John Kartch
Senate Healthcare Bill Uses the Term "Tax" 183 Times
A word search of Sen. Harry Reid’s 2,074-page Senate healthcare bill (H.R. 3590) reveals that the term “tax” is used 183 times, “taxable” is used 164 times, and “excise tax” is used 8 times.
Other terms of interest are as follows:
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Senate Healthcare Bill (H.R. 3590)
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Term
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Number of uses
|
|
“Tax”
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183 times
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“Taxable”
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164 times
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|
“Excise tax”
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8 times
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“Taxes”
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17 times
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“Fee”
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152 times
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“Penalty”
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115 times
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“Require”
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166 times
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“Must”
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45 times
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“Shall”
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3,607 times
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More from Americans for Tax Reform
Obama Lied, His Tax Pledge Died
By formally endorsing the House healthcare bill today, President Barack Obama effectively announced that the central promise of his 2008 campaign was a lie.
During the campaign, Obama made a “firm pledge” not to raise “any form” of taxes on families making less than $250,000 per 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” (September 12, 2008, Dover, NH)
[HTranscriptH] [HVideo clipH]
"No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised," Joe Biden said, "whether it's their capital gains tax, their income tax, investment tax, any tax."(Joe Biden, Oct. 3, 2008, Vice Presidential Debate, St. Louis, MO)
[HTranscriptH] [HVideo ClipH]
Further, on April 15, 2009, White House spokesman Robert Gibbs was asked if the President’s tax pledge applies “to the health care bill” to which Gibbs replied:
“The statement didn’t come with caveats.” (White House Briefing) [Transcript]
Further, on August 3, 2009, Gibbs is once again asked about the President’s tax pledge, to which Gibbs replied:
“I am reiterating the President's clear commitment in the clearest terms possible, that he's not raising taxes on those who make less than $250,000 a year.” (White House Briefing) [Transcript]
Yet today, Obama formally endorsed H.R. 3962, which is loaded with tax hikes on families making less than $250,000 per year. Here’s how:
Health Insurance Mandate Taxes on Working Families
· Individual Mandate Excise Tax (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. There is no exception for families making less than $250,000.
· Employer Mandate Payroll 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 the following schedule:
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Payroll Tax Rate
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Average Payroll Size
|
|
N/A
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<$500,000
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2%
|
$500,000-$585,000
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|
4%
|
$585,000-$670,000
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6%
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$670,000-$750,000
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8%
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$750,00<
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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
· Cap on Flex-Spending Account (FSA) contributions at $2500 (Page 325): Currently, the contribution level is unlimited
· Medicine Cabinet Tax (Page 324): Americans would no longer be able to purchase over-the-counter medicines with their FSA, Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA)
· Increase in the Non-Qualified HSA Distribution Penalty from 10% to 20% (Page 326): This makes HSAs less attractive, and paves the way for HSA pre-verification
There are 30 million Americans with FSAs. About 8 million Americans have an HSA. Virtually all of them make less than $250,000 per year. These are clear tax hikes on these families
Making Legal Tax Deductions Not So Legal
· 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.
There is no exception for families making less than $250,000 per year.
More from Americans for Tax Reform
Do House Democrats Not Care About Obama's Tax Pledge?
During his campaign, President Obama made a “firm pledge” not to raise “any form” of taxes on families making less than $250,000 per year. Yet, the U.S. House of Representatives 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 Excise Tax (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. There is no exception for families making less than $250,000.
· Employer Mandate Payroll 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 the following schedule:
|
Payroll Tax Rate
|
Average Payroll Size
|
|
N/A
|
<$500,000
|
|
2%
|
$500,000-$585,000
|
|
4%
|
$585,000-$670,000
|
|
6%
|
$670,000-$750,000
|
|
8%
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$750,00<
|
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
· Cap on Flex-Spending Account (FSA) contributions at $2500 (Page 325): Currently, the contribution level is unlimited
· Medicine Cabinet Tax (Page 324): Americans would no longer be able to purchase over-the-counter medicines with their FSA, Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA)
· Increase in the Non-Qualified HSA Distribution Penalty from 10% to 20% (Page 326): This makes HSAs less attractive, and paves the way for HSA pre-verification
There are 30 million Americans with FSAs. About 8 million Americans have an HSA. Virtually all of them make less than $250,000 per year. These are clear tax hikes on these families
Making Legal Tax Deductions Not So Legal
· 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.
