Who Will Pay for Health Care Overhaul?
The House Democrats released their anxiously-awaited health care bill yesterday with proclamations of coverage for all Americans, cost reductions and efficiency improvements. Those with expectations of tax increases to fund the $1.0 trillion bill were not disappointed, as funding provisions bill included:
- A tax on individuals who opt out of health care insurance, equal to the lesser of 2.5% of adjusted gross income (AGI) or the average individual premium amount.
- A tax on employers who do not provide a health care plan, equal to 8% of payroll for companies with payrolls exceeding $400,000 annually, with lower rates applying to employers with smaller payrolls. This, on top of the current 15.3% payroll tax for Social Security and Medicare, brings the total entitlement tax to a whopping 23.3%.
- A new excise tax on health insurance plans at a rate yet to be determined.
- A new “surtax” on the AGI of small businesses and other high income earners:
- 1% on AGI of $350,000 to $500,000
- 1.5% on AGI of $500,000 to $1,000,000
- 5.4% on AGI over $1,000,000
This last, on top of allowing the Bush tax cuts to expire, will result in a top marginal tax rate of 45% and a capital gains rate of over 25%. The fact that the surtax is applied against AGI rather than taxable income (meaning that it is applied before deductions such as mortgage interest, property taxes and medical expenses) will push the top rate, including state taxes, over 50% and the capital gains rate over 30%.
These punitive income tax rates alone will be a huge impediment to business, particularly small and medium sized businesses responsible for the vast majority of job creation. Additional corporate tax provisions contained in the bill, designed to close “loopholes”, reduce the use of offshore tax havens and accelerate the double taxation of foreign earnings, will further add to the corporate tax burden. These additional costs not only provide businesses further incentive to move to a more friendly environment, but will ultimately be borne by the consumer (taxpayer), again flying in the face of Obama’s vow not to raise taxes on families earning under $250,000.
Proponents of massive health care reform are once again playing the crisis card to accelerate approval of this bill. We are far from a health care crisis in this country. Collapse of the entire health care system is not imminent. Despite misleading statistics published on a daily basis by those complicit in the charade, the numbers of chronically uninsured Americans are relatively small. Improvements certainly need to be made, but taking the time to explore options, gather real facts and make intelligent decisions will ultimately result in a solution that makes more sense and has a far greater chance of actually working. This high cost, ill-conceived bureaucratic nightmare is not the answer.
Tags: John Galt
Just sent this to one my Senators:
Senator Wyden,
The assertion that there are 50 million uninsured citizens of this country is fallacious. A large portion of those are illegal immigrants and should not be eligible for any benefits at all. An even larger portion of those are people who can afford insurance, but chose not to purchase it.
Please refer to the many horrible examples of nationalized healthcare that we have to look at: Canada and the UK both have the sort of systems you propose and their health care is deplorable compared to our current system.
Privately run healthcare can not compete with government sponsored health care. It is silly to think that a private company can “compete” with a company owned by the entity that controls the money printing presses.
All this will serve to do is make the privately purchased health insurance cost prohibitive to ordinary citizens as doctors will be forced to shift their expenses onto private purchasers due to government price controls that will go hand in hand with government insurance.
During tough economic times like these it is absurd to ask citizens to absorb even more taxation to pay for such poorly conceived and ridiculously expensive programs.
Oregon currently has the second highest unemployment in the nation and you are suggesting spending TRILLIONS of dollars that this country, and Oregon, does not have. There is only one way to pay for such spending and that is through higher taxation. Worse yet, under the Senates’s plan we Oregonians will have the highest combined levels of taxation in the entire country. Do you want this to be your legacy to this great state? Now is not the time to be proposing tax hikes Senator.
If you vote for the greatest increase in government spending, and it’s associated taxation, in the history of our country you will have lost my vote forever.
I am a registered Independent voter and hold no favor to either party. However, your willingness to raise my taxes to pay for this, and to do so with little opportunity for your opposition to block the measure will surely result in no Democrat receiving my vote for many years to come.
Do the right thing Mr. Wyden…Stop the madness in Washington. Vote against nationalized healthcare and earn my vote for as long as you choose to serve. Vote in favor of this wreck of a bill and I assure you I will work tirelessly to undermine your support in my community, and all of those communities to which I visit.
Regards,
(45Reverse)
Registered Independent Voter
PS- I find it extremely offensive that Congress is currently considering a bill to *mandate* that all citizens carry health insurance. Exactly who do you guys think you are and exactly how far do you think you have a right to insert yourselves into our lives???
With all the effort you have put into your letter I sincerely hope it makes a difference 45 ……It is very much an uphill battle getting through to representatives ….yet I think the perseverence is turning the volume up ! Nice letter , succint , polite .
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