Fix Health Care Policy

Reconciliation Bill Adds Even More Taxes

A jubilant President Obama put his signature on health care legislation yesterday, but the work isn’t done quite yet. The U.S. Senate must pass the Reconciliation Act of 2010, making a number of tax changes to current law.

By signing the legislation, Obama already broke his campaign promise not to raise “any form” of taxes on families making less than $250,000 per year. The reconciliation bill adds even more taxes for Americans — an estimated $52.3 billion over 10 years, according to a new analysis from Americans for Tax Reform.

ATR’s Ryan Ellis spoke at The Bloggers Briefing yesterday about the reconciliation measure: “We lost a major fight on Sunday. That fight is lost; President Obama has signed it into law. Rather than wallowing … and waiting until the election, we have a fight this week on the floor in the Senate. Do we want to have an additional tax increase on top of the tax increase that has just been signed into law?”

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Tags: Americans for Tax Reform, Cadillac tax, campaign promise, low-income families, more taxes, ObamaCare, Senate Health Bill

ObamaCare’s Biggest Losers

A recent study by the Urban Institute, a prominent liberal think tank, lists “the biggest losers” should congressional health care legislation fail to become law. Interestingly enough, this is oddly similar to an earlier Heritage Foundation assessment of the “biggest losers”—if the liberal bills do become law. Here, we outline how Urban’s biggest losers would actually be worse off under Obamacare than under the current system: (more…)

Tags: biggest losers, low-income families, self-employed, small business owners, taxes, Urban Institute

Capretta: ObamaCare Is a 70% Tax on Work

In  his latest posting on National Review Online’s Critical Condition, James Capretta, a fellow in Economics and Ethics Program at the Ethics and Public Policy Center, raises the issue that the bills in Congress lack any thorough analysis on the effect they would have on work incentives for low-income families.

Under Sen. Max Baucus’ bill, families at the federal poverty line would receive a $16,500 entitlement from the federal government to pay for their health coverage, Capretta writes. As families’ income increases, the entitlement shrinks and tax rates jump. Capretta notes this would come “on top of the high implicit taxes already built into current law.” That includes reduced Earned Income Tax Credit (EITC), which low-income families with children receive, in addition to the individual tax rate (15 percent) and payroll taxes (7.65 percent).

“The effective, implicit tax rate for workers between 100 and 200 percent of the federal poverty line would quickly approach 70 percent — not even counting food stamps and housing vouchers,” Capretta writes. He highlights a concern Heritage policy analysts share that the Obama administration’s health agenda will hurt low-income families and workers the most.

Tags: EITC, low-income families, ObamaCare, tax rates