Will the health care reform bill that the Democrats are trying to figure out a way to ram through Congress end up being the biggest tax increase in U.S. history? Unfortunately, a close reading of the bill leads to the inescapable conclusion that it will be. You see, the crafters of this legislation were smart. They realized that if they included one huge tax increase in the health care bill it would make headlines all over the country, so they chopped up the taxes into a bunch of smaller pieces in order to make them easier to swallow. In fact, one review of the Senate version of the health care bill identified at least 19 tax increases. When you put all of the tax increases together they add up to the biggest tax increase in the history of the United States. Considering the fact that the U.S. economy is already on the verge of economic collapse, the last thing that the American people need is a massive tax increase. But that is exactly what they are about to get.
So let's take a closer look at some of these taxes....
*In Section 5000(A) of the Senate version of the bill (which can be found here), there is a requirement for all Americans to purchase health insurance. Those who do not obtain health coverage will be hit with an annual tax penalty of $750.
*Barack Obama is trying to sneak a large Medicare tax increase for wealthy Americans into the final version of the health care bill. Under Obama's proposal, individuals who earn more than $200,000 and couples who earn over $250,000 would pay an additional 2.9% surtax on unearned income from interest, dividends, annuities, royalties and rents. Up until now, employers and employees have each contributed 1.45% of each paycheck to Medicare. But if Obama's proposal makes it into the final bill, wealthy Americans will see their Medicare taxes absolutely skyrocket.
*In Section 9008 of the Senate version of the health care bill, a $2.3 billion excise tax would be imposed on the pharmaceutical industry. This tax would not be based on income. It would solely be based on market share. So even if a company was losing hundreds of millions of dollars it would still have to pay.
*Section 9009 of the Senate version of the health care bill imposes an "annual fee" on medical device manufacturers and importers. Once again, this $2 billion "excise tax" would be based on market share and not on income.
*Section 9010 of the Senate version of the health care bill would also impose an "annual fee" on health insurance providers. This $6.7 billion tax would also be allocated based on market share.
So how much of these new taxes on health insurance companies, drugmakers and medical device manufacturers do you think will be passed on to consumers?
Anyone want to take a guess?
Just because a particular tax increase is not directed at you does not mean that it won't take money out of your pocket.
Let's look at some more (yes, there are more) of the tax increases....
*Section 9001 of the Senate version of the health care bill contains an excise tax on "Cadillac" health plans. In other words, if you have provided your family with the very best in health coverage you get to be taxed extra. This tax is particularly harsh. Section 9001 imposes a 40 percent tax on the portion of insurance premiums exceeding $8,500 a year for individuals and $23,000 a year for family plans. In order to hide the tax, it will be imposed on the health insurance companies who issue the policies. But do you think that they will not pass that cost on to their customers?
So now the American people will be highly penalized for getting really good health care plans.
*Section 9017 of the Senate version of the health care bill imposes an excise tax on elective cosmetic medical procedures. Any voluntary cosmetic procedures will now be subjected to a 5 percent tax. All of those boob jobs are about to get a lot more expensive.
*The House version of the health care bill would impose a 5.4 percent income tax increase on individuals making more than $500,000 and on couples making more than $1 million.
So if you are living the American Dream you are about to pay a lot more for it if the House version of the health care bill gets adopted.
Let's break this down a little bit.
Currently, the top income tax rate in the United States is 35 percent.
If existing Bush tax cuts expire in 2011 as Barack Obama wants them to, the top tax rate will go back up to 39.6 percent.
But this new "health care tax" would jack things up even higher.
Another 5.4 percent would take the highest tax rate in America to 45 percent. That is before any state, local or property taxes are even paid.
Pretty soon it won't even be worth it to work hard in America anymore.
But that is not the end of the tax increases.
A PricewaterhouseCoopers’ analysis for America’s Health Insurance Plans found that family health insurance premiums would be approximately $4,000 a year higher if the health care reform bill is passed.
Can you afford to pay over $300 a month more for health insurance for your family?
Are you starting to get the idea?
This health care reform bill will be an absolute financial disaster for America. But considering the fact that the Senate version of the bill is 2409 pages long, hardly anyone will ever take the time to read the whole thing.
And yes, the Democrats are likely to tweak things a little more as they try to figure out how to sneak a final version through, but there is now one thing that seems virtually certain.
