While the CBO was busily figuring out the cost of the Pelosi version of Obamacare the democrats were busily adding to the bill. Sources are reporting that the cost of the bill has gone up by approximately $200 billion dollars. The new provisions were meant to hold down insurance costs and to make it easier for the public to access the new programs. Think about this for a second, if the government was able to increase the cost of Obamacare before it even comes to a vote, just imagine what they will do to it once it is passed.
While the Congressional Budget Office has put the cost of expanding coverage in the legislation at roughly $1 trillion, Democrats added billions more on higher spending for public health, a reinsurance program to hold down retiree health costs, payments for preventive services and more.
Many of the additions are designed to improve benefits or ease access to coverage in government programs. The officials who provided overall cost estimates did so on condition of anonymity, saying they were not authorized to discuss them.
House Speaker Nancy Pelosi has referred repeatedly to the bill’s net cost of $894 billion over a decade for coverage.
Asked about the higher estimate, Pelosi spokesman Brendan Daly said the measure not only insures 36 million more Americans, it provides critical health insurance reform in a way that is fiscally sound.
“It will not add one dime to the deficit. In fact, the CBO said last week that it will reduce the deficit both in the first 10 years and in the second 10 years,” Daly said.
Republicans put the cost of the bill at nearly $1.3 trillion.
“Our goal is to make it as difficult as possible for” Democrats to pass it, House Republican leader John Boehner, R-Ohio, said at a news conference. “We believe it is the wrong prescription.”
One day after announcing Republicans would have an alternative measure, Boehner offered few details. He said it would omit one of the central provisions in Democratic bills — a ban on the insurance industry’s practice of denying coverage on the basis of pre-existing medical conditions. Instead, he said the Republicans would encourage creation of insurance pools for high-risk individuals and take other steps to ease their access to coverage.
Rep. Mike Pence, R-Ind., the third-ranking leader, said that Democrats looked at their bill as a way to advance universal coverage. In contrast, he said, Republicans “believe the real issue back home is cost” of insurance, and said their alternative would be designed to tackle it.
In House bill, tax hits rich
The typical family would be spared higher taxes from the House Democratic plan to overhaul health care, and their low-income neighbors could come out ahead.
Their wealthy counterparts, however, face big tax increases that could eventually hit future generations of taxpayers who are less wealthy.
The bill is funded largely from a 5.4% tax on individuals making more than $500,000 a year and couples making more than $1 million, starting in 2011. The tax increase would hit only 0.3% of tax filers, raising $460.5 billion over the next 10 years, according to congressional estimates.
But unlike other income tax rates, the new tax would not be indexed for inflation. As incomes rise over time because of inflation, more families — and more small business owners — would be hit by the tax.
“Twenty years from now, we’re going to see more and more small businesses ensnared into paying higher taxes,” said Rep. Dave Camp of Michigan, the top Republican on the tax-writing House Ways and Means Committee.
The tax would hit only 1.2% of taxpayers who claim business income on their returns, according to the estimates by the nonpartisan Joint Committee on Taxation. But that percentage would grow as business owners’ nominal incomes rise with inflation.
In 2011, a family of four with an income of $800,000 a year would get a $24,000 tax increase, when the new tax is combined with an increase in the top two tax brackets proposed by President Obama and other scheduled tax changes, according to an analysis by Deloitte Tax. That’s a 12.5% increase in federal income taxes.
A family of four making $5 million a year would see a $434,500 tax increase, about a 32% increase, according to the analysis.
“These are very big numbers and very high effective tax rates,” said Clint Stretch, a tax policy expert at Deloitte Tax.
The new health care tax would come on top of other tax increases for the wealthy proposed by Obama. The top marginal income tax rate now is 35%, on income above $372,950. Obama wants to boost the top rate to 39.6% in 2011 by allowing some of the tax cuts enacted under former President George W. Bush
House Democrats said they are proud that they found a way to finance the health care package largely from a tax on the wealthy. There is, however, little appetite for a millionaire’s tax in the Senate, where some hope to eventually use tax increases on the wealthy to help close the growing federal budget deficit. Also, some tax experts think it is a mistake to tap only rich people to pay for services used by all.
“If health care is a benefit that is worth having, then it’s worth paying for,” said William Gale, who was an adviser to President George H. W. Bush‘s Council of Economic Advisers and is now co-director of the Tax Policy Center. “This gives the impression that it’s only worth having if someone else pays for it.”
Obama promised during the presidential campaign that he would not increase taxes on couples making less than $250,000. However, the health care bill would impose new taxes on people who don’t buy qualified health insurance, including those making less than $250,000 a year.
Under the bill, individuals are required to obtain health insurance coverage or pay penalties, which are described as taxes in the legislation. The penalty would be equal to the cost of an average insurance plan or a 2.5% tax on incomes above the standard threshold for filing a tax return, whichever is less. There would be waivers for financial hardships.
To help afford insurance, families with incomes up to four times the federal poverty level would qualify for subsidies. The poverty level for a family of four is $22,050 this year.
Republicans argue that the penalties violate Obama’s tax pledge, and they liken the millionaire’s tax to the Alternative Minimum Tax, which Congress enacted in 1969 to ensure that wealthy Americans cannot use loopholes to avoid paying any income taxes.
The AMT was never indexed for inflation, so Congress must enact a fix each year to spare about 25 million middle-income families from being hit with big tax increases.
“They’re going down the same road by not indexing this tax,” said the Republican lawmaker Camp. to expire.
Obamacare is more about income redistribution that health care. What happens when wealthy people leave the country to find a tax haven elsewhere? The burden on the middle class will become even more severe, until this country is left with a weak,drive-less, mediocre middle-class trying to support a bankrupt nation. That is the legacy of Obamacare.