Ryan Ellis

Baucus Lies About Tax Hikes in Senate Health Bill


Posted by Ryan Ellis, John Kartch on Wednesday, December 2nd, 2009, 10:23 AM PERMALINK


Speaking on the U.S. Senate floor on Monday, Max Baucus falsely claimed that the health bill under consideration does not raise taxes:

“I have also heard it argued that health care reform will raise taxes.  That, too, is false. In fact, health care reform will provide billions of dollars in tax relief to help American families and small businesses afford quality health insurance—tax cuts.  The Joint Tax Committee—again bipartisan and which serves both the House and the Senate—tells us, for example, that our bill would provide $40 billion in the tax cuts in the year 2017 alone—$40 billion in tax cuts in the year 2017.”
 
In fact, the net tax increase (that is, taking into account the tax cuts Baucus mentions) in 2017 alone is a staggering $132.5 billion. Over the first decade of the tax increases taking effect, the net tax increase easily exceeds $1 trillion. 
 
“Senator Baucus needs to explain how a ten-year, trillion-dollar net tax increase is actually a tax cut,” said Grover Norquist, president of Americans for Tax Reform.
 
The official tax score for the bill is provided by the Joint Tax Committee (JCT) and the Congressional Budget Office (CBO). In 2017 alone, they report a net tax hike of $132.5 billion – not a tax cut as Sen. Baucus claims. Over the ten-year scoring window, they report a net tax hike of $857.9 billion.
 
Americans for Tax Reform (ATR) has compiled a comprehensive list of all the tax increases in the Senate health bill. (To view the complete list, click here) Among other things, the bill raises taxes on current health insurance plans, families lacking health insurance, and small employers.
 
“After Senator Baucus is through actually reading the official tax score, he might want to read ATR’s list detailing the eighteen separate tax increases in this bill,” said Norquist.

Click here for a printable PDF of this document

 

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ATR Supports Full Repeal of Death Tax


Posted by Ryan Ellis on Monday, November 30th, 2009, 2:56 PM PERMALINK


ATR sent the following letter today to Congress (read full version):

***

This week, the U.S. House of Representatives is scheduled to vote on H.R. 4154, a bill which would create a permanent death tax structure with a top rate of 45 percent and an exemption level of $3.5 million.

H.R. 4154 is a tragic departure from years of Congressional intent to kill the death tax.  Rather than bury the death tax in a mere 31 days (as is called for under current law), this bill would create a new 45 percent rate in 2010 and into the future.

H.R. 4154 fails to index the death tax for inflation.  By setting the exemption at the 2009 level of $3.5 million and failing to index to CPI, more and more households, small businesses, and family farms will find themselves with a death tax liability.  The same is true of the death tax brackets—the top rate will apply to taxable estate sizes over $1.5 million.  Assuming historical inflation, these death tax levels will be cut in half in real terms with every passing generation (20 to 25 years).  This “death tax generational bracket creep” harkens back to the stagflation and savings erosion of the 1970s.

H.R. 4154 would leave the United States with the third-highest death tax rate in the developed world.  According to a 2007 study by the American Council for Capital Formation, only South Korea and Japan would have a higher top death tax rate than the U.S.  In fact, half of the developed countries in their survey have no death tax whatsoever.  In a world of increasingly-mobile capital, having one of the highest death tax rates in the world simply makes no sense.

H.R. 4154 would leave in place the most unpopular tax among U.S. voters.  Polls consistently have shown for nearly two decades that between 67 and 75 percent of likely voters favor full and permanent repeal of the death tax.  This is remarkable considering that only a small percentage of estates will ever be liable for the tax.  Any Congressman voting for H.R. 4154 would find themselves in a decided minority.

Americans for Tax Reform remains committed to fully and permanently repealing the death tax.  We stand willing to support legislation which does so.