This is going to be the biggest tax increase in U.S. history.
Isn't that exciting?
There’ll be a tax increase on the rich who pay very little taxes in comparison to the middle class!
Wow!!! (I look at mandatory insurance as a $4000 yearly tax also).
Where in the US Constitution does it say I must pay $4000 a year to insurance industry to remain a law abiding citizen?
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What single thing would bring this home (for me)? Health Care Reform. But…
1. It must be FAIR and equitable to all (no mandatory or punishments) and yet provide a safety net to those in trouble.
2. It must apply to ALL Citizens, including all government.
3. It must not favor big business or any special benefactor interest.
4. It must honor the patient first and push toward non-assembly line medicine.
5. It must allow complete choice of all citizens to have their lifestyles and care for their own health.
6. It must not interfere with consequences of imprudent lifestyle or unsatisfactory choices or lack of personal responsibility.
7. It must have a short implementation and not be mired down w rules.
ps, ‘Dyck’s 5 Steps to HCR’ maybe not polished, but it fits these criteria. http://bit.ly/9GwRLL
Consider the fact that Insurance companies and the Medical industries in general have been raping Americans for so long with outrageous costs, it doesn’t sound so bad. In the end the insurance companies will not be able to recover all of the new costs by raising the rates. As far as the wealthy being taxed “more”, well we are in hard times right now and if anyone should have to pay more, it’s the people earning more than $200, 00 or $250,000 per year. I’m not going to shed a tear for them. The point is the healthcare system in this country is broken and needs repair.
It appears we are inside a vortex of tyranny. The rapings are increasing in frequency and severity. Just a few months ago,amidst huge opposition by the people of america, tax payers shouldered the enormous Taarp(Wall Street Bailout)Program, now this. Just wow. Another backroom deal? Will there even be opposition this time? Or are we all convinced evil is good?
I think the chance this bill passes is…high. everyone grab your ankles.
Ann-
This may be of interest to you…
http://www.allegromedia.com/sugi/taxes/
The takeaway is that the top 20% pay something around 85% of all income taxes in the US. Somewhere close to 45%-50% pay no net income taxes. The middle class (broadly defined as the middle 60% pay approx. 15% of taxes.
Jimmy-
If you think the insurance companies are bad (their costs have been increasing because of cost shifting from Medicare/Medicaid as well as the cost of new technology), wait until the government takes over. Then, you’ll have no options, even higher costs, and rationed services. If you think adding the current uninsured to the medical system will lower costs and increase supply then I submit that you will be very unpleasantly surprised.
There are ways to address the current problems with HC that do not require the government to take over another 6th of the economy as well as practically every aspect of your life. HSAs coupled with catastrophic care insurance + a high risk pool for pre-existing conditions (BTW, HC for a pre-existing condition is NOT insurance, it is just a capped-fee unlimited demand entitlement) + interstate insurance competition + tort reform would meaningfully lower costs while maintaining/increasing flexibility and technology improvements.
My 2 cents worth
A step needs to be taken on healthcare. I don’t believe the current bill is it. But I do believe it’s a step in the right direction. Anybody complaining about this has never been denied coverage or gotten a hospital bill for $60k.
And to suggest that this admin is any worse than the last is total hypocrisy. Bush did TARP. Bush let energy prices skyrocket (encouraged them, in fact, by starting wars in the Gulf). Inflation is an implicit, quiet tax that nobody ever bitches about.
I guess it’s because the poor bears most of the burden.
RIGHT ON EXCEPT YOU SEEM TO BE MISLED INTO THINKING THAT THE REPULBLICANS ARE NOT ON BOARD WITH THIS CRAP. THEY ALONG WITH THE DEMOCRATS RAN US HOPELESSLY INTO DEBT AND NOW SOMEONE HAS TO PAY FOR THE SOCIAL SECURITY AND MEDICARE LIABILITIES THAT THE REPUBLICRATS HAVE CREATED BY SQUANDERING THE MONEY ON EVERYTHING BUT WHAT IT WAS INTENDED FOR.
