“Your Taxes Won’t Go Up By A Single Dime”

30 Oct, 2009 by McQ

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Wasn’t that the promise? Well Americans For Tax Reform have looked at the 1990 pages of the House monstrosity and found 13 taxes that will indeed raise yours by much more than a “dime” [HT: United Liberty]. Here are just three of them. You can take a look at the entire list here. [pdf]

• Employer Mandate Excise 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 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
• Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
• Individual Mandate Surtax (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.

As everyone has been saying since the beginning of the debacle, there is no way this can be paid for without increasing taxes – and not just on the rich. Why that seems to fall on deaf ears in some circles remains a mystery to me. While the taxes may not effect everyone, they certainly effect a large portion of the public. For instance:

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to
the general pulic.

Does anyone want to try to make the argument that the 2.5% tax at the wholesale level will be paid at that level and not passed on to the consumer? Yeah, I didn’t think so.

For the masochists out there, here’s the House bill, all 1990 pages of it in pdf form. Make sure you consider the purpose: “To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.”

“… and for other purposes”. When you see that, you should know to grab your wallets and hold on tight.

[Crossposted at QandO]