Transparency and Taxes in the New Healthcare Bill

**Nietzsche** · December 30, 2009, 10:54 PM

For your viewership:

Spoiler Alert, click show to read:

I don't like YouTube, but this Senator ought to be more concerned about doing his job.

For your review:

Healthcare and Taxes

Interesting breakdown of some of the taxes hiding in the bill.

Apologies if any of this has been previously reported.

**BNS** · December 31, 2009, 01:37 AM

Not bad.

A 40% tax increase on "Cadillac" plans to insure people have the access they deserve to quality health care. A tax on drugs and medical devices to insure health care costs are controlled. A tax hike on withdrawal from health savings account to get people really motivated about putting in funds. All sorts of taxes on those greedy undeserving employers and employees. An option to for big nasty employers (50+) forgo paying employee coverage and pay a tax instead, so that companies don't have to spend as much on low wage laborers. Lets just hope employers don't develop sly accounting maneuvers or other such detrimental acts. Notice the income tax for the self employed is larger, we don't like "big" employers, but god forbid we let individuals succeeding on their own go unpunished.Finally notice the tax on cosmetic surgery is repealed for one on tanning, we don't want to offend our buddy Pelosi.

**Nietzsche** · December 31, 2009, 10:37 AM

Originally Posted by BNS

Not bad.

A 40% tax increase on "Cadillac" plans to insure people have the access they deserve to quality health care. A tax on drugs and medical devices to insure health care costs are controlled. A tax hike on withdrawal from health savings account to get people really motivated about putting in funds. All sorts of taxes on those greedy undeserving employers and employees. An option to for big nasty employers (50+) forgo paying employee coverage and pay a tax instead, so that companies don't have to spend as much on low wage laborers. Lets just hope employers don't develop sly accounting maneuvers or other such detrimental acts. Notice the income tax for the self employed is larger, we don't like "big" employers, but god forbid we let individuals succeeding on their own go unpunished.Finally notice the tax on cosmetic surgery is repealed for one on tanning, we don't want to offend our buddy Pelosi.

Yeah, being that I don't have a "Cadillac" plan and I don't have my own business/employees, I wasn't sure what to make of some of it. Perhaps those that own their own businesses can shed some light on the current vs future costs/plan?

I was thinking as I reviewed it about "sly accounting maneuvers." Seems some of the taxes are tied to "full time employment." A way to avoid that would be to have more part time workers and less full time?

**BNS** · December 31, 2009, 12:42 PM

Originally Posted by Nietzsche

Yeah, being that I don't have a "Cadillac" plan and I don't have my own business/employees, I wasn't sure what to make of some of it. Perhaps those that own their own businesses can shed some light on the current vs future costs/plan?

40% sure is a big margin of people who now won't be able to afford those plans. It would be nice to hear of the new imposed burdens from business people, but I doubt we have many here.

Originally Posted by Nietzsche

I was thinking as I reviewed it about "sly accounting maneuvers." Seems some of the taxes are tied to "full time employment." A way to avoid that would be to have more part time workers and less full time?

Yup. Companies will probably want to hold off from employing over 49 full time employees until a severe slack in productivity justifies it or devise ways to cut up the business. Also in certain cases it may be cheaper and preferable for the employer to pay the $750 tax rather than insure the employee. I'm thinking in the case of low skill/low wage labor. Remember employer based insurance came in as a supplement to cash wages in order to pay more to the employee during the price controls imposed during the 40's and then it just stayed for various reasons. If coverage costs more than the tax it doesn't make sense to pay for it for a low wage worker.

**Nietzsche** · December 31, 2009, 01:38 PM

Originally Posted by BNS

40% sure is a big margin of people who now won't be able to afford those plans. It would be nice to hear of the new imposed burdens from business people, but I doubt we have many here.

As do I. I wonder if they "projected" this 40% as being constant across the years of this bill. Because I think you are right, people will probably lose their plans, which means, less revenue, which means, more debt, which means cost overruns, which means reduced services across the board... doesn't bode well.

