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	<title>Comments on: Will Taxing Health Care Benefits Pay for Reform?</title>
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	<description>Money management for the 21st century</description>
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		<title>By: Fred Siegmund</title>
		<link>http://www.automaticfinances.com/taxing-health-care-benefits/comment-page-1/#comment-1484</link>
		<dc:creator>Fred Siegmund</dc:creator>
		<pubDate>Tue, 23 Jun 2009 18:09:06 +0000</pubDate>
		<guid isPermaLink="false">http://www.automaticfinances.com/?p=537#comment-1484</guid>
		<description>Larry,

You are right to point out the tax expiration and the return to the Clinton tax rates. I ignored that partly because it is two years off, but also because it still seems to me that marginal tax rates are something the Congress wants to avoid talking about. The millions without health care will not have it without some better sense of community and the willingness of those with more to help those with less. In effect, the Baucus proposal has the working and moderately well to do subsidizing those without jobs or with jobs without health care. It is better than nothing, but I see the failure to discuss plans that will tax the very rich as a political favor. Right now those who work without health insurance pay 1.45 percent payroll tax to subsidize health care for those already retired, but also they pay higher tax rates to pay for the employer sponsored benefits for those of us who do have health care. I see the status quo as the poor subsidizing the rich. I don&#039;t see it as private enterprise as many claim. Like you say we will just have to wait and see.</description>
		<content:encoded><![CDATA[<p>Larry,</p>
<p>You are right to point out the tax expiration and the return to the Clinton tax rates. I ignored that partly because it is two years off, but also because it still seems to me that marginal tax rates are something the Congress wants to avoid talking about. The millions without health care will not have it without some better sense of community and the willingness of those with more to help those with less. In effect, the Baucus proposal has the working and moderately well to do subsidizing those without jobs or with jobs without health care. It is better than nothing, but I see the failure to discuss plans that will tax the very rich as a political favor. Right now those who work without health insurance pay 1.45 percent payroll tax to subsidize health care for those already retired, but also they pay higher tax rates to pay for the employer sponsored benefits for those of us who do have health care. I see the status quo as the poor subsidizing the rich. I don&#039;t see it as private enterprise as many claim. Like you say we will just have to wait and see.</p>
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		<title>By: Louis</title>
		<link>http://www.automaticfinances.com/taxing-health-care-benefits/comment-page-1/#comment-1467</link>
		<dc:creator>Louis</dc:creator>
		<pubDate>Tue, 23 Jun 2009 05:43:32 +0000</pubDate>
		<guid isPermaLink="false">http://www.automaticfinances.com/?p=537#comment-1467</guid>
		<description>Leaving the politics of health care reform aside, the argument you make about raising marginal tax rates from 35% to 39.6% is not a possible solution for funding health care (estimated to costs anywhere from $1 - 1.6 Trillion).

Tax reform bills can either be permanent provisions or expiring (&quot;sunset&quot;) provisions depending on the method and number of votes the bill gets when it passes through Congress. 
When Congress passed the Bush Administration&#039;s tax cuts in 2001 and 2003, they were not passed as permanent tax cuts.  Congress budgeted these tax cuts to end in 2010.  In other words, if the Bush cuts were not extended by another act of Congress, marginal rates would automatically go back to the rates established under Clinton (39.6% marginal rate).  Therefore, when the government prepares their budget every year (generally done in 10 year increments), the calculations for years 2011 and forward are already based off the 39.6% tax rate.  As the law stands now, the 39.6% tax rate will be in effect beginning in the 2011 taxable year.

President Obama and Congress have made it clear that they currently do not intend to extend certain parts of the Bush tax cuts and marginal rates will go back to 39.6% in 2011.  During parts of his campaign, President Obama hinted that he may raise rates immediately for the highest income tax bracket in 2010, effectively REPEALING the Bush tax cuts a year early.  Due to the recent economic conditions, President Obama and Congress did not repeal the tax cuts and simply chose not to extend certain the provisions on the highest income earners.  Even if Congress decided to repeal the cuts and raise rates to 39.6% for 2010 as a revenue raiser for health care, the extra revenue or this one year would be no where near the amount to fund health care.

As a result, as you have correctly pointed out, Congress is testing the waters to find ways to fund health care.  In Obama&#039;s budget proposal, one of the main revenue raiser for health care was limiting the tax rate at which itemized deductions reduced liabilities to 28%.   This did not have much support in Congress originally, but is starting to pick up a little bit of momentum.

While not specifically stated to be used to fund health care currently, last month President Obama unveiled an International Tax reform proposal which was scored at $159 billion by the Joint Committe of Taxation.  This could also end up being one of the revenue raisers for health care reform if Congress needs revenue.

