Obamacare: It’s not over yet

March 25, 2010 | By Amanda J. Reinecker

Obamacare: It’s not over yet

On Tuesday, just 36 hours after the House of Representatives voted, President Obama signed into law the massive health care reform bill. Despite its tremendous policy flaws, its lack of bipartisan backing, its widespread public disapproval and its egregious constitutional inadequacies, Obamacare is now the law of the land.

» The Heritage Foundation is fighting to repeal Obamacare. Watch Ed Feulner’s video message.

But we haven’t even seen the worst of it. The new bill is about to undergo so-called “fixes” via a reconciliation bill. “You may have thought it was impossible to make the policy and process of Obamacare even worse,” writes Heritage’s Conn Carroll. “But that is exactly what this reconciliation bill does.”

According to a new analysis from Americans for Tax Reform, over the course of a decade, the reconciliation bill will add an estimated $52.3 billion in new taxes. These taxes will be levied against employers, the sick, low-income and moderate-income workers, and just about everyone else, regardless of income.


 

These so-called “fixes” are misnomers that actually fracture our economy further instead of repairing it. But even true fixes aren’t enough to correct Obamacare. As Sen. Jim DeMint (R-SC) pointed out: “This bill is unconstitutional and it cannot be fixed. It must be repealed.” The Heritage Foundation could not agree more.

On top of the harm to our economy and harm to our health care that Obamacare will inflict, this liberal success will only fuel the left’s agenda to push forward with cap-and-trade, amnesty for illegal immigrants, and other costly and harmful big-government proposals. These proposals would draw us further away from American principles like self-government and closer to a European welfare state.

“But don’t take our word for it,” writes Heritage’s Rory Cooper. “Here is audio of Congressman John Dingell (D-MI), a champion of [Obamacare] telling radio host Paul Smith on WJR in Detroit: ‘It takes a long time to do the necessary administrative steps that have to be taken to put the legislation together to control the people.'”

Our Founding Fathers established a limited government in order to protect our liberties—not to control the American people. When Patrick Henry famously exclaimed 235 years ago, “Give me liberty, or give me death,” he was making a statement that has come to define our national character.

Patrick Henry’s sentiments remain very much alive today among the American people. Though under assault from the left, “the American love for liberty [that] prevailed in our founding will prevail once again,” writes Heritage President Ed Feulner in his response to Sunday night’s vote.

It is true that the passage of Obamacare opens the doors for the left’s radically progressive agenda. But it can also serve to remind Americans of the courage of our Founders as they fought government tyranny. This is especially important, Heritage scholar Matthew Spalding writes, as we “strive to revive our commitment to liberty and self-government.”

It’s not over yet! And thanks to your support, Heritage is able to continue to fight against Obamacare.

> Other Heritage Work of Note

  • While on the road promoting his new book, “Courage and Consequence”, former White House deputy chief of staff Karl Rove took time to sit down with The Heritage Foundation’s Rob Bluey to talk about his work in the Bush administration, the current political climate, and the future of conservatism. In the interview, concluded last week before Obamacare passed, Rove shares his shock over the perversion of procedural tactics that Congress has used to push through the healthcare legislation.

    Rove went on discuss Bush’s Medicare drug benefit, the Tea Party movement, and Bush’s No Child Left Behind Act, about which he said, “It is conservative legislation. It says states are in charge. If you get federal money, a state has to have standards.” Rove also offered advice to conservatives about how we target our message: “We have to remember our target: It’s not our fellow conservatives. Our object here is to say things and make the case to people whose ears and eyes are open, but who don’t necessarily view themselves as conservatives.”

