FRONT PAGE CONTRIBUTOR
The Case of the Magically Doubling Health Care Surtax
Only in Democrat Country Does a Tax Hike Equal Taxes Going "Down, Down, Down"
Last night, during yet another attempt to mark up the House health overhaul bill, Rep. Henry Waxman’s (D-CA) House Energy and Commerce Committee took up and voted down (33-25) an amendment by ranking member Rep. Joe Barton (R-TX) to prevent the implementation of a little-known provision in the bill that would cause the highly-publicized surtax on high earners to double if the cost of the health overhaul is higher than expected.
The “surtax” (read: tax increase) “doubles in the year 2013 if there is a study by the Office of Management and Budget that determines certain savings have not occurred,” said Barton. “The effect of the Barton amendment would be that beginning 2013, only those citizens who make over $1 million would have their taxes increased by the surtax.”
The bill currently increases the taxes of those making $280,000 ($350,000 for couples) by 1 percentage point, those making $400,000 ($500,000 for couples) by 2 percentage points, and those making more than $800,000 ($1 million for couples) by three. The provision Barton’s amendment was designed to forestall was an automatic increase of these rates by two percentage points across the board if CBO determines in 2013 that the overhaul is costing more than lawmakers currently expect it to — something that is a near-absolute certainty.
Rep. Greg Walden (R-OR) pointed out that the 2013 increase in the surtax would make his state’s tax rate “the second highest income tax rate in the world.”
“It’s one of the reasons I think that Oregon is second only to Michigan in unemployment,” Walden said.
Rep. Frank Pallone (D-NJ), chairman of E&C’s health subcommittee, argued that the automatic 2013 surtax increase was immaterial because there would be no funding shortfalls due to offsetting “cuts in existing programs, Medicare in particular.” This, of course, begs the question why eliminating a portion of the automatic tax increase — if it is as unneeded as they claim — remains off-limits to Democrats by their own choice.
Further, some Democrats denied that this income tax hike would cause more taxes to be paid — at least by those Americans who weren’t “rich” enough to be fair game for soaking. “American citizens’ taxes are going to come down as a result of this bill,” said Rep. Anthony Weiner (D-NY). “Overall, tax expenditures are going to go down, down, down, and so are non-tax expenditures.”
Such a claim is ludicrous, of course; unless health care is going to become an entirely free enterprise (something that would cause a mass exodus of providers from the U.S.), somebody‘s expenditures are going to go “up, up, up” as a result of this massive exercise in cost-shifting. Further, even if Americans are no longer writing checks to private insurance companies or directly to providers in exchange for coverage and care, they are still paying for health care through another middle-man: the federal government.
Rep. Cliff Stearns (R-FL) called Weiner out on his claim, saying, “Mr. Weiner says we’re going to lower health care costs with his bill. Now, a study by the Joint Economic Committee…shows, in fact, that under this health care bill, health care costs are going up almost exponentially.”
“You’re welcome to get a copy [of the JEC study], Mr. Weiner,” he said.
Of course, neither Weiner nor any other Democrat on E&C will be accepting and reading a copy of that analysis. Heck, according to Rep. John Conyers (D-MI), it’s not even in their job description to read the bill (or to have their lawyers do it for them); it’s just their job to vote to pass it.