FixHealthCarePolicy

White House Admits Obamacare’s Individual Mandate is a Tax

Throughout his presidential campaign, then-candidate Barack Obama promised the American people: “If you’re a family that’s making $250,000 a year or less, you will see no increase in your taxes.” After he became President, Barack Obama reiterated that pledge, promising the American people in his September 9th health care press conference: “The middle-class will realize greater security, not higher taxes.” But Obamacare does contain tax hikes. Tons of them. From taxes on tanning beds to taxes on employment and investments, Obamacare is a certified job-killing machine.

None of these taxes touches the lives of every American as closely as the individual mandate to purchase health insurance. For the first time in American history, Obamacare forces all Americans to purchase a product or face sanction from the Internal Revenue Service. This is clearly a tax, as pointed out by ABC News’ George Stephanopoulos during a September 20th interview with the President himself. In an exchange that can only be described as “Clintonesque” Stephanopoulos pressed President Obama to admit his individual mandate was a tax. But President Obama refused to acknowledge reality and denied it. Stephanopoulos was forced to read the definition of “tax” straight from Merriam Webster’s Dictionary. But even then Obama refused to come clean: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. … Nobody considers that a tax increase.” Well nobody but President Barack Obama’s Justice Department.

The New York Times confirmed Friday that in preparation for defending constitutionality of the Obamacare individual mandate in court, an Obama Justice Department legal brief argues that the penalty used to enforce the mandate is “a valid exercise” of Congress’s power to impose taxes. Mr. Obama’s own Justice Department further repudiates the President’s earlier statement by noting that the penalty is imposed and collected under the Internal Revenue Code, people must report it on their tax returns, and that the Congressional Budget Office estimates that it will cost Americans $4 billion a year. Yale Law School professor Jack Balkin told a meeting of progressive activists last month that President Obama “has not been honest with the American people about the nature of this bill. This bill is a tax.”

The fact that the Obama administration and their allies are now admitting the individual mandate is a tax betrays their very real fear that the Supreme Court could find Obamacare’s individual mandate unconstitutional. In the bill itself, Congress identified the Commerce Clause as the source of their authority to force all Americans to buy health insurance. But as our legal team has made eminently clear, the mandate does not purport to regulate or prohibit commerce of any kind. To the contrary, it purports to “regulate”—and penalize—inactivity. If the Supreme Court allows the Obamacare individual mandate to stand, then Congress could do anything it wanted. They could: require us to buy a new Chevy Impala each year to support the government-supported auto industry; require us to buy war bonds to pay for the Iraq and Afghan wars; or force us to eat our vegetables.

But even if the Obama administration is now admitting the individual mandate is a tax, that still does not make the law constitutional. Rather than operating as a tax on income, the mandate is a tax on the person and is, therefore, a capitation tax. Therefore the 16th Amendment’s grant of power to Congress to assess an income tax does not apply. The Constitution does allow Congress to assess a capitation tax, but that requires the tax be assessed evenly based op population. That is not how the Obamacare mandate works. It exempts and carves out far too many exceptions to past muster as a capitation tax. The Obamacare mandate is still unprecedented and unconstitutional.

But perhaps more importantly, what does the episode say about the integrity of the White House? The President went on national television and insisted in unequivocal terms that his individual mandate was not a tax. Now his administration is saying the exact opposite. At what point do the American people lose all faith in this President’s word?

Tags: constitutionality, Individual Mandate, job killer, ObamaCare, taxes

Obamacare Hits Small Businesses Tomorrow With Arrival of Tanning Tax

Thanks to a new tax that takes effect tomorrow, some small-business owners will get a first-hand look at Obamacare’s impact.

“The first present we get under this new health care law takes effect this week — and that is the tanning tax,” lawyer and small-business advocate Karen Harned said yesterday at The Bloggers Briefing, hosted by The Heritage Foundation.

The tax will hit small-business owners particularly hard, said Harned, who directs the Small Business Legal Center of the National Federation of Independent Business.

Approximately 19,000 “mom and pop” small businesses might be affected by the new tax — and those businesses will likely spend an average of more than $74 an hour to comply with federal tax paperwork burdens, according to a factsheet distributed by the NFIB.

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Tags: NFIB, ObamaCare, small business owners, tanning bed, taxes

Video: Health Care Reform Timeline

The White House knows its signature health care legislation is still deeply unpopular with the American people, which is why it has been desperate to speed up implementation as much as legally possible. But many of the law’s new costs and limitations are still scheduled to kick into effect years down the line, when Congress hopes voters aren’t paying attention anymore.

