Posts Tagged ‘tax’
In the News
November 9, 2009Yes, $2.6 Trillion! A Closer Look at the Full 10 Years of Spending in the House Health Bill
House Speaker Nancy Pelosi and the House Democratic leadership are frantically trying to find enough votes to pass their giant 2,032 page health care legislation this weekend. But before Speaker Pelosi and liberals in Congress pass their big bill, the American taxpayers should be fully aware of the full price tag of this monster.
As Heritage analysts noted earlier in the week, the Congressional Budget Office released its preliminary score of the bill (H.R. 3962) but too many in the media have not been reporting its true cost. The true cost is not the net spending on only the coverage related provisions ($897 billion) but rather the total gross spending for the coverage provisions ($1.05 trillion) as well as any additional spending in the bill (approximately $217 billion). That would raise the plan’s price tag to about $1.5 trillion when including the roughly $210 billion cost of the “doc fix” is included. The “doc fix” refers to the undoing of the flawed Medicare payment update formula, which Congress created but has routinely stopped from being enforced. Under current law, that formula would result in a 20 percent reduction in doctors’ pay under the Medicare program. (more…)
Tags: debt, deficit, Medicare, Nancy Pelosi, Obama Health Care Plan, spending, tax, trillion
In the News
September 23, 2009Passing a Shell of A Bill: Congress’ Secret Plan to Ram Through Health Care Reform
With the President and Congress’s plan to pass comprehensive health care reform reaching increasingly high levels of unpopularity, and reconciliation becoming an impediment, the leadership of the Senate is rumored to be preparing a new secret plan to railroad the bill through the Senate in record time by using a seldom used parliamentary procedure.
Their plan is to proceed to a House passed non-health care bill to provide a shell of legislation to give Obamacare a ride to the House then to the President’s desk. Sound confusing? We lay out the steps below, but essentially the Senate would pass health care reform as an amendment to a completely unrelated bill so the Senate and House could act quickly and without further debate. Even worse? Nobody really knows what that legislation looks like but they plan on voting for it anyway.
Right now, the Senate Finance Committee is in the midst of marking up health care reform “legislation.” Due to Senate procedure, what they are actually marking up is a 200+ page conceptual framework of the actual legislation, not a real bill. That means that not only has no Senator even read the bill but, there is a high probability that the bill hasn’t even been written yet. If the Committee sticks to their artificial deadline of completing work by this Friday then they would have passed a conceptual document reforming the nation’s health care system, spending trillions, without ever seeing an estimated 1,500 pages of legislation, which may or may not be written.
The current plan is to start debate on Obamacare as early as next week under the following four-step scenario: (more…)
Tags: baucus, finance committee, Harry Reid, HELP committee, Obama Health Care Plan, ObamaCare, reconciliation, tax
Latest Research
September 3, 2009Mr. President: End the Health Tax Unfairness
The current tax treatment of health insurance is in need of change, but President Obama and Democrats in Congress hesitate to even bring up the issue.
Heritage’s Dr. Stuart Butler outlines current policy:
“Employers receive a tax deduction for contributing to insurance coverage for their employees, as they do for most forms of employee compensation. But health insurance premium contributions are also excludable from the employee’s taxable income, at an estimated cost to the government of $210 billion in 2006.”
As Dr. Robert Helms of the American Enterprise Institute explains, the tax exclusion arose through something of a historical accident:
“During World War II, the War Labor Board…ruled that company-provided fringe benefits…were to be excluded from wartime wage controls. Since companies were unable to raise wages, this gave them an incentive to expand health insurance and pensions as a way to compete for scarce labor. The exclusion of company-sponsored health insurance from taxable income was continued…after the war”
The current tax exclusion is unfair since it “is unavailable to the millions of working families who do not have employer-sponsored insurance, and it disproportionately subsidizes employees in higher tax brackets, who typically also receive more generous coverage,” writes Dr. Butler.
Heritage analysts recently suggested:
“The best way to change the current tax treatment would be to replace the existing tax exclusion with a more equitable and efficient system of individual tax relief, leveling the playing field for robust competition among insurers and creating a level of consumer choice that is routine in every other sector of the American economy.
Short of that, Congress could limit or cap the exclusion, perhaps only for income tax purposes, while simultaneously using the new revenue to provide health care tax credits for taxpaying households. The government could also provide vouchers—which, for lower-income households, could be combined with the credit—so that more individuals and families can afford health insurance.”
Experts like Dr. Helms argue that even a modest cap would lead to a more efficient system:
“[A tax cap] ends the open-ended tax policy that has induced expansive benefits and cost-inefficient health delivery. Under the tax [exclusion]…employers and employees (and their unions) have had strong incentives to expand tax-free health insurance relative to taxable cash wages. The result has been a gradual increase in the scope of benefits with little regard to the cost-effectiveness of the covered medical services. A limit on what could be treated as an exclusion to taxable income would make it mutually beneficial for both employers and employees to redesign their health insurance policies…any additional tax could be avoided if the employer were willing to offer its workers a more cost-effective policy that does not exceed the cap. Under the present, open-ended tax policy, there have been very weak incentives for employers or employees to consider such changes.”
Tags: health care, tax
Latest Research
July 23, 2009Senator Kerry’s Tax on Health Insurance Companies Would Hit Everyone with Insurance
Taxing health insurance companies is a bad, backdoor alternative to the more sensible, more transparent policy of capping the exclusion for employer-sponsored health insurance.
Read more here.
Tags: health reform, tax
In the News
July 10, 2009Democrats at Odds on Financing Reform
The New York Times reports that House and Senate Democracts “appeared on Thursday to be on a collision course over how to pay for a sweeping overhaul of the nation’s health care system.” House members have called for taxing the rich while senators “have all but dismissed [the idea] as unworkable.”
Tags: Democrats, health care system, tax
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