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Tags: finance, taxes, the proposed health care bill
 The biggest news to come out of Capitol Hill these days, other than the Sonia Sotomayor confirmation hearings is the proposed health care bill known as the America’s Affordable Health Choices Act (H.R. 3020). This bill is currently being pushed through both houses of Congress. This legislation is in response to President Obama’s domestic agenda of revamping the current health care system.
According the House Democrat’s $1.5 trillion (yes you read it right, that’s $1.5 trillion) plan would make “health care a right AND a responsibility of every American” out there. From my understanding of it all, based upon news and reports that have come out on this issue, everyone is required to have coverage and that we would be penalized, through a tax, if we do not avail of said coverage when an affordable one is made available to us.
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Universal health care coverage is something we should have but forcing people to get one just because it is there is sort of—I don’t know…undemocratic? For the most part, I am sure we all want to have coverage it’s just that for many of us especially during this time of economic hardship even an affordable one is not affordable.
The good thing is that President Obama has reversed his stance on requiring everyone to buy health care coverage—he is now in favor of having a hardship exemption as part of an individual mandate, saying that, "If somebody truly just can't afford health insurance even with the subsidies that the government is now providing, we don't want to double penalize them." President Obama has promised no additional deficit spending so his proposal is to “reduce the tax deductions available to the wealthy as well as trimming Medicare payments made to insurance companies.” The House, in order to fund this proposed plan, wants to apply a surtax on those people whose income is above $280,000 annually and gradually goes up as income increases.
At the same time there are also the penalties for those who will not get coverage even if available (subject to the hardship exemption) as well as to those employers who don’t provide needed coverage. They will be hit with a penalty equal to 8 percent of their worker’s wages.
According to supporters, the penalties are equal to the cost of an average insurance plan. However, the surtax is one major reason the National Association of Manufacturers (NAM) is against this legislation. They argue that “70% of manufacturers file at individual rates and would be hit hard by this surtax." Moreover, they claim that “the imposition of a tax surcharge as a ‘pay for’ for health care reform legislation would threaten small business investment, growth, job retention and creation, employee benefits and funding for R&D.” What the final version of the proposed health care bill will be is still anybody’s guess since multiple committees have their own versions.
At the same time this has divided congress down party lines. And as more information comes out on the tax consequences to individuals and business, there would be added debate on the issue. And whether this program will actually work is up to the American public to decide.
About the author
The author of this article Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick recently published a book on how to manage your money and attract Wealth and Financial Freedom. More info on his Finance Planning course is available HERE.
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