by Phil Kerpen, Vice President, Policy, Americans for Prosperity
We suffered a huge setback in the fight for freedom when the president signed the Democrats' massive health care takeover bill into law. But the Senate is poised, perhaps as soon as today, to add a chaser to that bill that will make things much, much worse. In any other year, it would be the worst bill of the year.
The “Reconciliation Act of 2010” includes:
1. A disastrous tax hike on capital gains and dividends. That’s the most anti-growth tax hike possible. The Reconciliation Act creates a new 3.8-percent Medicare tax on single filers over $200,000 and married filers over $250,000. The rich? Not quite. This slams business owners and makes it harder for them to raise capital for needed equipment purchases, expansion, and job creation. And there is no inflation indexing, so it will directly hit more and more taxpayers over time.
2. An increase in the health care penalty tax on employers from $750 per uncovered employee to $2,000.
3. A total takeover of the student loan industry, putting tens of thousands out of work in the private sector while building up a big new student loan bureaucracy.
4. A "fix" to the Cadillac tax that actually makes it worse, not better. Under current law the exemption amount is indexed to CPI plus 1 percent. That is not enough to keep up with medical costs. The reconciliation bill delays the start of the tax by five years, from 2013 to 2018, but it cuts the inflation adjustment to plain CPI. The lower inflation adjustment means that once the tax starts it will hit more people faster.
5. A Nebraska "fix" (the only one of the infamous and corrupt deals Obama signed into law yesterday that’s actually revisited in the reconciliation) that is actually a much worse deal for taxpayers. Nebraska no longer gets special treatment, but the new Medicaid funding formula puts federal taxpayers on the hook for 90 percent of the cost of expansion for all states, with special funding increases for 17 states and the District of Columbia. This is welfare reform in reverse; we should be building on the AFDC block-grant model of state control and innovation that worked so well in the 1990s, not federalizing Medicaid.
Please click now to tell your U.S. senators to vote NO on the disastrous reconciliation tax hike bill.
We lost the first round of the health care fight, which was tragic. But we can't sit by shell-shocked while the Senate follows it up with this disastrous tax-hiking reconciliation bill.