They Passed It, And We Still Don’t Want It

 659.) President Obama has raised taxes on countless Americans. He slipped these tax hikes in right under our noses when he signed Obamacare into law.  As it turn’s out Nancy Pelosi was right when she said they had to pass the bill for us to find out what was in it.  American’s For Tax Reform released a list of what they claim to be the worst tax hikes in theObamacare legislation that will kick in in 2013. The following are the top five worst taxes imposed upon the American people under Obamacare, as rated by American’s for Tax Reform.

Number 5.) The ObamaCare Medical Device Tax.  Did you know that over 400,000 people in this country work in 12,000 manufacturing plants producing various medical devices? Well President Obama must have seen this as a great form of tax revenue, because he signed into law a 2.3% excise tax on those companies. This tax applies to these companies even if they do not make a profit in a given year. That works out to be about a $20,000,000,000 tax hike.  Now my question for you is how does raising taxes to the tune of $20 billion dollars on the companies that make medical devices help drive down health care costs?  How does increasing the cost of doing business help a company increase the quality of a product?  All this tax increase does is take money these companies could have spent on research and development, or perhaps creating new jobs, and instead gives it to the government to waste.

Number 4.) The Obamacare Special Needs Kids Tax Hike.  I found describing this part of the report hard, so I figure I will let the report speak for itself. The following is a direct quote from the report.

 “The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set a cap).

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 several million 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. This Obamacare Tax provision will limit the options available to these families.”This provision in Obamacare amounts to a $13,000,000,000 tax increase.

Number 3.) ObamacareSurtax on Investment Income.  In Obamacarethere is a 3.8% increase on investment income on houses making at least $250,000(200,000 single).  Below is a chart provided by Americans For Tax Reform:

                              taxes under Obama

Please note: The table above also incorporates the scheduled hike in the capital gainsrate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to39.6 percent.

So now I must ask the question, how does taxing investmentincome help bring down health care costs, more importantly what does taxing investment income have to do with lowering health care costs?  All I can see it succeeding in doing is making people less likely to invest in companies, which hurts the economy.

Number 2.) The Obamacare Haircut for Medical Itemized Deductions.  Currently Americans who have high medical expenses are allowed a deduction for the amount those expenses exceed 7.5% of adjusted gross income.  President Obama thought that the rate of 7.5% was too low, so he saw fit to raise it to 10%.  This widens the taxable income for those Americans who are sick and suffering.  So tell me, Obamacare was supposed to help the poor and expand coverage to every American, so how does raising taxes by $15,200,000,000 on the sickest American’s help them?  President Obama claims that Republicans want to push granny off a cliff, but President Obama approved of legislation that will harm countless people near or in retirement, you know those who followed the rules, paid into the system, and now have a limited income and rising medical costs.  So again I ask how does raising taxes on these people help them?

Number 1.) The ObamaCare Medicare Payroll Tax Hike. Currently Medicare payroll tax rates stand at 2.9% on all wages and self employment profits. President Obama clearly thought this rate was too low, so he saw fit to raise that rate to 3.8% on wages and profits exceeding $200,000 ($250,000 for married couples) What this works out to is a direct tax hike on small business owners, the people who employ other Americans and help drive the economy.  Below is a chart from American’s For Tax Reform comparing the current medicare payroll tax rate vs. Obamacare Medicare Tax Rates.

  Obamacarepayroll

So how is raising taxes to the tune of $86,800,000,000 not going to hurt the economy? How is this massive tax increase going to encourage hiring? 

 

If you are interested in reading the report for yourself,here is a link to it.

http://s3.amazonaws.com/atrfiles/files/files/09282012pr-Top%20Five%20Worst%20Obamacare%20Taxes%20Hitting%20in%202013.pdf

