(The article was published on The Economic Collapse Blog.)
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 realised 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 per cent 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 penalised 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 per cent 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 per cent 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 per cent.
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 per cent.
But this new “health care tax” would jack things up even higher.
Another 5.4 per cent would take the highest tax rate in America to 45 per cent. 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?
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