ANN: The 1% of the richest people currently pay 40% of the taxes, and the top 5% pay 60% of the taxes already. Keep taxing them and they will take their businesses to other countries and make us loose jobs….oh wait they are already starting to do that! Wow sounds like you’re on the band wagon with Obama in increasing unemployment too.
http://www.heritage.org/research/taxes/wm2420.cfm
JIMMY IN VEGAS: If you paid all the top executives just $1 instead of the millions they make you would put a dent in the side of a cruise ship. Obama has already said it will be almost a Trillion dollars to do universal health care so the paycheck these guys make doesn’t even scratch the service of the high premiums. I think one study I saw that if they didn’t get paid at all our premiums would drop by 1 penny a year. Your argument has not merit.
Hey Admin,
You got posters commenting on taxes paid by this class and that class, throwing around very questionable figures with links to shaky reference websites. Do us a favor by sorting this all out. Its getting a little noisy in here.
To X,
Here’s the thing man, I know you like repeating the republican mantra that the rich pay most of the taxes, but you really need to give that soundbite a rest. People like you who perpetuate the republican/democrat, us against them paradigm, love to quote endless IRS statistics showing who pays what and who doesn’t. Funny though, what you guys never seem to mention is why the rich pay what they do–IT’S BECAUSE THEY OWN EVERY FREAKING THING. According to the Federal Reserve, the richest 1 percent of Americans own or control more financial wealth than the bottom 95 percent combined. Furthermore, wages adjusted for inflation, using the governments own bogus CPI numbers, show wages have not increased substantially since the 1970’s. Unless you’re having tea and crumpets in the Hamptons today with Buffet or Gates, that 1% does not include you. Oh, and just in case you think they earned all that wealth think: 34,750 lobbyists from K street lobbying firms and special interest groups with instant access to all 535 members of congress to bribe, extort, and blackmail favorable legislation. You doubt that, just do a little research and see how mush money these lobbyist are making and spending–trust me, it’s not for the collective good of the American people.
As for healthcare reform, the republicans nor democrats give a crap about giving Americans any king of meaningfful help in making healthcare more affordable for most of us. This whole political circus is about stealing more of our property in order to keep the ponzi economy going until their new system is in place. Why else do thing you think they will start taxing us immediately but will not pay out any benefits for 3 to 4 years? Or are you normally not that inquisitive?
As for the “1 percent of top…blah blah blah, paying 40%” (use whatever stat you want) – you’re comparing apples to mincemeat. It’s not the same.
By the way, that’s the way a progressive income tax system works. There’s not an in-office politician on this planet willing to put his neck on the line to propose an alternative, either.
And let’s think about “all” taxes for a moment. Did you know that “the poor” pay the most, as a percentage of their incomes, in payroll taxes? Yeah.
So let’s just put things in perspective and take a walk in others’ shoes before we set our views in stone.
None of this stuff is simple. If it were, wouldn’t we have figured it out long ago?
“Barack Obama is trying to sneak a large Medicare tax increase for wealthy Americans into the final version of the health care bill.”
Hey, this bill is a little better than I thought!
The majority of middle rich have already left the United States. They have bought citizenship and villas and just ask NY State, New Jersey. All their money is tied up in gold; otherwise they are broke.
Yes, this is a major social problem.. the problem of the ‘middle rich.’ No doubt their money doesn’t by the foreign citizenship or villa it used to.
We already have universal healthcare. Anyone, citizen or not, can walk into an emergency room and recieve care, or have a baby in the maternity ward-FREE OF CHARGE-IT’S ALREADY THE LAW. My wife is a nurse and confirms the above to me. Who is paying for the above-we all are right now, as costs are passed onto those with insurance. The healthcare bill will do nothing but allow the government to require the healthy and young to pay for our universal healthcare system under the guise that the program is for them. The program will be as successful as social security-I’m 35, and know that I’ll never collect a dime of the money that I and my employers have paid into the system. Or, if I do live long enough to recieve a check, the purchasing power of it will be near zero. If the healthcare bill passes, we’ll forever pay more, but continuously recieve less. If the government wasn’t already so involved in healthcare (via medicare/medicaid-and the associated fraud), it wouldn’t be as expensive as it is now-Another example-just look at the prescription drug bill where the government didn’t allow for the prices of drugs to be negotiated with the big pharmas. One last thought, another reason healthcare is expensive is because salaries in the medical professions have kept up with government created inflation-it’s kind of hard to outsource those jobs to cheap labor sources-thankfully!
