Unemployment has reached 10.2%, more than 2% higher than the administration promised we would see if the Stimulus bill were passed. The Stimulus bill has been a dismal failure and the government agency monitoring the funds that were spent has been accused of misreporting job data in an attempt to allow the President to save face as the economy continues to stall. But 10.2% doesn’t tell the whole story. When adjusted to add those that have exhausted their benefits or have taken part time work or minimum wage jobs outside of their regular industry to stave off financial ruin, the unemployment figure is a frightening 17.5%.
Job creation is something that government cannot do. Only thriving industries and businesses create jobs; particularly, the jobs worth having. The best thing government can do to help a stagnant economy is to place more money in the hands of consumers and to create an environment that business can grow in. Only tax relief and the elimination of meaningless over-regulation can provide real economic stimulus. Unfortunately, the President and the radicals he has surrounded himself with do not believe in free market solutions because they do not believe in the free market. A healthy and successful free market diminishes the importance of government so neo-socialist bureaucrats will always take actions that bridle the free market if for no other reason than to preserve their own power.
The last thing any government with a basic understanding of economic principals would do in a recession is add more taxes and more regulations to a faltering economy. Yet, that is exactly what they plan to do and more. If the House healthcare bill becomes law, small businesses and the wealthiest, most productive Americans can expect to pay massive new taxes. The bill also includes hidden fees and “excise” taxes that will fall heavily on the elderly.
Under the bill that passed Saturday night, citizens reporting income over $500,000 and married couples earning more than $1 million would be slapped with a 5.4% surtax on all income above those thresholds. After taking into account the expiration of the Bush tax cuts, those people would face a marginal tax rate of 45%.
Despite the President’s promise that small business will not suffer, very small companies, companies with payrolls with less than $500,000, will be exempted. All other companies will be slammed with new taxes adding up to 8% of their payroll if they don’t offer insurance as dictated by the Pelosi bill. The Joint Committee on taxation says that the surtaxes will raise $460.5 billion over 10 years, with almost a third of that amount coming from small business.
The Washington-based Americans for Tax Reform outlines other taxes the will result if the Pelosi bill is passed:
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): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)
It is clear there are far more pages in this bill devoted to taxes than are devoted to healthcare. If this bill is passed into law the taxes take effect immediately but the majority of the legislation actually dealing with healthcare does not go into force until 2013 and beyond. These taxes will further cripple the economy and independent estimates place the cost of this bill beyond mere dollars and cents as an additional 5 million jobs will be lost as a direct result of its passage.
The next assault on America is the Cap and Trade or “Climate Bill”. The taxes imposed on energy and business will spell the death of the American economy and the loss of personal property rights. Thanks to the banking crisis, the Federal Government already owns 40% of home mortgages in this nation. During the dark days between World War I and World War II, the Weimar Republic of Germany was faced with a collapsed economy and an explosion of their national debt. They monetized their debt by printing enough cash to cover it which caused a 10,000% rise in inflation as the gold reserves were no longer sufficient to cover the currency. The Republic created a new form of money backed by the only thing they had left….land.
Is this where we are heading? Will the Federal Government attempt to print us out of debt and as the economy crashes and more mortgages become the property of the United States; will we find ourselves in the service of the government or lose our homes? The government has already proposed the forgiveness of student loans for a ten year commitment to public service. The last time something like that was the routine order of business it was the dark ages and the “public servants” were called serfs.
Paul
Job creation is something that government cannot do. Only thriving industries and businesses create jobs; particularly, the jobs worth having. The best thing government can do to help a stagnant economy is to place more money in the hands of consumers and to create an environment that business can grow in. Only tax relief and the elimination of meaningless over-regulation can provide real economic stimulus. Unfortunately, the President and the radicals he has surrounded himself with do not believe in free market solutions because they do not believe in the free market. A healthy and successful free market diminishes the importance of government so neo-socialist bureaucrats will always take actions that bridle the free market if for no other reason than to preserve their own power.
The last thing any government with a basic understanding of economic principals would do in a recession is add more taxes and more regulations to a faltering economy. Yet, that is exactly what they plan to do and more. If the House healthcare bill becomes law, small businesses and the wealthiest, most productive Americans can expect to pay massive new taxes. The bill also includes hidden fees and “excise” taxes that will fall heavily on the elderly.
Under the bill that passed Saturday night, citizens reporting income over $500,000 and married couples earning more than $1 million would be slapped with a 5.4% surtax on all income above those thresholds. After taking into account the expiration of the Bush tax cuts, those people would face a marginal tax rate of 45%.
Despite the President’s promise that small business will not suffer, very small companies, companies with payrolls with less than $500,000, will be exempted. All other companies will be slammed with new taxes adding up to 8% of their payroll if they don’t offer insurance as dictated by the Pelosi bill. The Joint Committee on taxation says that the surtaxes will raise $460.5 billion over 10 years, with almost a third of that amount coming from small business.
The Washington-based Americans for Tax Reform outlines other taxes the will result if the Pelosi bill is passed:
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): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)
It is clear there are far more pages in this bill devoted to taxes than are devoted to healthcare. If this bill is passed into law the taxes take effect immediately but the majority of the legislation actually dealing with healthcare does not go into force until 2013 and beyond. These taxes will further cripple the economy and independent estimates place the cost of this bill beyond mere dollars and cents as an additional 5 million jobs will be lost as a direct result of its passage.
The next assault on America is the Cap and Trade or “Climate Bill”. The taxes imposed on energy and business will spell the death of the American economy and the loss of personal property rights. Thanks to the banking crisis, the Federal Government already owns 40% of home mortgages in this nation. During the dark days between World War I and World War II, the Weimar Republic of Germany was faced with a collapsed economy and an explosion of their national debt. They monetized their debt by printing enough cash to cover it which caused a 10,000% rise in inflation as the gold reserves were no longer sufficient to cover the currency. The Republic created a new form of money backed by the only thing they had left….land.
Is this where we are heading? Will the Federal Government attempt to print us out of debt and as the economy crashes and more mortgages become the property of the United States; will we find ourselves in the service of the government or lose our homes? The government has already proposed the forgiveness of student loans for a ten year commitment to public service. The last time something like that was the routine order of business it was the dark ages and the “public servants” were called serfs.
Paul
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