As a politically involved person, I have often been asked why I became a CPA. My answer has always been clear and simple – the public policy of this country runs through the tax code and I wanted to understand that code. Never in my 35-year practice has anything validated that decision like the Patient Protection and Affordable Care Act. This is not health care reform; it is a full-employment act for CPAs.
In an era where Congress changes the tax law more frequently than a Hollywood actress gets Botox shots, nothing has ever come along like this behemoth. My tax service sent me a list of the Internal Revenue Code sections affected by the bill. It came to 22 pages (in small type), enumerating changes in 231 different Code sections. Of course, that’s before the bureaucrats and the IRS get their hands on this. Once you realize that the IRS will be adding 16,500 new agents to enforce our “Health Care” laws, you’ll begin to understand what this whole fight was about. It has very little to do with your health, and a lot to do with control of your life.
Let’s start with Obama’s big lie. It is absolutely indisputable that taxes are being raised on people whose income is below the magical figure of $250,000. The way it’s done is by reducing the medical-expense deduction. Currently, you’re allowed to deduct out-of-pocket medical expenses that exceed 7.5% of your income, but the new law changes that to 10%. This means if your income is $100,000, and you paid $10,000 in hospital bills, you will lose a $2,500 deduction and probably pay about $700 in additional taxes. In a country in which only 12% of health care expenses are paid by the individuals who actually receive the services, this increase will just encourage more people to shift those costs to third-party payers.
Then there is the familiar political trick; i.e., claiming that your taxes are not being raised, but at the same time increasing taxes on companies that sell things to you. Of course, those companies just pass the cost along to you. Under this “reform,” new fees and taxes are being imposed upon three medical industry groups: health insurers, medical device manufacturers, and pharmaceutical companies. The insidious objective here is not just to hide the real cost of this new plan, but to encourage exasperated Americans – who ultimately have to pay these rising costs – to view government-run health care more favorably.