It will be interesting to see what happens in Congress and the ways they come up to fund health care.  Taxing employer proivded health benefits seems to have the most steam right now.  As many newspapers have pointed out, McCain proposed this in his campaign.  However, what some of the newspapers are not telling you is that McCain also proposed a $5,000 tax credit to offset the cost.  To my knowledge, that tax credit is not associated with Baucaus&#039;s proposal, making the comparison to McCain&#039;s plan unfair in my opinion.</description>
		<content:encoded><![CDATA[<p>Leaving the politics of health care reform aside, the argument you make about raising marginal tax rates from 35% to 39.6% is not a possible solution for funding health care (estimated to costs anywhere from $1 &#8211; 1.6 Trillion).</p>
<p>Tax reform bills can either be permanent provisions or expiring (&#034;sunset&#034;) provisions depending on the method and number of votes the bill gets when it passes through Congress.<br />
When Congress passed the Bush Administration&#039;s tax cuts in 2001 and 2003, they were not passed as permanent tax cuts.  Congress budgeted these tax cuts to end in 2010.  In other words, if the Bush cuts were not extended by another act of Congress, marginal rates would automatically go back to the rates established under Clinton (39.6% marginal rate).  Therefore, when the government prepares their budget every year (generally done in 10 year increments), the calculations for years 2011 and forward are already based off the 39.6% tax rate.  As the law stands now, the 39.6% tax rate will be in effect beginning in the 2011 taxable year.</p>
<p>President Obama and Congress have made it clear that they currently do not intend to extend certain parts of the Bush tax cuts and marginal rates will go back to 39.6% in 2011.  During parts of his campaign, President Obama hinted that he may raise rates immediately for the highest income tax bracket in 2010, effectively REPEALING the Bush tax cuts a year early.  Due to the recent economic conditions, President Obama and Congress did not repeal the tax cuts and simply chose not to extend certain the provisions on the highest income earners.  Even if Congress decided to repeal the cuts and raise rates to 39.6% for 2010 as a revenue raiser for health care, the extra revenue or this one year would be no where near the amount to fund health care.</p>
<p>As a result, as you have correctly pointed out, Congress is testing the waters to find ways to fund health care.  In Obama&#039;s budget proposal, one of the main revenue raiser for health care was limiting the tax rate at which itemized deductions reduced liabilities to 28%.   This did not have much support in Congress originally, but is starting to pick up a little bit of momentum.</p>
<p>While not specifically stated to be used to fund health care currently, last month President Obama unveiled an International Tax reform proposal which was scored at $159 billion by the Joint Committe of Taxation.  This could also end up being one of the revenue raisers for health care reform if Congress needs revenue.</p>
<p>It will be interesting to see what happens in Congress and the ways they come up to fund health care.  Taxing employer proivded health benefits seems to have the most steam right now.  As many newspapers have pointed out, McCain proposed this in his campaign.  However, what some of the newspapers are not telling you is that McCain also proposed a $5,000 tax credit to offset the cost.  To my knowledge, that tax credit is not associated with Baucaus&#039;s proposal, making the comparison to McCain&#039;s plan unfair in my opinion.</p>
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		<title>By: Brad</title>
		<link>http://www.automaticfinances.com/taxing-health-care-benefits/comment-page-1/#comment-1464</link>
		<dc:creator>Brad</dc:creator>
		<pubDate>Tue, 23 Jun 2009 04:05:23 +0000</pubDate>
		<guid isPermaLink="false">http://www.automaticfinances.com/?p=537#comment-1464</guid>
		<description>Personally I do not think the Government should even be in the business of trying to cover everyone, nor should it be robbing from the rich to give to the poor.  

There are already failed Government programs in place for those that need it, why create another one?  Most importantly, why ruin the best health care system in the world?  The one we have just needs to be fixed not changed.  If the Government does anything they should find a way to make the current health care more affordable for all.

Why not make people realize that instead of waiting for an inept Government system that has failed in almost every program it has created to &quot;save&quot; the poor, teach them to make better decisions with their money.  No stupid lottery, no brand new cars, no bloated mortgage, and no expensive toys.  First health insurance, then toys.  It&#039;s about priorities!

STUPID SOLUTION:  Asking the same government that spends too much, can&#039;t budget for crap, wastes more money than could help ALL the poor people in America ten fold, and is ineffective at running or maintaining ANY Government program to fund and keep afloat yet another Government program.</description>
		<content:encoded><![CDATA[<p>Personally I do not think the Government should even be in the business of trying to cover everyone, nor should it be robbing from the rich to give to the poor.  </p>
<p>There are already failed Government programs in place for those that need it, why create another one?  Most importantly, why ruin the best health care system in the world?  The one we have just needs to be fixed not changed.  If the Government does anything they should find a way to make the current health care more affordable for all.</p>
<p>Why not make people realize that instead of waiting for an inept Government system that has failed in almost every program it has created to &#034;save&#034; the poor, teach them to make better decisions with their money.  No stupid lottery, no brand new cars, no bloated mortgage, and no expensive toys.  First health insurance, then toys.  It&#039;s about priorities!</p>
<p>STUPID SOLUTION:  Asking the same government that spends too much, can&#039;t budget for crap, wastes more money than could help ALL the poor people in America ten fold, and is ineffective at running or maintaining ANY Government program to fund and keep afloat yet another Government program.</p>
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