A new Foundry video illustrates the health care implementation timeline (pdf) researched by the Heritage health care team.

Think you can keep your current plan? Think seniors and the disadvantaged will get a fair shot at the care they want and need? Watch and find out. For more information on the side effects of Obamacare, visit the Side Effects blog.

Tags: deeply popular, implementation timeline, ObamaCare, Side Effects, taxes

The Road to Repeal is Well Under Way

“We have to pass the bill so that you can find out what is in it,” Speaker Nancy Pelosi (D-CA) told us just weeks before Congress passed President Barack Obama’s health care plan. Well, the nation’s post-passage Obamacare education continued yesterday when the Congressional Budget Office (CBO) confirmed that the federal government will have to spend an additional $115 billion implementing the law, bringing the total estimated cost to over $1 trillion. The estimate had been requested before passage of the bill by Rep. Jerry Lewis (R-CA), but the CBO was too overwhelmed with the Democrats’ other constant revisions to the law to get back to Lewis before the final vote.

This is by far not the only nasty little surprise that has come back to bite Obamacare after passage. Shortly after it became law, U.S. employers began reporting hundreds of millions if dollars in losses thanks to tax changes in the bill. AT&T and Verizon alone pegged their Obamacare tax losses at around $1 billion each. At first, Democrats in Congress were outraged by the announcements and threatened to hold hearings persecuting these companies. But then the Democrats not only found out the companies were obligated by law to report their Obamacare related losses, but that the losses were a signal these companies might have to dump their employees’ and retirees’ health care coverage all together.

Then the Obama administration’s own Centers for Medicare and Medicaid Services (CMS) released its final cost projections for Obamacare, finding that, contrary to White House claims, the legislation will increase national health care spending by $311 billion over the next decade. The CMS report also revealed that: 1) 18 million Americans will pay $33 billion in penalties for failing to comply with Obamacare’s individual mandate and still receive no health care; 2) U.S. employers will pay $87 billion in employer mandate penalties; 3) 14 million Americans will lose their current employer-based health coverage; 4) 7.4 million seniors will lose their current Medicare Advantage benefits; 5) 15% of all Medicare providers will be made unprofitable, thus “jeopardizing access to care for beneficiaries.”

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Tags: "tangible benefits", $1 trillion, higher insurance premiums, House Speaker Nancy Pelosi, Medicare Advantage cuts, ObamaCare, President Barack Obama, taxes

Senate Health Care Timeline

Obamacare is still just one signature away from becoming law, but the battle over its repeal has already begun. Key to this debate will be which elements of Obamacare phase in when. Back in December after Obamacare first passed the Senate, Heritage Foundation scholar Robert Book produced the following chart (pdf) detailing how the policy is scheduled to be implemented between 2010 and 2017. Highlights from each year include:

2010: Physician Medicare payments decrease 21% effective March 1, 2010

2011: “Annual Fee” tax on health insurance, allocated according to share of total premiums. Begins at $2 billion in 2011, then increases to $4 billion in 2012, $7 billion in 2013, $9 billion in the years 2014, 2015, and 2016, and eventually $10 billion for 2017 and every year thereafter. Two insurers in Nebraska and one in Michigan are exempt from this tax.

2012: Medicare payment penalties for hospitals with the highest readmission rates for selected conditions.

2013: Medicare tax increased from 2.9% to 3.8% for incomes over $250,000 (joint filers) or $200,000 (all others). (This is stated as an increase of 0.9 percentage points, to only the employee’s share of the FICA tax.) (more…)

Tags: Individual Mandate, Medicare physician payments, ObamaCare, repeal the bill, taxes

ObamaCare’s Biggest Losers

A recent study by the Urban Institute, a prominent liberal think tank, lists “the biggest losers” should congressional health care legislation fail to become law. Interestingly enough, this is oddly similar to an earlier Heritage Foundation assessment of the “biggest losers”—if the liberal bills do become law. Here, we outline how Urban’s biggest losers would actually be worse off under Obamacare than under the current system: (more…)

Tags: biggest losers, low-income families, self-employed, small business owners, taxes, Urban Institute

Obamacare Increases Unemployment, Insurance Premiums, Deficit, and Debt

President Barack Obama and congressional leaders claim that the Senate health bill, which will likely face a vote in the House by the end of the week, will decrease the deficit and bend the cost curve related to health care spending. However, recent analysis by The Heritage Foundation’s Center for Data Analysis (CDA) shows that this is far from true. Instead, the bill’s mandates and numerous new taxes will have tumultuous effects. Passing Obamacare will come at the expense of the American people as it would grow the federal debt, increase premiums, and stifle economic growth.

