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  • With Reid Bill, Obama Would Again Break "No Tax" Pledge

    With the event horizon of the vote on the Reid Health Care Bill approaching, it appears that passage of the legislation would, yet again, amount to President Barack Obama breaking his “no new middle class tax” pledge.

    As blogger Keith Hennessey reminds readers, then-candidate Obama pledged on September 12, 2008:

    I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.

    Hennessey notes that Obama first broke that pledge with his February signing of the Children’s Health Insurance Program Reauthorization Act of 2009, which hiked tobacco taxes by 156% – effectively a tax on middle class American consumers. And that broken promise occurred only 15 days into the Obama presidency.

    Now, as the Senate takes up the Reid Bill, there are a whole slew of new middle class taxes that also amount to breaches of the Obama “no new tax” pledge. Hennessey writes that there are six tax increases that qualify. Here is his analysis:

    1. The clearest violation is the 5% excise tax on cosmetic surgery and similar procedures (including teeth whitening). I assume that cosmetic surgery and similar procedures are skewed toward the high end of the income distribution, but there certainly are many people getting these treatments with annual family income less than $250,000.

    2. The bill would allow State insurance exchanges “to charge assessments or user fees to participating health insurers, or to otherwise generate funding, to support its operations.” [ §1311(d)(5)(A) ] Health insurers would pass these “assessments or user fees” through to consumers as higher premiums. This would affect anyone who buys health insurance, including those with family income less than $250,000.

    3. The bill would impose a 40% excise tax on health coverage in excess of $8,500 (individuals) / $23,000 (families). While policies this generous are almost certainly skewed higher on the income distribution, there are definitely families with income less than $250,000 receiving these plans. Again, health insurers would pass these tax increases through to those families.

    4. The bill would increase taxes on all health insurance plans, as well as on brand-name drugs and biologics, and on medical devices. These tax increases would affect anyone who buys these goods, even if their family income is less than $250,000.

    5. According to CBO, “By 2019, … the number of nonelderly people who are uninsured would be reduced by about 31 million, leaving about 24 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants.)” (p 8 ) These roughly 16 million people would pay “penalties” of $95 per adult in 2014, $350 per adult in 2015, and $750 per adult in 2016 and later. You’re charged half as much for each kid. Most of these 16 million people paying higher taxes will have family income less than $250,000 and will pay higher “penalties,” although not all will pay these full amounts.

    6. The bill would create a new 0.5 percentage point increase in payroll taxes on individuals with incomes greater than $200,000 in 2013 and families with incomes greater than $250,000 in 2013. Since these amounts are for 2013 and not indexed, someone making $233K in 2009 would be affected by this in 2013, assuming 1% annual real wage growth and CBO’s assumptions about inflation. If you’re making $220K this year, you’ll probably be hit by the new tax in 2016. $210K this year, you first get bit in 2017, and so on.

    For a more comprehensive look at the growing list of taxes already on the table in the health care reform legislation, take a look at The Heritage Foundation’s Senior Analyst in Tax Policy Curtis Dubay’s piece titled “Taxes Proposed to Pay for Health Care Reform.”

    As Dubay writes, all the taxes in the House bill, when combined with state and local income taxes, would raise the average top marginal rate in the U.S. to over 52 percent, “higher than traditionally high-tax countries such as Italy, Spain, and even France.”

    So much for Obama’s pledge.

    Posted in Obamacare, Ongoing Priorities [slideshow_deploy]

    18 Responses to With Reid Bill, Obama Would Again Break "No Tax" Pledge

    1. Bill Lee, ArkLaTex a says:

      As stated by some and its is a growing chorus: Obama is trying to tear down America and then rebuild it as a Socialist Nation.

      Next Nov 2010 Congressional elections is the "show down" to see if Americans will allow he to do his will in America.

    2. Jim, Indiana says:

      There's a tax on charitable hospitals (like Shriners' Hospitals for Children) as well. Won't matter after awhile anyway, since charitable donations to such hospitals will dry up once everybody has "free" healthcare.

    3. matthew queens, ny says:

      we knew all along that Obama would not keep his promise. I wonder how many Obama voters who thought he would are starting to see the errors of their vote

    4. Paul Rinderle says:

      EDITORIAL: Washington Times- "PelosiCare hikes capital gains taxes" –Sunday, November 15, 2009

      One of the many bombs buried in House Speaker Nancy Pelosi's more-than-2,000-page health care bill is a dramatic increase in capital gains taxes. On top of Mr. Obama's intention to increase capital gains taxes in 2011 from 15 percent to 20 percent, Mrs. Pelosi's bill will increase the maximum rate for the supposedly rich to 25.4 percent. Even Democrats have to recognize that this will discourage investment – the money that drives job creation

    5. Bobbie Jay says:

      Cosmetic surgery is only 5%? If it's cosmetic surgery by choice, like Nancy Pelosi's, it should be triple. People who can't afford it should accept what they are born with. If cosmetic surgery is necessary due to physical violation of permanent damage, it should be paid by the criminal (but tax exempt.) If by accident of some sort, tax exempt. But if people like Nancy PELOSI, can't accept what they were born with, they should have to pay quadruple.