  • In spite of all of the evidence that the recently passed healthcare bill will decrease investment and eventually lead to rationing of care, the federal government seems to have overlooked a more imminent problem, says Heritage’s Jim Talent: we do not have the money to pay for this new entitlement program. Even if liberals were to re-institute the largest tax increase in U.S. history, which took place in 1993, “it would produce $71 billion annually in additional revenue — enough to fund the government’s current borrowing for just ten days.”
  • In a classic example of politicians determined not to learn from past mistakes, several members of Congress and President Obama have endorsed the creation of a federal infrastructure bank to invest in highways and transit. However, the title “bank” is a bit of a misnomer, says Heritage fellow Ronald Utt. The institution would simply provide grants and subsidies without generating any revenue through interest, very much like the failed financial institution Freddie Mac. Instead of creating a behemoth like this, Utt proposes, “Congress should instead develop legislation to create a real infrastructure bank whose assets match liabilities.”
  • Just when we thought President Obama couldn’t possibly make one more bad decision, he decided to finish the week off by nominating a radically liberal judge for the federal Ninth Circuit court, explains Heritage’s Deborah O’Malley. Goodwin Liu, a dean at Berkeley’s Boalt Hall Law School, is unabashedly outspoken about his opposition of the death penalty, his support for wealth distribution, and his view of the Constitution as largely irrelevant. But this might not be the last stop for Liu, says O’Malley. “Many pundits are speculating that the Ninth Circuit may be Liu’s stepping stone to the Supreme Court.”
  • Despite very real threats from Iran and other enemies, President Obama has refused to fully modernize our nuclear capabilities and build our defenses. Instead, the administration pursues an idealistic “road to zero” strategy, calling for nations, including our own, to surrender their nuclear ambitions and scrap missile defenses. But in a recent article for the Washington Examiner, Heritage national security expert James Carafano argues that “the continuing erosion of a credible deterrent force will only invite aggression.” We have both the capability to deter threats of attacks and the ability to stop an attack. Yet we’ve chosen neither option, and the consequences can prove fatal.

New Taxes for Health Care Help Obama ‘Spread the Wealth Around’

New Taxes for Health Care Help Obama ‘Spread the Wealth Around’

By Ryan J. Donmoyer

March 22 (Bloomberg) — President Barack Obama said on the campaign trail in October 2008 that he wanted to “spread the wealth around.” With Obama on the verge of signing sweeping health-care overhaul legislation, he’s about to do just that.

High-income investors would pay higher Medicare taxes, tax breaks for out-of-pocket medical deductions would be curtailed, and it would cost insurance companies more to pay executives millions of dollars. Those levies will help fund expansion of Medicaid services for the poor and subsidize health insurance to cover millions who don’t currently have benefits.

“It’s very clear that taxes are levied on the wealthy and the benefits will spread across the entire income distribution, with a lot going to expanded Medicaid distribution and expanding health insurance,” said Roberton Williams, an economist at the Tax Policy Center, a Washington research institute backed by the Urban Institute and Brookings Institution. “One couldn’t claim he didn’t keep that promise” to “spread the wealth around.”

In all, the bill would generate $409.2 billion in additional taxes by 2019, according to an analysis by the congressional Joint Committee on Taxation, a nonpartisan agency. The bill also imposes about $69 billion more in penalties for individuals and businesses who don’t meet mandates to buy insurance, according to the Congressional Budget Office, another nonpartisan agency.

Higher Medicare Taxes

Most of the revenue would come from higher Medicare taxes on about 1 million individuals earning more than $200,000 and about 4 million couples filing jointly who make more than $250,000.

The legislation would for the first time apply Medicare taxes to investment income received by these households beginning in 2013. The 3.8 percent rate would apply to unearned income such as realized capital gains, dividends, interest, rents, and royalties. It wouldn’t apply to other income subject to income taxes, including interest from municipal bonds and retirement accounts such as 401(k) plans until funds are withdrawn.

Obama’s budget proposes to allow the existing 15 percent tax rate on dividends and capital gains to rise to 20 percent in 2011 for the same high-earners. Layering a 3.8 percent Medicare tax on top of that would mean a new top rate on dividends and capital gains of 23.8 percent. The top tax rates on interest and rental income would rise to as high as about 44 percent, assuming other Obama tax increases on high-earners are enacted.

The bill also increases the individual’s share of Medicare tax currently imposed on salaries starting at $200,000 for individuals and $250,000 for couples to 2.35 percent, from 1.45 percent currently.

Cost to Couples

The combination of the new Medicare taxes and Obama’s budget proposals, if they were in place this year, would cost a married couple with a household income of $5 million an extra $287,100 in taxes, according to analysis by the consulting firm Deloitte Tax in Washington.

