Free Republic

In the storm of the daily news flow: unemployment; terrorists on planes, terrorists being tried in our courts, terrorists shooting our soldiers on a U.S. base; the president vacationing in Hawaii in the midst of the Pantie Bomber crisis, playing golf and basketball, cool as a cucumber; corruption in his Cabinet, Timothy Geitner the tax cheat again; a failed $800 billion plus stimulus; the secretive, partisan, unconstitutional health care bill being finalized behind closed doors between Nancy Pelosi, Harry Reid and the President despite his repeated assurance of transparency; it is easy to miss the real storm brewing: the overwhelming...

President Obama is making final decisions on his budget for next year and is still promising to outline a path to substantially lower federal deficits. But on nearly every front, that goal has gotten harder since his first budget a year ago. ... Meanwhile, the biggest tool usually employed to chisel away at projected deficits — shaving Medicare payments to health care providers — is already being used to offset the costs of overhauling the health care system. At the same time, the persistently high unemployment rate has intensified the pressure on the White House and Congress to not emphasize...

When it comes to paying for the cost of the proposed health care reform plan, voters are okay with taxing the rich but strongly reject cuts in Medicare and excise taxes on “Cadillac” health plans provided by employers. The latest Rasmussen Reports national telephone survey finds that those who support the health care plan overall are strongly supportive of all three approaches to paying for the program. Most of those who are opposed to the plan are also opposed to each proposed means of paying for it. Sixty-four percent (64%) of all voters favor imposing an income tax surcharge on...

During last summer's fiscal crisis, Gov. Arnold Schwarzenegger borrowed the title of a film classic to describe California's budget, saying it contained "the good, the bad and the ugly." He was referring to welfare reforms and the streamlining of state boards that he was able to broker, along with deep spending cuts for schools, health care programs for the poor and AIDS-prevention efforts. All that's left in 2010 is the ugly. The nation's most populous state faces a nearly $21 billion shortfall over the next 18 months, a deficit that comes after years of making deep cuts in core state...

On November 7, 2009, the House passed H.R. 3962, the Affordable Health Care for America Act. The bill would expand Medicaid, grant subsidies to moderate-income households buying health insurance on newly established exchanges, and provide health insurance tax credits to some small businesses. These expenditures would be financed, in part, by a new 5.4 percent surtax on households with very high incomes, including married couples with incomes above $1 million. The proposed millionaire surtax is politically attractive because its direct burden would fall on a very small group, roughly 0.3 percent of the population. Moreover, this group is extremely wealthy...

State Changes to Individual Income TaxesIncreasesCalifornia in May added 0.25% to each income tax bracket, retroactive to January 1, 2009 and expiring December 31, 2010. Connecticut in September added a new top bracket of 6.5% on income over $500,000, retroactive to January 1, 2009. Delaware in June added a new top rate of 6.95% on income over $60,000 retroactive to January 1, 2009. Hawaii in May added three new brackets retroactive to January 1, 2009: 9% on income over $150,000; 10% on income over $175,000; and 11% on income over $200,000. New Jersey in June added three new brackets retroactive...

Doctors were able to surgically remove the so-called Botax from the Senate's health-care overhaul bill and replace it with a 10% tax on tanning services. "We suggested that the tanning tax would be a better alternative to the cosmetic tax and hopefully will reduce the incidence of skin cancer down the road," said David M. Pariser, president of the American Academy of Dermatology Association, which represents dermatologists. The American Medical Association had also opposed the proposed 5% tax on cosmetic procedures -- dubbed the Botax after the antiwrinkle product Botox -- which was among the issues it wanted changed by...

Runaway federal deficits have thrust a politically unsavory savior into the spotlight: a nationwide tax on goods and services. Members of Congress, like their constituents, are squeamish about such ideas, instead suggesting spending cuts or higher taxes on the rich. But with a lack of political will to do the former, and a practical ceiling to how much revenue can be milked from the latter, economists across the political spectrum say a consumption tax may be inevitable once the economy fully recovers. “We have to start paying our bills eventually,” said Charles E. McLure, a tax economist who worked in...

Reform: Only a Bernie Madoff could believe the Senate's health care bill will extend coverage to 31 million Americans while cutting deficits by $127 billion over 10 years. It would be the first profitable entitlement. But that's what Majority Leader Harry Reid, citing Congressional Budget Office estimates, tells us the 2,074-page bill — said to cost only $849 billion over a decade — would do. Like House Speaker Nancy Pelosi, he seems to be following Vice President Joe Biden's admonition at an AARP town hall meeting that "we've got to spend money to keep from going bankrupt." We suspect Reid's...