Europe spends half of what the u.s.a. does on health care and they live 4 years longer…why not just copy the German and French systems….if we quit the illegal and immoral wars of occupation and murder then we can provide humane health care…and stop the bank welfare….make the rich pay their fair share of taxes…90%tax rate on the millionaires in the 1950s..where is an Ike for president..revolution….
I have just one question, I don’t get how the health care reform is going to provide health care to 32 million uninsured people like they are claiming! How is that supposed to happen when the bill will only raise health insurance rates since they are taxing the health insurance companies? Is placing a fine on people that can’t afford it now going to make it suddenly more affordable? Please help me understand where I’m just not seeing how this is going to provide 32 million uninsured with health insurance???
The current tax system does not work. I am in favor of the flat tax system, that way we can all take responsibility for our current debt. This reform bill will mainly expand medicaid at the cost of the states’ budgets. We will all be paying more taxes, whether its at a federal, state, or local level. Unemployment rates will rise as more businesses get fed up with trying to maintain the cost of employess, and then we will increase our entitlement programs even more (because more and more folks will have their hands out asking for their share). 1/3 of working americans support the 2/3’s that do not. Pretty soon, the well will dry up.
“The 1% of the richest people currently pay 40% of the taxes, and the top 5% pay 60% of the taxes already. Keep taxing them and they will take their businesses to other countries and make us loose jobs….oh wait they are already starting to do that!”
They take their business to the Far East because they value wealth above people…they are taxed heavily because they are wealthier than the majority of people.
Factor “X” is GREED. Only by encouraging people to invest IN PEOPLE, rather than in money do you solve the problem.
Americans opposed to universal health care value money, not people.
Solution…stop worshipping money & start valuing people. Or is that too “socialist” for you?
As the only industrialised country that does not have a universal health care system, the USA stands alone. No doubt your taxes would be better spent on another illegal invasion of an oil rich arab nation or yet another prison to add to all your collection.
It’s really amazing how many losers out there that bash the wealthy. The wealthy got there because there were smarter than you losers in the bottom ranks.
So what if they have many assets. Do they use more of the roads, more of the schools?
You losers don’t get it. You want to whine about their incomes because your’s is so poor.
Health care is nothing but a hidden tax. Healthcare will not improve, it will get worse. Next is BS Cap and Trade, even though we all know Global Warming id BS dreamed up to steal more of your money.
Will you please quit listening to the mass media propaganda and start thinking for yourself. I know that you are poor and stupid, but the internet is your library of knowledge. Learn to use it, maybe your incomes will increase and you will take the other side of the argument. FOOLS!
Dom: Here are the real answers:
They take their business to the Far East because they value wealth above people…they are taxed heavily because they are wealthier than the majority of people.
THEY TAKE THEIR BUSINESS THERE TO BE COMPETITIVE, OTHERWISE THEY WILL BE OUT OF BUSINESS.
Factor “X” is GREED. Only by encouraging people to invest IN PEOPLE, rather than in money do you solve the problem.
THIS MAKES NO SENSE AT ALL.
Americans opposed to universal health care value money, not people.
WHAT HAS THE GOVERNMENT EVER RUN THAT WAS SUCCESSFUL? DO YOU EVEN KNOW WHAT IS IN THE BILL/LAW? WHY DO WE NEED ANOTHER AGENCY, WHY NOT REQUIRE EVERYONE ABOVE A CERTAIN INCOME LEVEL TO PURCHASE INSURANCE AND THEY COVER EVERYONE ELSE BY HAVING THE GOVERNMENT BUY THE POLICIES FOR THEM?
As the only industrialised country that does not have a universal health care system, the USA stands alone. No doubt your taxes would be better spent on another illegal invasion of an oil rich arab nation or yet another prison to add to all your collection.
ONE, CANADIANS COME TO THE US FOR HEATHCARE, NOTE ONE OF THEIR HIGH UP OFFICIALS DID IT JUST A FEW MONTHS AGO, WONDER WHY.
TWO, WITHOUT OIL, OUR COUNTRY COMES TO A HALT.
IT’S REALLY EASY TO UNDERSTAND WHY YOU ARE POOR.
This is what the Democrats do. They divide and create class warfare to get what they want, thus to punish the do gooders with more taxes and regulations