Senator Cornyn
Higher Taxes, New Federal Mandates
Medicare Payroll Tax increase of 0.9 percent (on top of the current 2.9 percent) on income over $200,000 for individuals ($250,000 for joint filers), which would not be indexed for inflation so more small businesses would pay this new tax each year. Studies show this will most likely hit businesses employing between 20 to 200 workers, more than a quarter of the American workforce.
New Investment Tax of 3.8 percent on the investment income of Americans who earn more than $200,000 ($250,000 for joint filers) a year, which would not be indexed for inflation. Investment income includes interest income, dividends, annuities, royalties, or rents, business income derived from a passive activity, and net capital gain unless derived from disposition of property held in the ordinary course of business. Many economists believe this tax will lead to dramatically higher marginal tax rates and less capital, resulting in less investment and job creation.
New Health Benefits Tax of 40 percent on so-called ‘Cadillac’ health plans costing more than $10,200 for singles and $27,500 for families. This would substantially increase taxes on many individuals and families making less than $250,000 a year.
New $60 Billion Health Insurance Tax, which would be imposed on health insurers based on their market share in order to meet an aggregate annual level. The non-partisan Congressional Budget Office (CBO) states this new tax will ultimately be passed onto consumers through higher premiums. Because large self-insured companies are exempt from the new tax, the vast majority of the tax and its higher health costs will fall on the health plans purchased by small businesses.
New Medical Device Tax of 2.3 percent. Taxable ‘medical devices’ include: wheelchairs, blood pressure monitors, pacemakers, inhalers, prosthetics, etc... Both the non-partisan Joint Tax Committee (JCT) and CBO have told Congress that these taxes will be passed along to consumers in the form of higher prices, which will make these medical devices less affordable and less accessible.
New Prescription Drug Tax based on annual company sales and set to reach a certain revenue target each year, starting with $2.5 billion in 2011. Both JCT and CBO have confirmed that a new tax on pharmaceuticals will be passed along to consumers with higher drug prices.
New Tanning Services Tax of 10 percent beginning July 1, 2010.
Individuals who fail to purchase government-approved health insurance would pay a fine equal to 2.5 percent of household income or $695, whichever is greater. This requirement begins in 2014, and CBO estimates it will mean a $17 billion new tax on individuals.
Beginning in 2014, American Businesses with more than 50 full-time employees will pay $2,000 in penalties, per employee, for failing to provide federally-approved health benefits (in some cases the fines are even higher). Economists believe that this employer mandate will result in lower wages and fewer jobs for workers.
More Regulation, Fewer Choices
Regulatory Uncertainty for the next several years, until the relevant federal agencies have promulgated regulations on the 2,800 pages of legislation.
Higher Health Care Costs from the new regulations and mandates. The non-partisan CBO estimates that reform would maintain the unsustainable status quo premium increases for small businesses and would increase premiums by 10 to 13 percent for individually-purchased plans. A non-government study by Oliver Wyman, based on real premium data, estimates the cost impact to substantially worse: 20 percent higher premiums for small businesses and 61 percent higher premiums for individuals in Texas.
All Health Plans would be required to cover new federal benefit categories known as “essential health benefits.” Only four levels of coverage, representing the percentage of costs covered by the health plan, would be legal for sale in the United States: bronze, silver, gold, and platinum. (Catastrophic plans would be permitted, but only for Americans under the age of 30.) This would restrict choice of more affordable plans with more flexible cost-sharing arrangements.
States Would Create “Exchanges” as central entities to compare and obtain insurance coverage for individuals and small businesses.
Restrictions on Patient-Controlled Health Plans would limit the use of funds from Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), and Health Reimbursement Accounts for over-the-counter medication. FSA contributions would be limited to $2,500 annually, and HSA withdrawals for non-qualified expenses would be subject to stiffer fines.
Employers Must Report the value of employee health benefits on W-2 forms.
New Cafeteria Plan Rules would require employers to meet minimum contribution requirements in order to obtain protection from nondiscrimination requirements.
New Corporate Information Reporting requirements for businesses, in addition to the current reporting requirements, for business-to-business transactions of more than $600 made to a single payee. The payments to be reported include gross proceeds in consideration for property or services.
Skyrocketing Federal Spending, Few Benefits for Job-Creators
Individual Tax Credits would be available for purchase of insurance for Americans making up to 400 percent of the federal poverty level (about $88,000 for a family of four). This would require new federal spending of $464 billion over just the first 6 years.
Medicaid Program Expansions would cover Americans making up to 133 percent of the federal poverty level creating a two-tiered system of health benefits: private insurance for wealthier Americans and Medicaid for low-income Americans. This would require new federal spending of $434 billion over just the first 6 years, pumping more taxpayer dollars into a failed system.
Small Business Tax Credits available only to employers with less than 25 full-time equivalent employees, and whose employees have annual wages that average no more than $50,000. This credit would cover between 35 and 50 percent of costs and only be available for a limited number of years. Based on a CBO estimate of the $2.6 trillion reform, only 12 percent of small businesses would benefit and only $40 billion would be spent on the small business credits nation-wide.
