WASHINGTON -- President Obama absolutely refuses to acknowledge there is a huge middle-class tax in the Senate Finance Committee's healthcare bill. The president flatly denies the legislation that the White House supports contains a stiff penalty tax that would hit uninsured middle-income people the hardest -- the very folks he promised would never see their taxes rise under his presidency.
Obama has repeatedly stated that promise throughout the healthcare debate, despite evidence to the contrary, and no one in the national news media has called him on it. That is, until George Stephanopoulos raised the issue with him Sunday on ABC's "This Week."
First, Stephanopoulos reminded the president that in his campaign for the presidency he was "against the individual mandate" that all Americans be required to buy health insurance.
"Yes," Obama replied.
Then Stephanopoulos hit him with the question no one apparently had asked him before. Pointing out that the Finance Committee plan contained just such a mandate whereby "the government is forcing people to spend money, fining you if you don't," he asked, "How is that not a tax?"
Obama replied, "No, but ... but, George, you ... can't just make up that language and decide that that's called a tax increase."
"You reject that it's a tax increase?" Stephanopoulos asked. Obama said, "I absolutely reject that notion."
But if Obama looked on page 29 of Senate Finance Committee Chairman Max Baucus' legislation -- the bill he hopes will enact his healthcare plans into law -- he would have read this line: "The consequence for not maintaining (health) insurance would be an excise tax."
What part of those two words doesn't he understand? The government imposes a raft of excise taxes on all of us: the tires for our cars, alcoholic beverages, jewelry and many other purchases. Now it wants to add health insurance to the tax-revenue list as a penalty for those who do not purchase a product the feds insist you must buy or else face fines up to $950 for an individual and up to $3,800 a year for a family.
The House healthcare bill, which is stuck in a holding pattern awaiting the Senate's version, also makes no attempt to disguise what the mandated penalties are called: a "tax on individuals without acceptable healthcare coverage."
On Sept. 12, 2008, candidate Obama told voters in Dover, N.H., "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital-gains taxes, not any of your taxes."
But since his election, Obama and his Democratic allies on Capitol Hill have been ignoring that no-tax pledge left and right.
The House-passed climate-change energy bill, pending in the Senate, would essentially impose pass-through taxes on everyone's electric and home-heating bills, the gas in their car and virtually everything else that consumers buy. Obama signed the tobacco-tax-hike bill earlier this year. He plans to raise the two top income tax rates that will fall heavily on small business. All these taxes hit middle-income Americans making far less than $250,000.
Now, Obama may think that a penalty or fine is not really a tax, but that would be duplicitous, say top tax accountants.
"If you put something in the Internal Revenue Code, and you tell the IRS to collect it, I think that's a tax," Clint Stretch, head of the tax-policy arm of the Deloitte accounting firm, told the Associated Press. "If you don't pay, the person who's going to come and get it is going to be from the IRS," he said. The House Republican Study Committee, the caucus of conservative lawmakers, said it best this week in their "Shot of Common Sense" blog: "Whether it's to combat global warming, pay for new 'social justice' programs, or fund a government takeover of health care, taking money from earners and giving it to Washington is a tax."
But Obamacare will whack the middle class in other ways, too. The government will force an estimated 30 million uninsured people to buy coverage that will impose a huge new financial burden on the middle class, something Sen. Baucus was trying to fix this week through increased subsidies that will drive up costs and thus the need for higher taxes.
Baucus' plan will slap the most expensive healthcare plans (that cost more than $8,000 for individuals or $21,000 for families) with a 35 percent tax on insurers that will be passed on to consumers. That will hit federal employees and labor-union members, who have costlier plans, especially hard. Seniors have plenty to worry about, too. Baucus' bill will be financed by nearly $400 billion in Medicare cuts that, despite Obama's assurances to the contrary, will reduce payments, services and benefits.
With skittish Senate Democrats, who face a tough political environment in next year's midterm elections, threatening to oppose the Baucus bill for these and other reasons, Obamacare's prospects have suddenly grown considerably bleaker.