Originally Posted by BNS

Yup. Companies will probably want to hold off from employing over 49 full time employees until a severe slack in productivity justifies it or devise ways to cut up the business. Also in certain cases it may be cheaper and preferable for the employer to pay the $750 tax rather than insure the employee. I'm thinking in the case of low skill/low wage labor. Remember employer based insurance came in as a supplement to cash wages in order to pay more to the employee during the price controls imposed during the 40's and then it just stayed for various reasons. If coverage costs more than the tax it doesn't make sense to pay for it for a low wage worker.

The problem with regulation is always it's lack of understanding of market ingenuity. Here we have an example of the invisible hand at work. I'm very concerned for the future of this plan and it's viability in terms of cost to all consumers.

**BNS** · December 31, 2009, 04:56 PM

Originally Posted by Nietzsche

As do I. I wonder if they "projected" this 40% as being constant across the years of this bill. Because I think you are right, people will probably lose their plans, which means, less revenue, which means, more debt, which means cost overruns, which means reduced services across the board... doesn't bode well.

All for some vague notion of class warfare which was incited by government regulations in the first place. I feel that over time as more and more of the bill is implemented people will come to realize that there is stark difference between what was promised and what will be delivered.

The problem with regulation is always it's lack of understanding of market ingenuity. Here we have an example of the invisible hand at work. I'm very concerned for the future of this plan and it's viability in terms of cost to all consumers.

Exactly.

**CtrlAltDe1337** · December 31, 2009, 06:30 PM

BTW, the "Cadillac plan" tax will not be adjusted for inflation, so more and more people will end up under this designation as our money inflates over time, which means a lot more people paying taxes on their healthcare plans. So much for lower premiums, eh?

**Admiral Piett** · January 01, 2010, 08:39 AM

Indeed. Just having a

ing socialized system would even be cheaper that having this stupid mess that the Dems have created out of this whole affair.

**Count of Montesano** · January 01, 2010, 10:49 AM

Indeed. Just having a ing socialized system would even be cheaper that having this stupid mess that the Dems have created out of this whole affair.

Probably true, but the insurance industry was never going to let that happen. I came on these boards several months ago and predicted that any healthcare bill would be a watered-down compromise that in the end benefited the medical industry at the expense of consumers and small businesses.

**Sphere** · January 01, 2010, 03:40 PM

BTW, the "Cadillac plan" tax will not be adjusted for inflation, so more and more people will end up under this designation as our money inflates over time, which means a lot more people paying taxes on their healthcare plans. So much for lower premiums, eh?

The smartest thing to do that would easily fund the entire program would be to tax all health insurance compensation, which as of right now is tax exempt. This has created a perverse incentive for employers to offer more health coverage instead of regular wages, thats why "Cadillac" plans have grown more prevalent; its cheaper than giving someone a raise. In effect it sucks more money into a bloated health insurance industry, and has contributed to the medical culture of over treatment.

It makes more sense to have all compensation evenly taxed (on a progressive scale of course), so that there is an accurate consumer demand in the health insurance market. Hell, with the increasing chunk that health insurance represents in typical compensation, you might even be able to lower the base tax rates.

In any event, this program represents less than 3% of the federal budget, even if you exclude all the funds coming from reductions in Medicare reimbursement (which is about 50% of the cost). I think making sure ~95% of Americans have health insurance for an ~1.5% increase in overall federal spending is a good deal, but thats just me.

(edit: After getting into the nitty gritty of it, increased taxes and fees account for about $200 Billion of the $848 Billion of revenuse in the bill. Thats 50 Billion a year or +1.6% of Federal spending which is about the 1.5% I came up with. Thats assuming the budget stays constant at the $3.1 Trillion it was in 2009 which is conservative. Also the CBO estimates 15% of the 848 Billion will actually go to deficit reduction)

**Hotspur** · January 01, 2010, 05:51 PM

I wonder how much more medical care one gets for $21,000 a year. I've got a $500 deductible and a 35 dollar co-pay for a family of five and I pay less than a quarter of that.