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Senate Health Bill Raises Taxes<br> On Special Needs Kids and Their Families


Posted by Ryan Ellis on Friday, November 20th, 2009, 2:01 PM PERMALINK


  • There are 18 separate tax hikes in the Reid-Obama healthcare bill.  One of them caps the amount that can be deferred in Flexible Spending Accounts (FSAs) at $2500 per year (a similar provision was included in the Pelosi-Obama health bill and written about by Congressman Cathy McMorris-Rogers, R-Was., for National Review Online).  There is currently no limit to how much can be saved, though all monies must be used by the end of the year.  Employers may put a cap in place for their employees, but this would put a cap in federal tax law for the first time.  According to the Employee Benefit Research Institute (EBRI), 30 million American families use an FSA. 
  • For most people, the $2500 cap won’t be noticed.  FSAs tend to be used for things like small deductibles, co-payments, eyeglasses, over-the-counter medicines, and laser eye surgery.  The amount deferred in the typical FSA is probably much less than $2500 today 
  • There is one group of FSA owners for whom this new cap will be particularly-cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. 
  • Under tax rules, FSA dollars can be used to pay for this type of special needs education.  According to IRS Publication 502, Medical Expenses:

    You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders.

    You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education include teaching Braille to a visually impaired person; teaching lip reading to a hearing-impaired person, or giving remedial language training to correct a condition caused by a birth defect.

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How Does the Reid-Obama Health Bill<br> Raise Taxes on Your Current Health Plan?


Posted by Ryan Ellis on Thursday, November 19th, 2009, 6:23 PM PERMALINK


Many people have heard that the Reid-Obama government healthcare bill will raise taxes.  What you might not realize is that many of the tax hikes raise taxes on the health insurance you already have today—endangering the health security of you and your family.  Here’s how:


Excise Tax on Comprehensive Health Insurance Plans (Page 1979/Sec. 9001/$149.1 bil): Starting in 2013, new 40 percent excise tax on “Cadillac” health insurance plans ($8500 single/$23,000 family).  Higher threshold ($9850 single/$26,000 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed.  From 2013-2015, the 17 highest-cost states are 120% of this level. 

Employer Reporting of Health Insurance Costs on W-2 (Page 1996/Sec. 9002/Min$): Preamble to taxing health benefits on individual tax returns.

Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil): No longer allowable to use health savings account (HSA), flexible spending account (FSA), or health reimbursement arrangement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin)

HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

FSA Cap (“Special Needs Children Tax”) (Page 1999/Sec. 9005/$14.6 bil): Imposes cap on FSAs of $2500 (now unlimited).  Will most hurt families of special-needs children, who tend to use outsized FSA deferrals.

Tax on Innovator Medicine Companies (“Miracle Cures Tax”) (Page 2010/Sec. 9008/$22.2 bil): $2.3 billion annual tax on the industry imposed relative to share of sales made that year.

Tax on Medical Devices Like Prosthetic Limbs, Wheelchairs, and Pacemakers (Page 2020/Sec. 9009/$19.3 bil): $2 billion annual tax on the industry imposed relative to shares of sales made that year.  Exempts items retailing for <$100.

Tax on Health Insurance Premiums (Page 2026/Sec. 9010/$60.4 bil): $6.7 billion annual tax on the industry imposed relative to health insurance premiums collected that year.

Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (“Retiree Rx Tax”) (Page 2034/Sec. 9012/$5.4 bil).  Will make employer-provided Rx coverage for retirees less available.

Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI (Page 2034/Sec. 9013/$15.2 bil): Waived for 65+ taxpayers in 2013-2016 only.  Will make it more difficult for working families to deduct medical expenses on their tax return.

Tax on Cosmetic Medical Procedures (“Botox Tax”) (Page 2045/Sec. 9017/$5.8 bil): New 5% excise tax on elective cosmetic surgery to be paid by the surgery patient


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Senate Health Bill Breaks<br> Obama's $250,000 Tax Promise


Posted by Ryan Ellis on Wednesday, November 18th, 2009, 10:11 PM PERMALINK


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Over and over again, President Obama has promised not to raise “any form” of taxes on families making less than $250,000 per year.  Yet, the U.S. Senate is getting ready to consider a government healthcare bill which does just that.  Here’s how:

Health Insurance Mandate Taxes on Working Families

Individual Mandate Tax (Page 324/Sec. 1501/$8 bil): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the following schedule (capped at 8 percent of income):
 

  Single Single +1 Single +2 <
2014 $95 $190 $285
2015 $350 $700 $1050
2016, etc. $750 $1500 $2250


Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).

Employer Mandate Tax (Page 348/Sec. 1513/$28 bil):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $750 for all full-time employees.  Applies to all employers with 50 or more employees.