The Medicare taxes superseded an earlier Senate proposal to tax high-value employer-provided insurance coverage, dubbed “Cadillac plans.” That 40 percent excise tax was delayed until 2018, when it would begin to apply to benefits over $10,200 for individuals and $27,500 for couples.

Those thresholds would be indexed to inflation, which grows at a slower pace than the cost of health care, meaning more employers would likely face the levy over time.

Other provisions likely to affect higher-income individuals would scale back tax preferences associated with paying out-of- pocket medical expenses. Starting in 2013, Americans under 65 won’t be able to deduct medical expenses until they exceed 10 percent of income, up from 7.5 percent now; retirees would keep the lower threshold.

Savings Accounts

The bill in 2011 places new restrictions on what can be purchased using special savings accounts funded with pre-tax dollars including health savings accounts. Improper withdrawals from the accounts also would be hit with a new 20 percent tax.

And the legislation for the first time would place a $2,500 limit on what can be contributed to employer-sponsored flexible spending accounts, another type of account funded with pre-tax dollars that can be used to pay for medicines, co-payments, and other expenses.

Employers currently set their own limits, typically between $3,000 and $5,000 in the absence of a government cap. This change would cost an average worker about $625 in tax savings, according to WageWorks Inc., a San Mateo, California, company that administers 1.5 million accounts.

Tanning Salons

Consumers who frequent tanning salons would pay a 10 percent excise tax, and those who buy devices such as wheelchairs would pay a 2.9 percent excise tax. Drugmakers may pass on a $3 billion annual fee. Insurers would be denied deductions for executive pay over $500,000.

Under the reconciliation bill, individuals who don’t purchase insurance would be subject to a fine of $325 in 2015 and $695 in 2016. Individuals may be subject to a charge equal to as much as 2.5 percent of their income in 2016, if the total is greater than the flat payment.

Employers with 50 or more workers would pay $2,000 per worker if they don’t offer health insurance. The legislation offers a small business tax credit to help pay for employer- provided premiums.

To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net;

Last Updated: March 22, 2010 00:01 EDT

Obamacare Isn’t Inevitable ‘Nil desperandum” — never despair. That is a sentiment that conservatives need to take to heart now that Congress has narrowly passed a bill that simultaneously undermines life, liberty, and the pursuit of happiness.

Obamacare Isn’t Inevitable

 ‘Nil desperandum” — never despair. That is a sentiment that conservatives need to take to heart now that Congress has narrowly passed a bill that simultaneously undermines life, liberty, and the pursuit of happiness.

It takes some ingenuity to add to the costs, inefficiency, and dysfunctions that government has already bequeathed to our health-care system, but the Democrats have proven themselves up to the challenge. Almost nothing about this legislation is free of dispute, but we are convinced that it will increase taxes, increase premiums, and increase debt, while decreasing economic growth, job growth, and the quality of health care.

The Democrats had no mandate to take these steps. In 2008, the president campaigned both against forcing people to buy insurance and against taxing their benefits. The legislation runs counter to the campaign on both points. The president promised to change Washington. He has made its stench more noisome, winning this vote by using every kind of deceit and (legal) corruption, and over the objection of a bipartisan coalition representing most Americans.

We are now being told that the campaign to repeal this legislation is over before it has even begun, that Americans will come to appreciate the benefits that a bountiful government is giving them, and that the growth of the welfare state can never be reversed. We understand the odds against repeal. We understand, indeed, that complete repeal of every provision of the bill is impossible. The doughnut hole — a gap in Medicare’s prescription-drug coverage designed to encourage seniors to economize — has been filled, and it is not going to be re-opened.

But the larger thesis seems as superficially plausible, and as ultimately convincing, as were earlier predictions that state socialism or secularization were our inevitable future. It is quite possible that the majority of America that rejects this legislation will get its way in the next few years — if it is given the right leadership. And it is worth the effort to try.