Higher Taxes, New Federal Mandates
Medicare Payroll Tax increase of 0.9 percent (on top of the current 2.9 percent) on income over $200,000 for individuals ($250,000 for joint filers), which would not be indexed for inflation so more small businesses would pay this new tax each year. Studies show this will most likely hit businesses employing between 20 to 200 workers, more than a quarter of the American workforce.
New Investment Tax of 3.8 percent on the investment income of Americans who earn more than $200,000 ($250,000 for joint filers) a year, which would not be indexed for inflation. Investment income includes interest income, dividends, annuities, royalties, or rents, business income derived from a passive activity, and net capital gain unless derived from disposition of property held in the ordinary course of business. Many economists believe this tax will lead to dramatically higher marginal tax rates and less capital, resulting in less investment and job creation.
New Health Benefits Tax of 40 percent on so-called ‘Cadillac’ health plans costing more than $10,200 for singles and $27,500 for families. This would substantially increase taxes on many individuals and families making less than $250,000 a year.
New $60 Billion Health Insurance Tax, which would be imposed on health insurers based on their market share in order to meet an aggregate annual level. The non-partisan Congressional Budget Office (CBO) states this new tax will ultimately be passed onto consumers through higher premiums. Because large self-insured companies are exempt from the new tax, the vast majority of the tax and its higher health costs will fall on the health plans purchased by small businesses.
New Medical Device Tax of 2.3 percent. Taxable ‘medical devices’ include: wheelchairs, blood pressure monitors, pacemakers, inhalers, prosthetics, etc... Both the non-partisan Joint Tax Committee (JCT) and CBO have told Congress that these taxes will be passed along to consumers in the form of higher prices, which will make these medical devices less affordable and less accessible.
New Prescription Drug Tax based on annual company sales and set to reach a certain revenue target each year, starting with $2.5 billion in 2011. Both JCT and CBO have confirmed that a new tax on pharmaceuticals will be passed along to consumers with higher drug prices.
New Tanning Services Tax of 10 percent beginning July 1, 2010.
Individuals who fail to purchase government-approved health insurance would pay a fine equal to 2.5 percent of household income or $695, whichever is greater. This requirement begins in 2014, and CBO estimates it will mean a $17 billion new tax on individuals.
Beginning in 2014, American Businesses with more than 50 full-time employees will pay $2,000 in penalties, per employee, for failing to provide federally-approved health benefits (in some cases the fines are even higher). Economists believe that this employer mandate will result in lower wages and fewer jobs for workers.
More Regulation, Fewer Choices
Regulatory Uncertainty for the next several years, until the relevant federal agencies have promulgated regulations on the 2,800 pages of legislation.
Higher Health Care Costs from the new regulations and mandates. The non-partisan CBO estimates that reform would maintain the unsustainable status quo premium increases for small businesses and would increase premiums by 10 to 13 percent for individually-purchased plans. A non-government study by Oliver Wyman, based on real premium data, estimates the cost impact to substantially worse: 20 percent higher premiums for small businesses and 61 percent higher premiums for individuals in Texas.
All Health Plans would be required to cover new federal benefit categories known as “essential health benefits.” Only four levels of coverage, representing the percentage of costs covered by the health plan, would be legal for sale in the United States: bronze, silver, gold, and platinum. (Catastrophic plans would be permitted, but only for Americans under the age of 30.) This would restrict choice of more affordable plans with more flexible cost-sharing arrangements.
States Would Create “Exchanges” as central entities to compare and obtain insurance coverage for individuals and small businesses.
Restrictions on Patient-Controlled Health Plans would limit the use of funds from Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), and Health Reimbursement Accounts for over-the-counter medication. FSA contributions would be limited to $2,500 annually, and HSA withdrawals for non-qualified expenses would be subject to stiffer fines.
Employers Must Report the value of employee health benefits on W-2 forms.
New Cafeteria Plan Rules would require employers to meet minimum contribution requirements in order to obtain protection from nondiscrimination requirements.
New Corporate Information Reporting requirements for businesses, in addition to the current reporting requirements, for business-to-business transactions of more than $600 made to a single payee. The payments to be reported include gross proceeds in consideration for property or services.
Skyrocketing Federal Spending, Few Benefits for Job-Creators
Individual Tax Credits would be available for purchase of insurance for Americans making up to 400 percent of the federal poverty level (about $88,000 for a family of four). This would require new federal spending of $464 billion over just the first 6 years.
Medicaid Program Expansions would cover Americans making up to 133 percent of the federal poverty level creating a two-tiered system of health benefits: private insurance for wealthier Americans and Medicaid for low-income Americans. This would require new federal spending of $434 billion over just the first 6 years, pumping more taxpayer dollars into a failed system.
Small Business Tax Credits available only to employers with less than 25 full-time equivalent employees, and whose employees have annual wages that average no more than $50,000. This credit would cover between 35 and 50 percent of costs and only be available for a limited number of years. Based on a CBO estimate of the $2.6 trillion reform, only 12 percent of small businesses would benefit and only $40 billion would be spent on the small business credits nation-wide.