Thursday, July 30, 2009

The Truth about House Democrats’ Tax Increases

More than $800 Billion in Job-Killing Revenues

 

Even as they attempt to enact a government takeover of health care, Democrats fail to face the facts about the scope of the tax increases in their own legislation—that according to official estimates from both the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT), the House Democrat health “reform” bill (H.R. 3200) would raise taxes by well over $800 billion:

  • The Joint Committee on Taxation (JCT), in its official score of the Democrat bill, found that the “surtax” on high-income filers—more than half of whom are small businesses—imposed in Section 441 would generate more than half a trillion dollars in revenue—$543.9 billion over ten years.
  • Section 412 of the bill would impose new taxes on businesses who cannot afford to fund “bureaucrat-approved” health coverage for their workers. According to CBO and JCT, these provisions would generate an additional $208 billion in revenue.
  • JCT also found that additional tax increases—including worldwide interest penalties ($26.1 billion), treaty withholding ($7.5 billion), and codification of the economic substance doctrine ($3.6 billion)—included in pages 204-15 of the bill would raise taxes by an additional $37.2 billion.
  • Section 1802 of the bill includes provisions imposing a tax on health benefits—breaking a promise by Speaker Pelosi that, “We will not be taxing [health] benefits in any bill that passes the House.” This provision would raise taxes by an additional $2 billion over ten years.
  • Finally, the bill includes taxes on individuals who do not purchase “bureaucrat-approved” health insurance. According to Section 401 of the bill, this tax increase would be applied to all individuals—including those with incomes under $250,000, thus breaking a central promise of then-Senator Obama’s campaign. According to CBO and JCT, these provisions would raise taxes by $29 billion over ten years.
  • Thus the total amount of tax increases included in the Democrat bill—according to official estimates—is $820.1 billion over ten years.

Imposing these new tax increases in the middle of a recession—with unemployment at 26-year highs—will only harm the economy and kill jobs. In fact, a study by Harvard Professor Kate Baicker indicates that a minimum of 5.5 million workers will be “at substantial risk of unemployment”—and that minority workers are twice as likely to lose their jobs as their white counterparts. Given these facts, one may understand why Democrats would not want to admit the truth about the full scope of their harmful tax increases.