It is possible, for example, that the results of the legislation will turn out to be unpleasant more quickly than most observers realize. The bill requires insurers to charge people with pre-existing conditions the same as everyone else, and the only reason for people not to game the system — dropping their insurance until they get sick and the insurer has to take them — is because the law requires them to buy insurance or pay a fine. For many people, the fine will be a cheap price to avoid paying high premiums. The effect of the legislation could be to cause the number of healthy people with insurance to fall dramatically — and for premiums to rise, which would cause more people to drop their insurance. If this happens, we can expect liberals to agitate for a single-payer system; but we can also expect the public to blame the Democrats whose health-care system it will now be. A less lopsidedly Democratic Congress is not going to respond to this chaos by enacting single payer or strengthening the fines.

For that matter, the lengthy legislation could turn out to have little time bombs, the nature of which cannot currently be guessed. Nothing about the process that produced the legislation, after all, suggests that it was put together with careful consideration. Conservatives will be able to capitalize on the discrediting of Obamacare, however it takes place, only if they campaign this fall on a pledge to replace this government-heavy system with true reform. Republicans running against Democrats who voted for this legislation will have the easiest task. But even Republicans running against Democrats who voted against it can advance the cause by challenging those Democrats either to advocate repeal and replacement themselves or to expose themselves as false opponents of Obamacare.

Nor have pro-lifers lost the war. Pro-lifers should campaign this fall on a pledge to make the Hyde amendment — the partial ban on government funding of abortion, which now applies to portions of federal spending and has to be renewed each year — a permanent feature of law that applies to all federal spending. The Obama administration and most of liberaldom have pretended over the last year to favor both the principle in general and the Hyde amendment in particular. And the principle is popular. Their posturing, disingenuous though it was, has handed pro-lifers a winning issue.

The Democrats have abused the system, ignoring both the Founders’ design and public opinion. The first step toward undoing that abuse is to make them pay a political price for it.

Vatican official on Saturday attacked US President Barack Obama for “arrogance”

A senior Vatican official on Saturday attacked US President Barack Obama for “arrogance” for overturning a ban on state funding for family-planning groups that carry out or facilitate abortions overseas.It is “the arrogance of someone who believes they are right, in signing a decree which will open the door to abortion and thus to the destruction of human life,” Archbishop Rino Fisichella was quoted as saying by the Corriere della Sera daily.

Fisichella is president of the Pontifical Academy for Life, one of a number of so-called pontifical academies which are formed by or under the direction of the Holy See.

“What is important is to know how to listen… without locking oneself into ideological visions with the arrogance of a person who, having the power, thinks they can decide on life and death,” he added.

Obama signed the executive order cancelling the eight-year-old restrictions on Friday, the third full day of his presidency.

The so-called “global gag rule” cut off US funding to overseas family planning clinics which provide any abortion services whatsoever, from the operation itself to counselling, referrals or post-abortion services.

“If this is one of the first acts of President Obama, with all due respect, it seems to me that the path towards disappointment will have been very short,” Fisichella said.

“I do not believe that those who voted for him took into consideration ethical themes, which were astutely left aside during the election debate. The majority of the American population does not take the same position as the president and his team,” he added.

The order won Obama praise from Democratic lawmakers, family planning and women’s rights groups but drew angry condemnation from pro-life organisations and Republicans.

More than 250 health and human rights organisations from around the world sent Obama a letter, thanking him for ending a policy “which has contributed to the deaths and injuries of countless women and girls.”

Election ’08 Backgrounder

  

Financial Crisis | Iraq | Defense | Background & Character | Judges & Courts | Energy

 

FINANCIAL CRISIS

Quick Facts:

  • Democrats created the mortgage crisis by forcing banks to give loans to people who couldn’t afford them.
  • In 2006, McCain sponsored a bill to fix the problems with Fannie Mae and Freddie Mac.  Barney Frank and other Democrats successfully opposed it.
  • Obama was one of the highest recipients of Fannie Mae and Freddie Mac donations in Congress.

Related Editorials

 

IRAQ


Quick Facts:

  • When the U.S. was on the verge of losing in Iraq, McCain chose to stand and fight.  Obama chose retreat.
  • Even after the surge succeeded, Obama told ABC’s Terry Moran he would still oppose it if he had the chance to do it all over again.

Related Editorials

 

DEFENSE

Quick Facts:

  • Obama has promised to significantly cut defense spending, including saying “I will slow our development of future combat systems.”
  • John McCain has vowed: “We must continue to deploy a safe and reliable nuclear deterrent, robust missile defenses and superior conventional forces that are capable of defending the United States and our allies.”

