March 24, 2010
"And when this exchange is up and running, millions of people will get tax breaks to help them afford coverage, which represents the largest middle-class tax cut for health care in history" --President Obama, remarks while signing health care takeover legislation with over $500 billion in tax increases.
President Obama and Sen. Dick Durbin (D-IL) have both recently said that the Democrat health care takeover includes the "largest health care tax cut" in history. That statement is patently false. Here are the facts:
Government Spending is Not a Tax Cut: The president and Sen. Durbin claim that $466 billion in subsidies paid directly to big insurance companies is a "tax cut."
- Beginning in 2014, the Democrats health care takeover would provide $466 billion in subsidies for health care premiums directly to insurance companies, not in the form of tax cuts. According to the legislation, "the Secretary of the Treasury shall make the advance payment under this section of any premium tax credit allowed under section 36B of the Internal Revenue Code of 1986 to the issuer of a qualified health plan on a monthly basis." This provision is a direct payment to insurance companies. It would not reduce any individual's tax liability, and is therefore not a tax cut.
- According to the Joint Committee on Taxation (JCT), by 2019 only 7 percent of the 176 million tax filers in the U.S. would benefit from premium subsidies paid to insurance companies.
- By 2019, JCT estimates that 163 million people or 93 percent of all Americans would receive absolutely no benefit from the government's payments to insurance companies. So according to the president, the largest tax cut in history is a $466 billion direct payment to private insurance companies that does not reduce any tax liability and does not benefit 93 percent of Americans.
An Enormous Tax Increase: The health care takeover would increase taxes by $569.2 billion at the worst possible time, as unemployment hovers around 10 percent and our economy struggles to rebound.
- The Democrats health care takeover includes 12 different tax provisions totaling nearly $250 billion that would impact middle class Americans and violate President Obama's pledge that, "Under my plan, no family making less than $250,000 a year will see any form of tax increase."
- According to CBO, the legislation would impose $52 billion in tax penalties on businesses that cannot afford to pay their employees' health care premiums, which adds a huge new burden on the nation's job creators.
- The tax increases in the bill between 2010 and 2019 are used to offset the cost of health care spending between 2014 and 2019. Even with $570 billion in tax increases, the Democrats still cannot pay for their expansive health care takeover.
Hidden Tax Increases: The Democrat health care bill includes a hidden tax increase on every individual and every business by raising the cost of insurance premiums and penalizing those who don't pay.
- Under the bill's mandates, every individual and business would be forced to buy insurance for themselves or their employees at the increased rates or face yet another penalty in the form of a tax increase.
For additional information, contact:
The House Republican Conference Policy Office