There is no exception for families making less than $250,000 per year.
If President Obama is serious about his tax pledge, he should immediately renounce the bill.
Click here for a printable PDF of this document
More from Americans for Tax Reform
2.8 Million Jobs Lost Since "Stimulus" Signed Into Law
The U.S. has lost at least 2.8 million jobs since President Barack Obama signed the “stimulus” package into law on Feb. 17.
Monthly job losses reported by the BLS are as follows:
Mar: 652,000
Apr: 519,000
May: 303,000
June: 463,000
July: 304,000
Aug: 154,000
Sept: 219,000
Oct. 190,000
Total: 2,804,000
Meanwhile, the Obama administration has been content to peddle contrived terms such as “jobs created and saved” and “job-years.”
More from Americans for Tax Reform
Obama's $250,000 Tax Pledge Timeline
President Barack Obama’s central campaign promise was a “firm pledge” not to raise “any form” of taxes on families making less than $250,000 per year. Rather than immediately and unequivocally re-affirming the tax pledge during interviews, this timeline of statements by Obama and White House staff and advisors raises questions understandably troubling to taxpayers:
The Promise -- Sept. 12, 2008: Obama makes a “firm pledge” not to raise “any form” of taxes on those making less than $250,000 per 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.” (Dover, NH) [Transcript] [Video clip]
April 1, 2009: After Obama broke his “firm pledge” when he signed into law a steep hike in the federal excise tax on tobacco, White House spokesman Reid H. Cherlin attempts to claim that the Obama pledge only applies to “income or payroll taxes”:
“The president's position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000, and that's a promise he has kept.” (Associated Press interview) [Permalink]
April 15, 2009: During a White House press briefing, when challenged as to how Obama’s tax pledge squares with his tax hike on tobacco, White House spokesman Robert Gibbs replies:
“People make a decision to smoke.” [Transcript]
April 15, 2009: Moments later, when asked if Obama’s tax pledge applies “to the health care bill”, Gibbs replies:
“The statement didn’t come with caveats.” (White House Briefing) [Transcript]
June 28, 2009: When challenged on ABC’s This Week with George Stephanopoulos as to whether Obama’s tax pledge applies to healthcare reform, White House Advisor David Axelrod refuses three times to affirm the pledge and replies:
“One of the problems we've had in this town is that people draw lines in the sand and they stop talking to each other. And you don't get anything done.” [Transcript]
June 29, 2009: Questioned about David Axelrod’s comments made the day before, White House spokesman Robert Gibbs refuses seven opportunities to affirm Obama’s tax pledge, saying only:
“We're going to let the process work its way through. All right?” [Transcript]
August 2, 2009 Appearing on ABC’s This Week with George Stephanopoulos, Treasury Secretary Tim Geithner refuses to rule out a pledge-breaking tax hike after being given several opportunities to do so:
“I think what the country needs to do is understand we're going to have to do what it takes, we're going to do what's necessary.” [Transcript]
August 2, 2009: On NBC’s Meet the Press, National Economic Council Director Larry Summers also refuses to rule out a tax hike:
“It is never a good idea to absolutely rule things out, no matter what.” [Permalink]
August 3, 2009: Questioned about the previous day’s comments by Geithner and Summers, White House Spokesman Robert Gibbs reiterates Obama’s tax pledge:
“I am reiterating the President's clear commitment in the clearest terms possible, that he's not raising taxes on those who make less than $250,000 a year.”[Transcript]
Sept. 20, 2009: On ABC’s This Week, hosted by George Stephanopoulos, Obama claims that the Baucus plan’s excise tax on the uninsured would not break his tax pledge, denying that it is in fact a tax, even after Stephanopoulos reads him the dictionary definition:
STEPHANOPOULOS: I -- I don't think I'm making it up. Merriam Webster's Dictionary: Tax -- "a charge, usually of money, imposed by authority on persons or property for public purposes."
OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...
STEPHANOPOULOS: Well, no, but...
OBAMA: ...what you're saying is...
STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.
OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that.
Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...
STEPHANOPOULOS: But you reject that it's a tax increase?