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20 comments
  1. One, the president doesn’t write or edit legislation, so acting like obama personally put this or that bit in is just ignorant.  Two, your billions of dollars estimates of how big these taxes are are all over an un-specified number of years and are thus both exaggerated and meaningless.  Three, the medical device tax will be offset by the huge influx of demand for their products the legislation will cause and they will be more than able to pay for it – the healthcare industry is predicted to produce 5 million new jobs over the next 8 years, in no small part due to the legislation you’re claiming will kill jobs and investments (with no logic or evidence).  As for it applying to a company that doesn’t make a profit, their profit is the only taxable income – 2.3% of zero dollars is zero dollars.As for the FSA those expenses are still deductible, this is essentially just an accounting change with no real tax consequences being made into a big deal.As for capital gains etc – it didn’t occur to you that 15 plus 3.8 doesn’t equal 23.8?  And oh my god those poor unemployed rich people, paying a lower tax rate than the wealthiest people with jobs.  Oh the humanity!And finally, even if I grant your inflated figures, the purpose of the healthcare reforms is to curtail the growth of the cost of healthcare which was expanding at double the rate of inflation and was already more than double what every other industrialized country pays, including those with universal healthcare.  We should be paying 1 in 10 dollars in our economy for healthcare, instead we are paying 2 out of ten dollars – or 1.4 trillion dollars a year more than we should be.  68 billion is less than the annual increase in the cost of healthcare.  So yes, we should absolutely pay it to fix a horribly broken system.

  2. And by the way I’m still waiting for you (and grim truth) to do a blog denouncing romney’s disgraceful use of our nation’s flag.

  3. @agnophilo – Yes, the President can write legislation and submit it to Congress.  But Obama did not do that. He let the Democrat Congress go so hog wild that nobody knew what was in ObamaCare.  And the bill is written so that whatever the Health Czar feels at the moment becomes law.

  4. The Democrats think that if you raise taxes the government automatically gets more money.  They don’t realize that by raising taxes they are shutting down the economy.

  5. mcbery said:

    One – Signing legislation you haven’t read is criminal. Nuff said. We are in deep trouble if he gets re-elected. Nuff said again.

  6. @PrisonerxOfxLove – No, he can’t.@PrisonerxOfxLove – When the great depression was ending the top tax rate was 94%, it was lowered to 35% and the economy collapsed again.  If low taxes for the wealthy and businesses were, by themselves, the sole cause of economic prosperity as republicans imagine, we’d be doing very well right now.@mcbery – Where did you get that?

  7. @agnophilo – You’re hallucinating an alternative reality.  Every president in modern times submitted both budgets and legislation that expressed their interests.You need to study government and politics not hallucinate it.

  8. @agnophilo – You’re neglecting to mention one tiny detail in your hallucination:  World War II ended the Great Depression.  And the reason a 90% tax rate worked to raise revenue was because nearly every US citizen understood reality:  if they didn’t win the War the world would become hell on earth.  That is called motivation.Democrat taxation doesn’t finance existential survival.  It finances big government and political careers.  That type of taxation destroys motivation, therefore it will destroy tax revenue.You have got to begin using your mind to start thinking about the way things really are.

  9. @PrisonerxOfxLove – The president can propose a budget, his proposal is not what gets actually voted on.@PrisonerxOfxLove – So taxes and government spending don’t end bad economic times, unless it’s a great depression in which case the solution is extremely high taxes and huge government spending?As I said, it’s not as simple as “taxes are good” or “taxes are bad”.

  10. @agnophilo – Nobody’s proposal is what gets voted on.  In the end the budget is a compromise.But the point is that the President submits a budget to Congress.  Reagan did it. And Bush did it. But there budgets were always “dead on arrival” because they limited the insane spending habits of Democrats.

  11. @agnophilo – Reagan’s administration proved that tax policy does indeed stimulate the economy.Obama’s Regime proved that insane levels of debt and spending depress the economy.But we already knew that because FDR’s New Deal prolonged the Great Depression.

  12. virtus1 said:

    We have to remember.  For every dollar in revenue these taxes generate, there is up to 300% deadweight loss to the economy depending on the elasticity of supply or demand in the markets on which the tax is levied.

  13. @agnophilo – I’m still waiting for you to show me where Mitt Romney has approved such an act. 

  14. @agnophilo – Yes and no, He can write legislation, but it has to be introduced by a member of congress. we have had this debate time and time again, the New Deal did not pull the United States out of the Great Depression. You cannot stand in a  bucket and pull yourself up. 

  15. @agnophilo – Excusing Obama from any responsibility for his crown piece of legislation is absurd.You may as well get it over with and start blaming Bush for ObamaCare.Or then again maybe it was all caused by a rampaging Big Bird.

  16. @PrisonerxOfxLove – We were talking about the budget, not healthcare reforms, and I think you just accidentally mocked romney.

  17. @agnophilo – ObamaCare is going to blow the federal budget to smithereens. So talking budget and ObamaCare is perfectly appropriate.

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