Three health care experts summarize the opposition to President Obama’s plan and the best alternative in today’s Wall Street Journal. They conclude:
Despite the claims of some partisans to the contrary, the president’s plan is failing because it does not speak to the concerns of the majority of Americans. Instead of addressing the high and rising costs of care, it proposes mandates, invasive regulation, and unaffordable new entitlements. This will not bring health-care costs down-it will only make this problem worse.
Even these conservative experts spend little time on taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es, and neither do opposing liberal commentators (who sound a little panicky about the rumored White House Plan B, an appealingly incremental bill that would replace the massive overhaul if it fails again). President Obama and even Republican leaders will probably spend little of their TV summit time talking about the complex new taxes that the Obama plan includes. Howard Gleckman has a good post in the Christian Science Monitor. In short, they are:
- Hiking the Medicare payroll taxA payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue. from 2.9% to 3.8% for single persons earning over $200,000 and couples earning over $250,000. For the first time, that taxed income won’t just include wages but also rents, annuities, royalties, capital gains, interest and dividends.
- Imposing a tax on Cadillac health care plans. If a policy worth more than $10,200 were sold to an individual, a 40% tax would be due on every dollar over that amount. The tax threshold for family policies would be $27,500. To help congressmen vote for this tax, the president proposes that it not take effect until 2018 and indexes it for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. plus one percent.
- a fee on branded prescription drug pharmaceutical companies in proportion to their federal sales
- an excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. on medical devices
- an annual fee on health insurance companies
- an excise tax on indoor tanning services.
- Individuals under Obama’s plan would be required to purchase coverage or face a fine of up to $695 or 2.5 percent of income starting in 2016, whichever is greater. Many would call this a fee instead of a tax.