OBAMA: I absolutely reject that notion. [Transcript]
Nov. 1, 2009: On ABC’s This Week, hosted by George Stephanopoulos, White House Senior Counsel Valerie Jarrett refuses to unequivocally affirm Obama’s tax pledge:
STEPHANOPOULOS: “So are you saying that the president will not sign this proposal if it does indeed raise taxes on the middle class?”
VALERIE JARRETT: “What I'm saying to you, George, is, let's let the process go forward…”
STEPHANOPOULOS: “So he will not -- bottom line, he will not violate that commitment, is what you're saying?”
VALERIE JARRETT: “What I'm saying is that he is confident that a bill that's going to be passed is going to be consistent with his parameters, yes.” [Transcript]
More from Americans for Tax Reform
Top Obama Advisor Refuses to Rule out Tax Hike on Working Families' Healthcare
Senior White House Counsel Valerie Jarrett on Sunday refused to rule out tax hikes which will raise the price of healthcare for 46 million working families.
Appearing on This Week with George Stephanopoulos, Jarrett refused to rule out tax hikes on families making less than $250,000 per year:
GEORGE STEPHANOPOULOS: “So he will not -- bottom line, he will not violate that commitment, is what you're saying?”
VALERIE JARRETT: “What I'm saying is that he is confident that a bill that's going to be passed is going to be consistent with his parameters, yes.”
On Sept. 12, 2008, candidate Obama made the following promise to the American people:
“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.”
[HTranscriptH] [HVideo clipH]
On Oct. 3, 2008, Vice-Presidential candidate Joe Biden said:
"No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised," Biden said, "whether it's their capital gains tax, their income tax, investment tax, any tax."
[HTranscriptH] [HVideo ClipH]
“President Obama and his paid spokesmen need to make clear to the American people whether they were lying during the campaign or if their campaign promises are, as Richard Nixon spokesman Ron Ziegler once said, ‘inoperative’,” responded Grover Norquist, president of Americans for Tax Reform.
More from Americans for Tax Reform
House Healthcare Bill Uses the Term "Tax" 87 Times
A word search of the 1,990-page House healthcare bill (H.R. 3962) reveals that the term “tax” is used 87 times, “taxable” is used 62 times, and “excise tax” is used 10 times.
Other terms of interest are as follows:
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House Healthcare Bill (H.R. 3962)
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Term
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Number of uses
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|
“Tax”
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87 times
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“Taxable”
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62 times
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|
“Excise tax”
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10 times
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|
“Taxes”
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15 times
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|
“Fee”
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59 times
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|
“Penalty”
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113 times
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|
“Require”
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118 times
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“Must”
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58 times
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“Shall”
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3,424 times
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More from Americans for Tax Reform
What tax hikes will be in Sen. Reid's health bill?
Reports indicate that this might be the week that Sen. Harry Reid (D-Nev.) and the rest of the Senate Democrat leadership finally merge together the healthcare bills approved by the Finance and HELP Committees. Below is a sneak peak of what the tax hikes likely will be:
Excise Tax on High-Cost Health Plans. New 40% excise tax on health insurance plans to the extent they exceed $26,000 in cost ($9850 single). Exemptions made for over-55 retirees and “high-risk” professions; high-cost states phased in. The “Cadillac” threshold is indexed to inflation-plus-one percent, but average premium growth has been eight percent annually for the past decade. At that rate, the average family plan will hit the “Cadillac” threshold less than two decades from now. At that point, a majority of health insurance plans in America will face this new 40 percent tax.
Individual Mandate Tax. If someone does not sign up for health insurance, he/she will have to pay a tax in the following range:
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Single
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Family
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100-300% of Federal Poverty Level
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$750
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$1500
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300+% Federal Poverty Level
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$900
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$1900
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The federal poverty level is about $10,000 for a single person, and about $22,000 for a family of four.
No rational person would enroll in a health insurance plan if they could pay this tax instead. People would be able to enroll in health insurance even if they wait until they get sick. Many people will simply pay this tax, and then enroll in health insurance when they need it. After they no longer need insurance, they will un-enroll and continue to pay the cheaper mandate excise tax.
The average cost of health insurance is about $5,000 per year for an individual, and $11,000 for families.
