ObamaCare’s New Year tax “surprises”
As 2012 draws to a close, all sorts of stories are appearing about the shocked reaction of various constituencies to the massive tax increases built into ObamaCare. These aren’t “surprises” to long-time critics of the legislation, whose every criticism has been richly vindicated over the past few years. But they’re coming as a series of jaw-dropping shocks to the people who were bamboozled by Democrat rhetoric about the program… including a number of Democrat politicians.
For example, Minnesota’s Democrat senators, Amy Klobuchar and Al Franken, just noticed that ObamaCare’s taxes on medical devices are poised to kill off “thousands of high-paying jobs that device companies support in Minnesota, headquarters to such giant devicemakers as Medtronic and St. Jude Medical,” according to the Minneapolis Star-Tribune. This has led them to agitate for a delay in the new taxes, which Klobuchar says “would give us the opportunity to repeal or reduce that tax.”
Such a repeal would knock another $28 billion out of the funding for the deficit-blasting ObamaCare, which was once hilariously advertised as “revenue-neutral” or even a cost-efficiency system that would actually reduce the deficit. But as always with Democrat schemes, once the lollipop-dispensing vote-buying machinery is in place, it is no longer necessary to pretend that Big Government can actually pay for it. We’ll pass the bills along to our children, and they’ll pass them on to their children, forever and ever.
The Star-Tribune article mentions that Klobuchar’s plea to lift the medical-device tax axe from the necks of her constitents is co-signed by Franken “and all the heavy hitters in the Senate Democratic leadership.” Does that mean these “heavy hitters” have finally figured out that tax increases kill jobs? Are the planning to make a formal announcement of this dramatic revision to Party ideology any time soon?
Meanwhile, the Huffington Post gently warns its readers that “your medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health care overhaul.”
What? What the hell is that all about? Why, we were promised ObamaCare would “bend the cost curve down.” But it’s already had the opposite effect, and now we’re getting hit with another $63 surcharge? Why weren’t we warned about this? Well, it’s because the change was “buried in a recent regulation.” It will take the form of “multi-million dollar assessments” that companies have little choice but to pass along to their employees.
Where’s all this money going? Much of it will pour into “a fund administered by the Health and Human Services Department,” where it will “be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems.” $5 billion of it will vanish into the bleak void of the U.S. Treasury, “apparently to offset the cost of shoring up employer-sponsored coverage for early retirees?” Apparently?
Of course, you were told Obama and his brilliant central planners could predict everything, and easily run the nation’s health care from Washington better than millions of Americans making their own decisions possibly could. Then again, Nancy Pelosi did chirp that we would need to pass ObamaCare to find out what was in it. Well, it turned out to be stuffed with tax increases. Surprise!
And there are plenty more to come. The $63 surcharge described by the Huffington Post is just one small part of “a bigger package of taxes and fees to finance Obama’s expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.”
Whoa… you mean Barack Obama has already raised taxes on the people he wants to soak for “deficit reduction?” You betcha! And it’s an especially dishonest, economically damaging tax, as Bloomberg News explains:
In the debate over the looming fiscal cliff, U.S. President Barack Obama often plays down any adverse economic impact from letting the 2001 and 2003 tax cuts expire for high-income Americans, claiming that the top tax rates would merely return to where they were during the Clinton years.
Unfortunately, the president’s claim is incorrect because he ignores the impending arrival of the unearned income Medicare contribution tax, which will further raise tax rates on income from saving.
Scheduled to take effect on Jan. 1, the tax, which was adopted as part of the 2010 health-care law, is a 3.8 percent levy on interest, dividends, capital gains and passive business income received by taxpayers with incomes exceeding $200,000 (or $250,000 for couples).
Because the new tax was added to the health-care law late in the process without congressional hearings, it received little attention at the time. With only a few weeks left before it takes effect, it remains largely unknown.
What we do know about this tax is that even its name is a total fraud:
One problem with the unearned income Medicare contribution tax is the name Congress chose for it, which is a triple misnomer. The income that will be subject to the tax isn’t unearned — it is earned by savers who receive market rewards for delaying consumption and providing funds to finance business investment.
Also, because the proceeds will be paid into the general treasury, the tax will have no financial link to Medicare. And, of course, the tax will be a compulsory payment, not a voluntary contribution.
I’m sure we’ll find out more about it when hapless taxpayers get fined by the IRS for failure to comply with every paragraph of its hastily-written 42 pages of regulations. The economic damage from a surtax on savings and investment will make themselves felt much sooner. And just wait until anyone who tries to repeal this tax is pilloried for protecting the “unearned income” of those despicable fat-cat Scrooges by class warriors!
It’s insane that Republicans ever allowed themselves to get outmaneuvered on the issue of middle-class tax reduction by Barack Obama. Here’s Step One for taking the issue back: propose a huge middle class tax reduction by demanding the full repeal of a debt-exploding program that polls have consistently shown they hate. Repeal ObamaCare.