Related Editorials

Obama Video: Watch Now

 

 

BACKGROUND & CHARACTER

Quick Facts:

  • Obama voted “present” 135 times as a state senator, and according to David Ignatius of the Washington Post, “gained a reputation for skipping tough votes.”
  • McCain has taken stances unpopular with his own party and/or the public on controversial issues, including immigration, campaign finance reform, judicial nominations, the Iraq War and more.

Related Editorials

 

 

JUDGES & COURTS


Quick Facts:

  • In a 2001 interview, Obama said he regretted that the Supreme Court “didn’t break free from the essential constraints that were placed by the Founding Fathers in the Constitution.”
  • In the same interview, Obama criticized the Supreme Court because it “never ventured into the issues of redistribution of wealth and sort of more basic issues of political and economic justice in this society.”
  • Obama has focused on empathy, rather than legal reasoning and restraint, as his basis for appointing judges, saying, “We need somebody who’s got the heart, the empathy…to understand what it’s like to be poor, or African-American, or gay, or disabled, or old.”
  • McCain opposes judicial activism, saying, “my nominees will understand that there are clear limits to the scope of judicial power.”

Related Editorials

Obama 2001 Interview: Listen Now

 

ENERGY


Quick Facts:

  • McCain has proposed building 45 new nuclear plants by 2030 and is in favor of drilling in sectors of the Outer Continental Shelf.
  • Obama has refused to take a stand, saying only “we should explore nuclear power as part of the energy mix” and he will “look at” drilling offshore.

Related Editorials

»
McCain: The Energy Candidate

» McCain On Nukes: Yes We Can
» Breaking The Back Of High Oil

 

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Obama’s Tax Plan and Small Businesses

10/7/2008

Obama’s Tax Plan and Small Businesses

Statistics about Business Size (including Small Business)

http://www.census.gov/epcd/www/smallbus.html

 

Filed under: 2008 Election — DRJ @ 10:25 pm

[Guest post by DRJ]

At tonight’s Town Hall Presidential debate, I think Barack Obama said this about his tax policies [EDIT: according to the CNN transcript]:

“Only a few percent of small businesses make more than $250,000 a year. So the vast majority of small businesses would get a tax cut under my plan.”

The US Small Business Administration (SBA) defines a “small business” according to its average annual receipts or the number of its employees. Here are examples from the SBA’s Table of Small Business Size Standards setting forth the maximum average annual receipts by industry that a business can have and still be classified as a small business:

Crop production of all types — $750,000
Animal production except for cattle & chicken/eggs — $750,000
Cattle feedlots — $2.5M
Chicken/egg production — $12.5M
Forestry & logging — $7M
Fishing — $4M
Irrigation, sewage, water supplies — $7M
Housing construction — $33.5M
Heavy and civil engineering construction — $33.5M
Dredging and cleanup — $20M
Concrete, framing, and other housing contractors — $14M
Car dealers — $23-29M
RV, motorcycle, & boat dealers — $7M
Furniture, hardware, clothing & sporting good stores — $7M
Electronic stores — $9M
Supermarkets, gas stations & department stores — $27M
Pharmacies — $7M

There are many more examples at the link. In addition, most of the industries in the Table — such as manufacturers of food, beverages, apparel, print, oil/gas, plastics, plumbing, machinery, computers, electronics, electrical, transportation, and furniture — are considered small businesses based on their total number of employees instead of average annual receipts. In those industries, the cut-off between small and large businesses ranges from 500-1,000 employees per business/industry.

It’s difficult for me to imagine a business that has 50 or more employees (let alone 500-1,000) that has receipts of less than $250,000 per year. And, given the SBA definitions of “small business,” it seems likely that many small businesses in a wide range of industries have receipts of more than $250,000 per year.

If so, it is appalling that Obama would imply that, if he is President, a small percentage of businesses exceed the $250,000 per year cut-off for increased taxation under his tax plan. In fact, the number of businesses subject to additional tax may be large and could well be the 50% number I think John McCain mentioned.

Small businesses are vital to the American economy and Americans’ livelihoods, and it sounds like Obama wants to tax as many as he possibly can.

– DRJ