    6. Bobbie Jay says:

      …or pay their own expense for mental help on coping with their nonacceptance of their personal appearance.

      (tax exempt cosmetic surgery also, if necessary due to illness.)

      This tax should be higher if procedure(s) for no reason but vanity. Nothing of a necessity to survive should be taxed.

    7. Janet, Texas says:

      Bobbie Jay,

      I am glad that you personally have never had to have plastic surgery. Unfortunately, I have had many due to extreme facial deformities at birth. I find it sad that you think I should seek mental health care for my 'condition'. Many of my surgeries have been by choice as you phrase it, and I am sure that the government would rule it as vanity.

      You strike me (hopefully I am wrong)as someone who may have told me over the years that I should stay home so they wouldn't have to look at me. I pity you.

      No, if God granted me a 'do over' tomorrow – I wouldn't change a thing about my face. It has forced me to see others a little more charitable and to realize that all the wonderful people in my life are truly rich in heart. I am married to an amazing man and have an amazing and beautiful child. God has blessed me more than I deserve.

      Another tax on anything, even so-called elective cosmetic surgeries, should be avoided.

    8. Bobbie Jay says:

      You are mistaken, Janet. I see beauty in the hearts of many. I see more the character, then the face of a person. But I failed to consider the possibilities of deformities at birth. This is rare. It takes strength to endure as beauty is in the eye of the beholder.

      The ugliness is in the people that choose to get cosmetic surgery for no other reason but vanity. Like (Nancy Pelosi,) And people in positions of fame, etc. Or mothers who let their daughters get breast implants, as mothers invoke nonacceptance of their daughter's natural being… I apologize to you.

    9. Dean-Texas/Alaska says:

      Obama never had any intention to keep ANY so called promise. Read Saul Alinski if you want to understand Obama, look at any dictator to understand Obama's direction for America.

    10. Lloyd Scallan - New says:

      Will someone please tell me what pledge has Obama kept? By this point in time, we should all realize

      that Obama will say or "pledge" anything, with absolutely no intention to keep those pledges.

      He is a Marxist that wants to drag this country into his vision of a socialist society. The sooner we all reconize who and what Obama is, the sooner we will get our country back.

    11. joan, connecticut says:

      God Bless Joe Wilson, and his truthful statement to President Obama "YOU LIE. He was berated for speaking the truth, in the wrong venue. Representative Wilson, was fed up with the lies being generated from every corner of the political body in Washington. Pelosi and Reid's gang were angry at being exposed, but the reality is, as Jack Nicholson said, in the movie, "A few Good Men" — "You can't handle the truth." Apparently, neither can our politicians!" Term Limits, are needed more then ever, in order to oust the representatives and Senators who will not represent the American citizen and the Constitution.

    12. Freedom of Speech, T says:

      The ironic thing is that the perpetrators of this economic and fiscal crime against the American Taxpayers will be long gone by the time the REAL IMPACT is realized.

      They will be multi-millionaires with nice fat pensions, and secure both in home and person.

      Many will undoubtedly become lobbyists and further fatten their personal fortunes. All of those government contacts DO come in handy, don’t they?

      The worst thing is that they will blame everyone but themselves for destroying the opportunity for millions.

    13. Diamond, ND says:

      We need to channel our energy by letting our Senators know how we feel. I called mine last week to let them know that I the tax payer, am upset with how they plan to spend my money. Didn't effect their vote on Saturday unfortunately, so they both need pink slips in 2010. They all need term limits, but that is another topic.

    14. Lynn B. DeSpain says:

      Why stop now? The man is on a roll!

    15. Ben C, Ann Arbor says:

      Great Saturday Night Live skit – view it on AOL welcome screen. The truth hurts, doesn't it President Obama?

    16. Jerry from Chicago says:

      It's ok, he never meant it in the first place.

      I wonder if he realizes how much like George Bush, Sr. he is? Remeber his admonition, "Read my lips, no new taxes"?

      Well, let's hope that the American public treats him the same way they treated old George when he did increase taxes.

    17. Victoriano, Los Ange says:

      I would like to share with you that, government run health care in Mexico is a big bureaucrat waste of money, to get a job at IMSS (Insitute of Mexican Social Security), you must be related somehow to an existing employee, qualifications alone will not guarantee a position there; also, if a person starts working there at age 21, he will retire at age 47 with a salary equal or higher than last pay period, plus all the fringe benefits, and of course, they are not required to get their health coverage from that institution, they have a separate health care provider, exclusive for government employees.

      Not to mention that, if you need to see a specialist, you have to wait weeks, because the "good" doctors have their own private practice, where their fees are not "mandated" by the government.

      Is this the path USA wants to go?

    18. Pingback: Get Equipped on What’s at Stake with ObamaCare | Conservative Principles Now

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