The Washington Post reports as Senator Harry Reid (D-NV) presented the Senate health-care plan which the Congressional Budget Office said would cut federal deficits:
Democratic leaders were jubilant that the nonpartisan Congressional Budget Office determined that the Senate bill would cut federal deficits by $130 billion over the next decade. That projection, released shortly before midnight Wednesday, represents the biggest cost savings of any legislation to come before the House or Senate this year, but the measure’s effective date also was pushed back by one year, to 2014. Democrats said the savings could prove more significant in the long run, though the CBO said they "would probably be small," amounting to around 0.25 percent of the overall economy, or no more than $650 billion between 2019 and 2029.
How is this possible? Tax increases, some of which would begin in 2010, but the legislation effective date won’t start until 2014. I thought we were in a hurry? If health-care reform is so important why have the 31 million people who are uninsured that Senator Reid said would be covered under this plan wait?
Because they couldn’t afford it otherwise.
Economist Keith Hennessey lists the major tax increases we’ll see as a result of the Senate plan:
- 40% excise tax on health coverage in excess of $8,500 (individuals) / $23,000 (families). Amounts are indexed for inflation by CPI-U + 1% – begins in 2013 – $149 B tax increase
- Additional 0.5% Medicare (Hospital Insurance) tax on wages in excess of $200,000 ($250,000 for joint filers) – begins in 2013 – $54 B tax increase
- Impose annual fee on manufacturers and importers of branded drugs – begins in 2010 – $22 B tax increase
- Impose annual fee on manufacturers and importers of certain medical devices – begins in 2010 – $19 B tax increase
- Impose annual fee on manufacturers and importers of certain medical devices – begins in 2010 – $60 B tax increase
- Cut in half (to $500K) the amount of an executive’s compensation that a health plan can deduct from its corporate income taxes – begins in 2013 – $600 million tax increase
- Impose 5% excise tax on cosmetic surgery and similar procedures – begins for surgery in 2010 – $6 B tax increase!
In total the bill would raise taxes by $370 B over ten years.
So basically if you have an awesome health insurance plan you are going to get hosed (wonder how unions feel about this). If you make more than $200,000 as an individual you are going to get hosed. If you purchase certain drugs or medical devices you are going to get hosed, do you really think manufacturers aren’t going to pass that on to you? Also, I wonder how the Hollywood type will feel about having to pay 5% more for plastic surgery? Perhaps they won’t be too thrilled about this bill.
Raise taxes on the middle class? Yes we can!