Friday, October 30, 2009

Nancy Pelosi's Bundle of Joy

I've been so involved in NY-23 over the past couple of weeks that I haven't paid a lot of attention to the Obamacare situation. That's the thing with this administration - if you blink, or look at some other critical issue, you get ambushed on your flank by some 1,990 Nancy Pelosi bill.

Not to worry, however. There are plenty of good folks slogging through this thing so you don't have to. Take a look first at Philip Klein's piece at American Spectator. Klein looks at the section regarding "Employer Responsibility" and comes to the conclusion that this bill is a huge job killer. Klein keeps his explanation pretty simple:

For full-time workers, business will have to contribute at least 72.5 percent toward individual health insurance policies, and 65 percent for family policies. For part-time workers, the required percentage would be based on a proportion of how many hours they worked relative to the hours worked by a full-time employee. The exact proportion would be determined, once again, by the Health Choices Commissioner, in conjunction with the Secretary of Labor, the Secretary of the Treasury, and the Secretary of Health and Human Services.

Any employer with a total annual payroll of over $500,000 that does not meet these requirements will be subject to a new tax, which reaches as high as 8 percent once payroll reaches over $750,000.

This is a killer for small business. And larger businesses will be inclined to lower their payroll in order to avoid penalties.

The Wall Street Journal also breaks the House bill down:

Creates government-run health-insurance plan that would negotiate rates with doctors and hospitals.

Employers must provide health-insurance coverage or pay fine of 8% of payroll (for those with payroll greater than $750,000).

Surtax of 5.4% on married couples earning more than $1 million a year or individuals making more than $500,000 a year.

Those who go without insurance would pay fine of up to 2.5% of adjusted gross income.

Of course, low income families will get subsidies to buy health care. The public option is still in there but now we learn that it won't provide lower cost coverage. And yes, it will still drive your regular provider out of business. In fact, as Jammie Wearing Fool reads it, no new private insurance companies will be allowed to form.

With regard to the cost issues, Hot Air has a post on all the new taxes that come with this bundle of joy:

  • Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
  • Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
  • Medicine Cabinet Tax (Page 324)
  • Cap on FSAs (Page 325)
  • Increased Additional Tax on Non-Qualified HSA Distributions (Page 326)
  • Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327)
  • Surtax on Individuals and Small Businesses (Page 336)
  • Excise Tax on Medical Devices (Page 339)
  • Corporate 1099-MISC Information Reporting (Page 344)
  • Delay in Worldwide Allocation of Interest (Page 345)
  • Limitation on Tax Treaty Benefits for Certain Payments (Page 346)
  • Codification of the “Economic Substance Doctrine” (Page 349)
  • Application of “More Likely Than Not” Rule (Page 357)
That Limitation on Tax Treaty item, above? Ed Morrissey explains that "it places a penalizing tax on American earnings for corporations with overseas profits. That should drive those corporations that can relocate to foreign shores, while making other American corporations less competitive."

And the final prize after all this? 18 million will still be uninsured. So, if this passes, what have we gained? Absolutely nothing but another huge bureaucracy, another entitlement program, higher unemployment, inevitable rationing leading to inferior care.

Back up and start over, folks. This just gets worse with each new incarnation.

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