Senator Harry Reid’s health care bill included an array of new provisions that are being scrutinized on Wednesday night, but one particular tax proposal in particular already has attracted a buzz — a 5 percent levy on elective cosmetic procedures that was quickly dubbed the “botax.” Hold the guffaws. For all the instant punchlines about taxing nose jobs, breast enlargements and facelifts — cynics righteously demanded to know if members of Congress had written in an exemption for themselves (they did not) — the proposed tax is both serious and controversial policy. It would raise an estimated $5 billion over...

Did I just see a trail balloon launched? Over at a Wall Street Journal conference, Christina Romer, chairman of President Obama’s Council of Economic Advisers had this to say about deficit reduction: But the chairman of the president’s Council of Economic Advisers admitted that health reform and a growing economy isn’t enough to bring down the deficit. She did mention one other place that revenue could come from: letting the Bush tax cuts expire. Me: Since Obama already wants to get rid of the income and capital gains tax cuts for wealthier Americans that expire at the end of 2010,...

Buried in this Friday story on Obama's future plans is a curious statement, attributed to White House Budget Director Peter Orszag, which didn't get nearly enough attention: Orszag has said the spending blueprint, for the budget year that begins Oct. 1, 2010, would put the nation "back on a fiscally sustainable path" and suggested it would include a mix of spending cuts and new revenue-producing measures. "New revenue-producing measures." In other words, more tax increases -- increases beyond the dozen or so that are already planned in the health care reform package. President Obama's advisors understand that they have to...

... Buried in Nancy Pelosi's health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren't real. In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not...

Federal income tax rates would have to be nearly tripled across the income spectrum if Congress were to close the deficit in fiscal year 2010, according to a new report from the nonpartisan Tax Foundation. Instead of taxing joint filers with rates ranging from 10 percent to 35 percent, tax rates would have to start at 27.2 percent and reach up to 95.2 percent. "Federal government spending levels are so high that even if policymakers were willing to stop debt-financing government services, the federal tax system in its current form wouldn't be able to raise that much," said Tax Foundation...

From Section 6002 on page 1435: INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON W–2The definition of taxable income is revised to include "the aggregate cost of applicable employer-sponsored coverage". . . "The amendments made by this section shall apply to taxable years beginning after December 31, 2009."

Taxing financial transactions on Wall Street is gathering support in high places. With federal budget deficits soaring, policy makers and other advocates are eyeing the huge sums that could be raised as a way to cover the costs of new initiatives. Labor unions, in particular the AFL-CIO, have proposed a financial-transactions tax as a way to defray costs of a health-care overhaul. Lawmakers have discussed a similar fee as a way to cover the cost of future financial oversight. Liberal advocates are pushing the tax to pay for new stimulus spending. This week, the left-leaning Economic Policy Institute floated the...

A liberal think tank with close ties to President Barack Obama says the administration and Congress should consider raising taxes on Americans to help close federal budget deficits, an opening salvo in what is likely to be a protracted debate on tax policy. In a draft report, the Center for American Progress says the size of projected budget gaps requires considering options including tax increases as well as curbs on annual spending and entitlement programs supported by Democrats. Such ideas could pose problems for Mr. Obama, who pledged during the campaign to not increase taxes on families making less than...

Who would have thought that so many people would go to the mat over the lowly flexible spending account? Flexible spending accounts allow people to take money out of their paychecks before paying taxes on it and to set it aside to use for health care expenses that insurance doesn’t cover. There is no legal limit on how much you can set aside each year, though employers generally set a cap around $4,000 or $5,000. Senator Max Baucus, Democrat of Montana and author of the Senate health care bill, would like to place a much lower $2,500 annual limit on...

House Democrats are considering an insurance tax to help pay for their health care overhaul plan, even though such a funding scheme is bitterly opposed by labor unions that are among the party's most loyal constituencies. House Speaker Nancy Pelosi, D-Calif., said Friday a tax on high-cost health insurance plans is "under consideration" as Democrats search for consensus within their ranks before taking a bill to the House floor later this fall. "We just have to see how much money we need for what," Pelosi said. "And if we're taking the bill down in cost, there are other provisions in...

Memo to President Barack Obama: It's a tax. Obama insisted this weekend on national television that requiring people to carry health insurance — and fining them if they don't — isn't the same thing as a tax increase. But the language of Democratic bills to revamp the nation's health care system doesn't quibble. Both the House bill and the Senate Finance Committee proposal clearly state that the fines would be a tax. And the reason the fines are in the legislation is to enforce the coverage requirement. "If you put something in the Internal Revenue Code, and you tell the...