If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).

Small business owners pay their taxes on their owners’ personal tax returns.  Since this provision does not exempt business owners making less than $250,000 per year, this employer mandate tax will violate President Obama’s promise in some cases.

Tax Hikes on Healthcare Spending Accounts
   
Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil): No longer allowable to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin)

HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

FSA Cap (Page 1999/Sec. 9005/$14.6 bil): Imposes cap on FSAs of $2500 (now unlimited).

Tax Hikes on Medical Spending for Those Making Less Than $250,000

Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI (Page 2034/Sec. 9013/$15.2 bil): Waived for 65+ taxpayers in 2013-2016 only

Tax on Cosmetic Medical Procedures (Page 2045/Sec. 9017/$5.8 bil): New 5% excise tax on elective cosmetic surgery to be paid by the surgery patient

If President Obama is serious about his tax pledge, he should immediately renounce the bill.

 

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BREAKING: Full List of Tax Hikes<br> In Senate Democrat Health Bill


Posted by Ryan Ellis on Wednesday, November 18th, 2009, 9:46 PM PERMALINK


Read the full bill

Read the tax revenue score from the Joint Committee on Taxation (JCT)

Read the budget and tax score from the Congressional Budget Office (CBO)

PDF of this Document

Individual Mandate Tax (Page 324/Sec. 1501/$8 bil/Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the following schedule (capped at 8 percent of income):
 

  Single Single +1 Single +2
2014 $95 $190 $285
2015 $350 $700 $1050
2016, etc. $750 $1500 $2250

 
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).

Employer Mandate Tax (Page 348/Sec. 1513/$28 bil/Jan 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $750 for all full-time employees.  Applies to all employers with 50 or more employees.

If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).

Excise Tax on Comprehensive Health Insurance Plans (Page 1979/Sec. 9001/$149.1 bil/Jan 2011): Starting in 2013, new 40 percent excise tax on “Cadillac” health insurance plans ($8500 single/$23,000 family).  Higher threshold ($9850 single/$26,000 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed.

From 2013-2015, the 17 highest-cost states are 120% of this level. 

Employer Reporting of Insurance on W-2 (Page 1996/Sec. 9002/Min$/Jan 2011): Preamble to taxing health benefits on individual tax returns.

Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil/Jan 2011): No longer allowable to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin)

HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

FSA Cap (Page 1999/Sec. 9005/$14.6 bil/Jan 2011): Imposes cap on FSAs of $2500 (now unlimited).

Corporate 1099-MISC Information Reporting (Page 1999/Sec. 9006/$17.1 bil/Jan 2012): Requires businesses to send 1099-MISC information tax forms to corporations (currently limited to individuals), a huge compliance burden for small employers

Excise Tax on Charitable Hospitals (page 2001/Sec. 9007/Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS.

Tax on Innovator Drug Companies (Page 2010/Sec. 9008/ $22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year.

Tax of Medical Device Manufacturers (Page 2020/Sec. 9009/$19.3 bil/Jan 2010): $2 billion annual tax on the industry imposed relative to shares of sales made that year.  Exempts items retailing for <$100.

Tax on Health Insurers (Page 2026/Sec. 9010/$60.4 bil/Jan 2010): $6.7 billion annual tax on the industry imposed relative to health insurance premiums collected that year.

Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Page 2034/Sec. 9012/$5.4 bil/Jan 2011)

Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Page 2034/Sec. 9013/$15.2 bil/Jan 2013): Waived for 65+ taxpayers in 2013-2016 only

$500,000 Annual Executive Compensation Limit for Health Insurance Executives (Page 2035/Sec. 9014/$0.6 bil/Jan 2013)

Hike in Medicare Payroll Tax (Page 2040/Sec. 9015/$53.8 bil/Jan 2013): Current law and changes:
 

  Wages (Employer/Employee) Self-Employment Net Income
Current Law and New Rate on First $200,000 ($250,000 MFJ) 1.45%/1.45% 2.9%
New Rate on Amount Which Exceeds $200,000 ($250,000 MFJ) 1.45%/1.95% 3.4%


The 0.5% new rate addition is not deductible for the self-employment tax adjustment.