The Senate bill would have disastrous effects on the economy and federal spending. CDA shows that the bill:

– Increases the federal deficit and national debt. The Congressional Budget Office shows deficit neutrality for the Senate bill—however, this is based on static analysis which ignores the effects new taxes and an individual and employer mandate would have on economic growth. These provisions would decrease investment in the economy, resulting in lower wages and salaries. This means less taxable income, lowering federal revenues and growing the debt. Increased borrowing puts upward pressure on interest rates causing some private sector productive investment opportunities to be foregone. This also increases the interest owed on the national debt, such that the government would pay, on average, $20 billion more in interest between 2010 and 2020. By the end of the decade, CDA estimates the publicly held debt would be $755 billion dollars more than under current law. (more…)

Tags: deficit, jobs, mandates, national debt, premiums, senate health care bill, taxes, unemployment

Video of the Week: “We have to pass the bill so you can find out what is in it”

You might have seen this week a stunning demonstration of political condescension on the health care front. In remarks at the 2010 Legislative Conference for the National Association of Counties, House Speaker Nancy Pelosi said, “But we have to pass the bill so that you can find out what is in it, away from the fog of controversy.”

This revealing comment reinforces a patriarchal (or in Pelosi’s case matriarchal) attitude Congress has taken with the American public: What lurks within the House and Senate health care bills will be revealed in the fullness of time, and it’s really good for us if we only knew better. (more…)

Tags: House Speaker Nancy Pelosi, Individual Mandate, ObamaCare, reconciliation, Senate Health Bill, taxes, taxpayer-funded abortions

Morning Bell: A Sham of a Summit for a Sham of a Bill

Today’s White House-sponsored health care summit is an insult to the intelligence of every honest American. President Barack Obama’s communications minions are still trying sell his plan as an “opening bid” in the health care debate. But as Washington Post columnist Ruth Marcus asks: “With whom is he bidding? The public dance is with Republicans, but this is hardly serious. The White House does not enter Thursday’s summit expecting Republicans to make a deal.” In fact, the President’s recently-unveiled plan is specifically designed to be passed without a single Republican vote. That is why the Washington Post reports this morning:

Although Obama is billing the White House gathering as an opportunity for Republicans to air their ideas for reform, Democrats do not expect it to reveal much common ground and are showing little willingness to abandon the basic outline of legislation that the House and Senate have approved.

The real target of today’s summit are the 38 Democrats in the House who voted against Obamacare the first time. While Obamacare passed the House 220-215, Speaker Nancy Pelosi (D-CA) told reporters yesterday she is not sure if she has the votes this time around. The passing of Rep. John Murtha (D-PA) and the retirements of Reps. Robert Wexler (D-FL) and Neil Abercrombie (D-HI) have cost her three votes, and the inclusion of taxpayer-funded abortions in the Senate and White House plans will cost the vote of the only Republican to vote for the plan the first time around, Rep. Joseph Cao (R-LA), as well as Rep. Bart Stupak (D-MI) and 15 to 20 additional pro-life Democrats. (more…)

Tags: Health Care Summit, health insurance, President's proposal, start over, taxes

The President’s Health Proposal: Further Jacking Up the Cost of Care

In anticipation of the February 25^th health care summit with members of Congress, the President released his proposal for pricey, government-run health care. The White House estimates the cost of the proposal to be $950 billion over a decade, decreasing the federal deficit. However, health policy expert James Capretta, a former senior official of the Office of Management and Budget (OMB), shows in a recent paper that this is not only inaccurate, but far from reality.

Capretta’s research shows that ten full years of implementation of the President’s proposal would cost closer to $2.5 trillion, with the strong likelihood of far exceeding this amount. Here’s how:

• The President’s proposal ignores “doc fix” legislation, which would cost roughly $200 billion over ten years. As Capretta notes, it is ironic that the President does not account for this provision, but includes several other Medicare provisions in his proposal.

• Non-coverage spending would add about $90 billion to the cost of the bill.

• Cost estimates for the President’s plan should apply to the ten year window from 2011 to 2020—not to 2019. This would add approximately $200 billion more to the cost of the bill. (more…)

Tags: CLASS Act, doc fix, health care costs, ObamaCare, OMB, President's proposal, taxes