’t get health insurance.  This bill leaves an important gap between the subsidies and the cost of health insurance.  CBO says that for about eight million people, that gap is too big to close, and they would get stuck paying higher taxes and still without health insurance.

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Wondering where your income falls in terms of the federal poverty line? The numbers are on the Health and Human Services web site. Here is the chart for the 48 contiguous states and DC:

Persons in family Poverty guideline
1 $10,830
2 14,570
3 18,310
4 22,050
5 25,790
6 29,530
7 33,270
8 37,010
For families with more than 8 persons, add $3,740 for each additional person.

You can do your own math. With figures as ridiculously low as those, even multiplying the appropriate number by 4 isn’t going to give you an income that would have you living in the lap of luxury.

But if you do happen to be among the so-called wealthy with an income of $250K or more, you may end up paying even more – a 5.4% “surtax” whether you have your own health insurance or not. Interestingly, the “surtax” would be mostly charged to… doctors.

Good plan there – make the doctors angry about having to pay a big new tax and then force them to take on a boatload of new patients. What could go wrong?

Yet all of this for “reform” would enroll less than 5% of Americans and will very likely surpass the $1 trillion price tag currently attached to it according to the Congressional Budget Office.

On a preliminary basis … the proposal’s provisions affecting health insurance coverage would result in a net increase in federal deficits of $1,042 billion for fiscal years 2010 through 2019,” the report said, citing additional expenses for Medicaid and other federal subsidies. One Democratic aide said the bill would add up to $1.5 trillion over the next decade. But the CBO estimate showed that even if the price tag holds to $1 trillion, more than 80 percent of the costs will hit in the last five years. This indicates that after 2019, taxpayers could be hit with a rising tidal wave of health care expenses resulting from the shift in health care coverage from the private to public sector. 

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So, what will health care “reform” look like? According to House Republicans, it will look like this:

But this is a crisis and we can’t do nothing, right, Mr. President? We need to get this thing going before the end of the year!

So buck up, America. Hey, it’s for your own good. Don’t you want top-quality health care like military women get from the VA, like wounded soldiers get from Walter Reed or like Indian Health Services?

Then again, on second thought, no. Universal health care just isn’t worth our freedom.

 

More links on this topic – if you’re feeling up to it:

Health care reform still has a long way to go before passage
Committee: Health care overhaul a yes
Concern grows that healthcare overhaul won’t cut costs
House Democrats would have us believe that the rich can pay for it all
9 reasons Pelosi’s healthcare surtax is disastrous
Small Business Faces Big Bite
What if Obamacare Fails?

A Tax Cut for 95% of Taxpayers – or Not

May 2, 2009

Enjoying that little extra in your paycheck from President Obama’s “Making Work Pay” tax credit? You might want to think about saving it instead of spending it.

According to the new tax withholding tables from the IRS, you’ll probably have to give it back when you file your 2009 taxes.

Married couples with both spouses working, any person with more than one job, retirees and social security recipients with jobs are all likely to be on the hook to give some or all of Obama’s “generous” tax credit back.

So Obama gets to say he kept a campaign promise by cutting taxes for 95% of taxpayers but the government doesn’t lose anything because the IRS will claw it back at the end of the year. Maybe I’m becoming too cynical but it all seems rather too convenient to me.