Employer Mandate Tax. $400 per employee if health coverage is not offered. This is a huge incentive to drop coverage, as $400 is much less than the average plan cost of $11,000 for families or $5000 for singles. A rational employer will drop coverage and simply pay the much lower tax
Backdoor Death of Health Savings Accounts (HSAs). By requiring that all plans (besides the few that are grandfathered) provide actuarially-generous coverage for most services, there would be no HSA-qualifying plans available from the Massachusetts-like exchanges
Report Employer Health Spending on W-2. This is clearly a setup for the easy individual taxation of employer-provided health insurance down the road. If everyone receives an estimate of the cost of care on their W-2, it will be very easy for Congress to require that some or all taxpayers pay tax on this compensation
Cap Flex-Spending Account (FSA) Contributions at $2,500. Currently unlimited. This will have some of the worst side effects for families of special-needs children, who have very high health costs which can be made tax-advantaged with unlimited FSA deferrals
Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D. This will cause the premature death of employer-provided retirement benefits for prescription medications
Report Employer Health Spending on W-2. This is clearly a setup for the easy individual taxation of employer-provided health insurance down the road. If everyone receives an estimate of the cost of care on their W-2, it will be very easy for Congress to require that some or all taxpayers pay tax on this compensation
Cap Flex-Spending Account (FSA) Contributions at $2,500. Currently unlimited. This will have some of the worst side effects for families of special-needs children, who have very high health costs which can be made tax-advantaged with unlimited FSA deferrals
Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D. This will cause the premature death of employer-provided retirement benefits for prescription medications
Medicine Cabinet Tax. Americans would no longer be able to purchase over-the-counter medicines with their FSA, HSA, or HRA. They currently can do so, but this bill’s clear intent is to disadvantage health accounts in the future
Increase Non-Qualified HSA Distribution Penalty from 10% to 20%. This makes HSAs less attractive, and paves the way for HSA pre-verification. Assuming people will qualify to make HSA contributions at all (after the backdoor death of HSAs—see above), this makes that choice somewhat less attractive
Corporate 1099-MISC Information Reporting. Currently, only non-corporations providing property or services for a business must be issued a 1099-MISC. This would expand the requirement to corporations doing business with other businesses. This would be a nightmare of compliance for small businesses, who will find themselves stuck issuing tax forms to dozens or even hundreds of vendors
Increase Non-Qualified HSA Distribution Penalty from 10% to 20%. This makes HSAs less attractive, and paves the way for HSA pre-verification. Assuming people will qualify to make HSA contributions at all (after the backdoor death of HSAs—see above), this makes that choice somewhat less attractive
Corporate 1099-MISC Information Reporting. Currently, only non-corporations providing property or services for a business must be issued a 1099-MISC. This would expand the requirement to corporations doing business with other businesses. This would be a nightmare of compliance for small businesses, who will find themselves stuck issuing tax forms to dozens or even hundreds of vendors
Various industry tax grabs based on market share. $2.3 billion: PhRMA; $6 billion: health insurance providers; $4 billion: medical device manufacturers. No rationale here except a shakedown of politically-unpopular industries. Prices and premiums are sure to rise as a result.
Increase “haircut” of medical itemized deductions from 7.5% to 10% of adjusted gross income (AGI). Under current rules, medical expenses are deductible to the extent the exceed 7.5 percent of adjusted gross income. This would raise the “deduction before the deduction” to 10 percent of AGI. This also has the effect of conforming the regular tax rules to the AMT
More from Americans for Tax Reform
Senate Healthcare Bill Uses the Term "Tax" 124 Times
A word search of the 1,502-page Senate healthcare bill (S. 1796) reveals that the term “tax” is used 124 times, “taxable” is used 158 times, and “excise tax” is used 12 times.
Other terms of interest are as follows:
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Senate Health Care Bill (S. 1796)
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Term
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Number of uses
|
|
“Tax”
|
124 times
|
|
“Taxes”
|
16 times
|
|
“Excise tax”
|
12 times
|
|
“Taxpayer(s)”
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79 times
|
|
“Taxable”
|
158 times
|
|
“Tax-exempt”
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15 times
|
|
“Penalty”
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79 times
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“Require”
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88 times
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“Must”
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40 times
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“Shall”
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2,585 times
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The “excise tax” mentioned on page 194 is just one of several taxes in the bill that violate President Obama’s tax pledge. During his campaign, Obama made a “firm pledge” not to raise “any form” of taxes on families making less than $250,000 per year.
More from Americans for Tax Reform
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