Blue Cross/Blue Shield Tax Hike (Page 2044/Sec. 9016/$0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services

Tax on Cosmetic Medical Procedures (Page 2045/Sec. 9017/$5.8 bil/Jan 2010): New 5% excise tax on elective cosmetic surgery to be paid by the surgery patient.

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Yet Another Obama Appointee<br> Is a Tax Hypocrite


Posted by Ryan Ellis on Wednesday, November 18th, 2009, 6:58 PM PERMALINK


It looks like yet another Obama Treasury Department nominee has tax problems: Lael Brainerd, who is nominated to be Assistant Treasury Secretary for International Affairs.

The tax flubs include:

  • late payments on DC unemployment tax
  • hiring a possibly illegal alien
  • late property tax payments
  • improperly claiming a home office deduction

Once again, we see an Obama nominee (at Treasury, no less) not paying her taxes.  This is the same crowd who wants to raise our taxes by hundreds of billions per year.

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Tax Pledge Alert:<br> Vote for Cloture on Motion to Proceed<br> Is Violation of Tax Pledge


Posted by Ryan Ellis on Wednesday, November 18th, 2009, 5:36 PM PERMALINK


Tomorrow at Noon, Senate Majority Leader Harry Reid (D-Nev.) is scheduled to release details of his health reform bill.  This bill is widely expected to include tax provisions which shall result in a net income tax hike.

Failing to fight back against this tax-hike bill would be a violation of the Taxpayer Protection Pledge, which binds 33 United State Senators to “oppose any and all efforts” to raise net income taxes. 

ATR considers the vote on cloture on the motion to proceed to Senator Reid’s government healthcare bill to be in direct violation of this Pledge.  Any Pledge-signing senator who votes for this cloture motion will be considered a Taxpayer Protection Pledge violator.

A VOTE TO INVOKE CLOTURE ON THE MOTION TO PROCEED TO THE REID GOVERNMENT HEALTH BILL VIOLATES THE TAXPAYER PROTECTION PLEDGE

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ATR Will Rate a Vote Against<br> Moving to Proceed to Reid Health Bill


Posted by Ryan Ellis on Wednesday, November 18th, 2009, 12:33 PM PERMALINK


This week, the United States Senate will be voting on a motion to proceed to consideration of Senate Majority Leader Harry Reid’s (D-Nev.) healthcare bill.  This bill would increase taxes by hundreds of billions of dollars over the next decade, saddle future generations with another unfunded entitlement, and destroy private sector health insurance.

A vote to proceed with this deeply-flawed legislation is tantamount to a vote in support of the bill.  A VOTE IN FAVOR OF THE MOTION TO PROCEED IS A VOTE IN FAVOR OF THE BILL.

For that reason, Americans for Tax Reform WILL RATE a vote against moving to proceed in our annual “Hero of the Taxpayer” Congressional scorecard.

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ATR Supports H.R. 3905, <br>"The Estate Tax Relief Act of 2009"


Posted by Ryan Ellis on Friday, November 13th, 2009, 5:43 PM PERMALINK


Americans for Tax Reform sent the following letter today to Congressman Kevin Brady (R-TX):

On behalf of Americans for Tax Reform, I am pleased to support H.R. 3905, “The Estate Tax Relief Act of 2009.”  While it falls short of our goal of full death tax repeal, it remains a tax cut relative to current law.

As you know, the death tax is scheduled to be reduced to a rate of “0” in 2010, only to shoot up to 55 percent in 2011.  Full repeal of the death tax remains the goal.  However, should full repeal not be possible, the next priority for taxpayers must be to avoid a tax increase relative to current law.

H.R. 3905 is a death tax cut relative to current law.  The bill calls for a ten-year, phased in reduction of the death tax rate—from 45 percent in 2009 to 35 percent in 2019.  Furthermore, the death tax exclusion rises from $3.5 million in 2009 to $5 million in 2019 (indexed to inflation after that).  This would be a permanent cut in the death tax, and moves closer to full repeal than current law would.

H.R. 3905 would score as a net tax cut relative to current law, which assumes a 55 percent death tax rate and a $1 million exemption level—permanently.  Repeal of the death tax would be preferable to H.R. 3905, but this bill is superior to current law after 2010.

I look forward to continuing to work with you and our other allies on Capitol Hill to fully repeal the death tax.

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