Down To The Wire

The vote on healthcare “reform” (actual a government take-over of 17% of the American economy) is scheduled to take place today. (We have a podcast recording session today at 3pm, by which time the vote may have been taken.)

As of last count (yesterday) Speaker Pelosi did not have enough votes to pass what is being called the Senate version, despite the Senate never having voted on it. She and the President are working feverishly to gain the last few votes needed.

Let’s recap:

New taxes added by the healthcare bill:

Here is a partial list of the tax increases in the Pelosi health care bill (via Congressman Frelinghuysen’s office, my emphasis):

• If you don’t buy health insurance (as dictated acceptable by a new federal czar), you will be fined up to 2.5% of your income even if you pay all of your medical expenses yourself. If your company does not provide “acceptable” health insurance to all workers, the company will be fined up to $2,000 per employee. (This proposal alone may require the hiring of 1,600 new IRS employees.

• An additional Medicare tax on self-employment income and wages.  This removes the current cap on wages subject to this tax and it will effectively move the top income tax rate from 35% to 43.4% within a couple of years;

• For certain taxpayers, the bill increases the Medicare FICA tax from 2.9 percent to 3.8 percent and for the first time, this tax will be extended beyond wages to include interest, dividends, capital gains, annuities, royalties, home sales and rents.  This new tax will be particularly damaging to New Jersey’s seniors, many of whom depend on their interest, dividends and annuities to cover their monthly expenses and potential nursing home costs;

• There is a 2.9% tax on all medical “devices”, which basically means everything used in a doctor’s office or hospital. Including gowns, syringes, wheelchairs and the like.  This will increase health care costs for everyone who does not get free government insurance;

• The deduction for medical expenses is currently limited to those expenses that exceed 7.5% or your income. This will be raised to a threshold of 10% of your income. This means that fewer people will get any tax relief from medical expenses they pay for themselves;

• There are various taxes on anything a person might do to pay for their own medical expenses. Things like Health Savings Accounts, Cafeteria Plans, and Flexible Savings Accounts are ways for people to save their OWN money for their OWN medical care on a pre-tax basis. Under the bill, they will be limited and taxed;

• A 10% tax on tanning services;

• A tax on self-insured health plans. This is another penalty on those who try to pay for their own health care;

• A new tax on pharmaceutical manufacturers, an important employer in New Jersey. This will raise the price of medicines for everyone who does not get them from the government for free;

• A new tax on “Cadillac” health plans. This is a tax of up to 55% on any health insurance that costs over about $800 per month including employee and employer contributions. This tax does not apply if you are a union member or your plan is from AARP or Blue Cross Blue Shield of Michigan;

• There is a new tax on all “for-profit” health insurance companies (except for a few favored ones). This will also raise the costs of premiums for everyone not getting free care from the government.

Now factor in the new Federal bureaucracy that will be needed to run this juggernaut and pry in to your personal health affairs:

• IRS agents verify if you have “acceptable” health care coverage;
• IRS has the authority to fine you up to $2,250 or 2 percent of your income (whichever is greater) for failure to prove that you have purchased “minimum essential coverage”;
• IRS can confiscate your tax refund;
  IRS audits are likely to increase;
• IRS will need up to $10 billion to administer the new health care program this decade;
• IRS may need to hire as many as 16,500 additional auditors, agents and other employees to investigate and collect billions in new taxes from Americans;
• Nearly half of all these new individual mandate taxes will be paid by Americans earning less than 300 percent of poverty ($66,150 for a family of four).

Don’t like these intrusions? Don’t worry, if you are an illegal immigrant the law exempts you. Native citizen or legal immigrant? Welcome to the Brave New World of ObamaCare.