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  • Higher Medicare Tax Latest Proposal to Fund Health Care Takeover

    The latest proposal to pay for a government takeover of the health care system is to increase the Medicare tax for those that earn more than $250,000 a year. This latest proposed tax hike shows Congress is desperate to find more revenue to pay for its excessively expensive health care plan.

    The current Medicare tax is 2.9 percent. Workers and employers pay 1.45 percent each. It is unclear at this point whether both workers and employers would pay a higher rate, or just workers. Unlike the Social Security tax, the Medicare tax is not capped, so every dollar of wages earned by workers is subject to the tax.

    Taxpayers pay the Medicare tax during their working years and receive coverage for hospitalization during their retirement. It already takes in less revenue than necessary to pay for the hospitalization coverage of current retirees. Raising the tax and using the revenue to fund a new entitlement does nothing to fix this shortcoming.

    Using new revenue from the Medicare tax to fund health care reform would be as illogical as raising the federal gas tax, which sensibly funds highway construction and maintenance, to pay for a new welfare entitlement.

    At this point, the deeper economic damage imposed by this take hike is difficult to analyze because the proposal lacks specifics. But there is little doubt the tax hike would legally fall on those earning more than $250,000 a year so it remains in accordance with President Obama’s campaign pledge.

    Nevertheless, those earning much less than $250,000 a year will feel the negative impact of the tax. Higher taxes on high earners will cause them to take fewer risks and cut back on investment. This will lower wages and reduce the number of jobs created. And much of the tax increase is likely to fall on small businesses, which will cause them to create fewer jobs and pay lower wages. Workers earning much less than $250,000 a year will bear the full brunt of these jobs lost and lower wages.

    Slowing economic growth with higher taxes during this severe recession will only serve to prolong the suffering of those already hurt by the downturn. Congress should go back to the drawing board and come up with health reform that actually lowers costs instead of desperately seeking for new ways to raise taxes to fund an expensive government takeover of the health care sector.

    Posted in Economics [slideshow_deploy]

    8 Responses to Higher Medicare Tax Latest Proposal to Fund Health Care Takeover

    1. J.C. Hughes, Texas says:

      Congress and the Obama administration are wasting valuable time, energy and resources while getting in far over their socialist dreaming heads. My message to them is to STOP! Their actions are pure madness that have been insidiously destroying a nation. They're dragging the economy down while weakening national security. If this is their intended goal, then they've proved successful. Congress and the administration need to get back to strengthening America's foreign policy and the nation's defense posture. Return all entitlement and welfare matters over to the individual states where these belong. If they fail to move in this necessary and proper direction, American patriots will be standing by to help them.

    2. Steve Dill, Missoula says:

      Obama just doesn't get it. Unemployment is the most critical issue facing America. Yet, his ridiculous social programs will stifle job growth, and add to this problem. In my industry, medical sales, we have lost 30,000 high-paying jobs in medical sales, which will never return. The carnage continues under this inept regime. Learn more about the impact of health care reform on medical device sales jobs at http://www.gorillamedicalsales.com

    3. Bobbie Jay says:

      here's an idea, the American Constitution and the DECLARATION OF INDEPENDENCE. FREE MARKETS! It works like a charm…

    4. Bobbie Jay says:

      stop taxing basic human NECESSITIES!!!!!!!

    5. RJS, Greensboro, NC says:

      The constantly rising health care bill will have to be paid somehow. The label that we put on the bill itself–tax, premium, contribution–will not change the fact that it must be paid. No matter how much we argue policy, the need to pay for services remains. No matter how much we argue that paying this way or that hurts other businesses, the need for medical funding will not disappear. It is going to hurt, no matter how we decide to go about it. Something for nothing has caught up with us NOW, and it cannot continue.

    6. JohnR, Michigan says:

      The bill does a lot to improve coverage, but the claim that it's deficit neutral (or will reduce the deficit) is pure Smoke & Mirrors. I will support any legislation that bends the cost curve to the point we cut our expenditures by 2/3 (similar to per capita spending in europe). But…I know this is politically impossible, and the Dems know it too. Their GOAL is a massive expansion of govt power, and health care is merely a means to that end. And why? Because "big govt" benefits the Dems; it's good for the Party. Period.

    7. Pingback: Headlines Exposed 11.19.2009 — ExposeTheMedia.com

    8. Freedom of Speech, T says:

      TO ALL SENATORS,

      Please put the people of the United States before, only, your constituents when you vote on Saturday night. If you move this mess forward, you will ensure the American taxpayer gets raped because something unaffordable will come of this.

      You know the Senate version of the bill is deeply flawed. The actual long term cost estimates are disingenous. This is why the “Doc Fix” with its 200+ billion price tage was put under separate legislation. CBO estimates are ALWAYS way off. The actual startup costs is trillions and you know it. How can you even consider this in light of the stimulus debacle?

      The House Leader cut deals about abortion to entice members to help her barely pass that piece of junk. Now, we fear the Senate is about to play the same game. Senators stand strong and do not vote this bill out of clocture. There is no way you even KNOW what is in this bill so how can you move it forward? Do not be bribed or bought off with concessions in the form of the American taxpayers’ money! Your honor should count for something. America’s future should count for even more. No true American would disagree.

      The majority of the American people do not want this bill passed. That should say it all. This is your chance to represent us and not your personal desires. Let this ugly mess die.

      Start over on a bipartisian path that Pelosi should have done in the first place and set egos aside.

      You KNOW the real long-term cost of this bill cannot be sustained. You KNOW this. Doing nothing is sometimes better than doing the wrong thing. Start over! Reform health care for all; don’t destroy health care for the majority of the American people.

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