The proposed excise tax on “Cadillac” health care plans is raising a lot of controversy. Opponents, like Health Care for America Now (HCAN), believe that it might affect middle class Americans and instead, urge increasing the income tax on families making more than $250,000 per year. They’re touting their plan with ads like this one:
The commercial is paid for by HCAN, which is a section 501(c)(4) issue advocacy organization. The organization describes itself as “a national grassroots campaign of more than 1,000 organizations in 46 states representing 30 million people dedicated to winning quality, affordable health care we all can count on in 2009.”
I have seen a lot of articles in the paper about taxing sodas and foods that are bad for you. I say, “Why not?”
I used to be a smoker. At one point, I was up to two packs a day. When New Jersey raised their cigarette tax, I stopped because my cigarettes were almost twice as expensive as when I had started smoking. I couldn’t afford it anymore. You know what? It was the right choice. I am healthier today because I stopped smoking. And I might not have done it if cigarettes were the same price as before.
I think this idea of taxing unhealthy behavior is a smart one. I think we should tax things that make us sick: cigarettes, alcohol, fatty foods and sugary foods. I know that people don’t like the idea of the government telling them that they shouldn’t do things like eat foods that are bad for you but all of these things are adding to our health care problem. I don’t think it’s fair that I should have to pay for health care for people who didn’t stop smoking or who eat too much. And I have read that most of the cost of health care in the US is to pay for diseases and sicknesses that could have been prevented with a better lifestyle.
I’m not saying that you shouldn’t be able to buy cigarettes, beer and candy but I do think if you do continue to buy those things, you should pay more. Maybe some people will stop because of the cost. And those that don’t will pay for their own health care. If this happens, maybe we won’t have to raise income taxes to pay for health care.
Despite President Obama’s plan to push through a massive health care reform bill before the August break, it will not happen.
Sen. Harry Reid (D-NV) said about the bill, “I think that it’s better to have a product that is one that’s based on quality and thoughtfulness rather than trying to jam something through.” Sen. Reid promised to take the bill up again in the fall.
His remarks were echoed by many in Congress, especially among Republican Senators.
What seems to be the major sticking point? How to pay for the $1 trillion plan, of course!
House Democrats think they have a plan to pay for health care reform. And yes, it’s going to cost… somebody.
The 1000+ page health care plan as proposed by President Obama comes with a hefty price tag. Congress has been charged with coming up with the funds for the plan. That isn’t proving to be very easy.
But the Dems have an idea. They’re proposing a federal surtax on upper income taxpayers. Who fits the bill? Married couples who earn between $350,000 and $500,000 would see a 1% increase; married couples earning between $500,000 and $1,000,000 would see a 1.5% increase; and married couples more than $1 million a year would pay an additional 5.4%. For purposes of the surtax, income would include wages and capital gains. The new income tax would raise more than $500 billion over the next decade.
When the dust settles, upper class taxpayers or no, the plan calls for raising taxes. House Ways and Means Committee Chairman Charles Rangel tried to soften the blow by explaining that the surtax “causes the least amount of pain on the least amount of people.”
Again, still raising taxes. That worries some Dems in an election year. It especially worries House Dems since the rumor-mongers suggest that the Senate isn’t planning to offer a sister proposal. It would be a “yes” for higher taxes when the bill has no real chance of going anywhere. Don’t you just love Congress?
The proposed health care reform bill would not just affect individuals. Under the proposal, employers who don’t offer “affordable” (whatever that means) health insurance to their workers would face a penalty equivalent to a percentage of payroll. Businesses with payrolls of $250,000 or less than $250,000 would be exempt; the penalties would start at 2% and would rise to 8% of payroll, depending on the size of the employer. The US Chamber of Commerce claims that, based on U.S. Census data for average wages, a small business with between 10 and 14 employees would face a 4% tax under the plan, while one with 15 to 19 employees would be taxed at 6% of payroll.
Additional corporate tax provisions have been included because, um, I guess there wasn’t anywhere else to put them. Those provisions affect interest allocation and the economic-substance doctrine.
The good news? There’s enough in the health care proposals so far to annoy everyone!
Of course, the bill hasn’t even made it to committee yet. Don’t expect much.
Don’t call it the Obama health care tax.
On Sunday, Health and Human Services Secretary Kathleen Sebelius clarified on CNN’s State of the Union that the proposal being considered in Congress to tax employer provided health care benefits was not endorsed by her boss. Obama had opposed such a tax during his candidacy; his [...]
In an effort to fund their massive health care plan, members of Congress are scrambling to find revenue. After searching under their car seats and sofa cushions for extra change, they have basically admitted that the well is simply dry.
And that proposal to tax employer provided health care benefits? It’s just not [...]
Ever since President Obama raised the idea of taxing health care benefits, I’ve been asked what I think about the plan. Specifically, I’ve received a number of emails which more or less ask three questions:
How would it work?
Do I think it’s fair?
Do I like it?
I’m happy to oblige. But first, some history.
This idea [...]
Senator Max Baucus (D-MT) isn’t a fan of limiting the itemized deductions for higher wage earners. I’ve said before that I’m not a fan of the idea and I don’t think it will pass in Congress.
But Baucus has another idea. He’s asked Treasury Secretary Geithner whether the Obama administration would consider changing the [...]
Taxpayer asks:
My friend says that you can deduct contacts on your taxes as medical costs. I thought you could only deduct doctor’s visits. Can I really take those off of my taxes? What about glasses?
Taxgirl says:
If you itemize your deductions, you can absolutely include the cost of contacts and glasses as medical [...]
Hi Taxgirl…
Quick question…I live in CA
My current employer, as part of his benefit plan, pays for my medical insurance. If I want to get medical for the rest of my family, I have to pay extra.
According to someone who works here, they claim that is deductible as a medical expense under Schedule A…is [...]
