Blog Entry

While Obama picked his brackets the media slept

Posted on: June 8, 2009 5:44 pm
 
I have been quiet for too long....

Folks, I hate to be the one to say I told you so, but I told you so. Many people tried to tell you so, but you would not listen. Obama is going to raise your taxes. All of you are about to feel a tax increase that will hit us all hard. More to the point the folks in the less than $75K range will be crushed by the tax increase. Heck under $30 K will see a $2000 tax increase! All this to pay for ObamaCare, the national healthcare plan. These are the bread and butter folks that support Obama. Will they stand for being lied too?

People are going to flip out, folks. The Unions are going to flip out and turn on him. Average Americans are going to flip out and turn on him. 62% of Americans do not support this tax increase to pay for ObamaCare. This is the same proposal made by McCain during the campaign that was shredded by Obama as unAmerican, taxing your employer healthcare benefits, how dare you! Yet that is just what he and his Democrats in power are proposing.

And it appears the quality of our coverage, read that to mean the quality of your healthcare will reduce to a minimum standard as put forth by the GOVERNMENT, not your doctors. Read the attached article below and please tell me how you feel. If you voted for Obama, I want to hear you explain this. Please, I am all ears.

First he said he was going to undo Bush policies on torture, apply civil due process for detainees (can't call them terrorists) and war prosecution in the MidEast and Afganistan, yet Obama has continued or intensified the Bush policies in all cases! Anyone tired of being lied to?



The Article from MSNBC June 8

As part of a health insurance reform package now before Congress, some of the 164 million Americans who are covered by employer-provided health plans could be asked to give up at least part of the longstanding tax exemption granted to such compensation.

It’s an idea likely to be met with howls of opposition if it makes it into the final version of health insurance legislation that President Barack Obama is pushing.

The idea of limiting the tax break for employer-provided insurance gained momentum last week, when Obama told senators that he’d consider it as one ingredient of the  health insurance reform bill he wants Congress to pass by early August, when the Senate starts a one-month recess.

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., who conveyed Obama’s willingness to consider the idea after a White House meeting Tuesday, has said the tax treatment of employer-provided health insurance ought to be made "fairer and more equitable for everyone."

Will you end up with more taxable income?

While details of such an approach are still sketchy, it would likely involve employees paying tax on a percentage of their employer-provided health benefits. So if Congress decided that all such premiums in excess of $11,000 for family plans would be taxable income, and your company paid premiums worth $16,000 for your coverage, you’d have to pay taxes on $5,000. 

Obama’s new openness to the idea stands in contrast to what he said six months ago as a presidential candidate, when he harshly criticized his Republican rival, Sen. John McCain, for proposing that employer-provided benefits should be taxed.

Scolding McCain in their debate on Oct. 15, Obama said, "This is your plan, John. For the first time in history, you will be taxing people's health-care benefits." Obama also pledged last year not to raise taxes for families making less than $250,000, and a health benefits tax, depending on how it was structured, could run afoul of that promise.

The tax exemption on employer-provided health insurance, which dates to 1943, has already survived one attempt to limit it.

An echo of Ronald Reagan

In 1984, President Ronald Reagan floated the idea of requiring workers to pay taxes on employer contributions to their health insurance exceeding $2,100 a year. A Washington Post editorial the following year called the proposal "surprisingly lucrative yet eminently fair," and speculated that "(it) might have helped hold down health care costs in the bargain." But opposition, especially from labor unions, scuttled the proposal.

 

Folks with an adjusted gross income of less than $10 grand would pay an average of $635 more in taxes a year, generating $3.6B.

Folks with an adjusted gross income of $10-30k would pay an average of $1952 more in taxes a year, generating $34.4B.

$30-50K would pay $2,457 morea year and generate $42.7 Billion.

$50-75K would pay $3,095 more a year and generate $46B.

$75-100K would pay $3,900 more a year and generate $37B.

$100-199K would pay $4,481 more a year and generate $48B.

$200-500K would pay $4,728 more a year and generate $11.6B.

Folks making over $500K would pay $4,467 more a year and generate $2.7B for the Federal Healthcare program.

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Ouch!!!

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Obama’s new receptivity to the tax springs from the massive sums of money needed to pay for expanding health coverage to the uninsured.

Obama’s Council of Economic Advisors last week cited a figure of about $125 billion a year to insure the uninsured. But the president aims to do more than that. He also wants to subsidize the cost of coverage for lower-income people, subsidize COBRA coverage for those who lost their jobs and make other changes. MIT economist Jonathan Gruber told the Finance Committee last month that curbing the health insurance tax break was "both the most natural source of financing for health care reform" and "one of the few that is clearly large enough to finance the subsidies needed for reform."

According to the congressional Joint Committee on Taxation, the Treasury misses out on $226 billion a year because employer spending on health insurance isn’t counted as taxable income.

That figure dwarfs any other potential health-related revenue sources that have been identified as possibilities to help fund the health care expansion. Among them are a 3-cent-per-can tax on sugar-sweetened beverages, which the Congressional Budget Office estimates would raise about $50 billion over 10 years, or increasing taxes on beer, wine and distilled liquor which, under one CBO scenario, would raise $60 billion over 10 years.

According to an analysis by the Joint Committee on Taxation, curbing the tax break for employer-provided health insurance would primarily affect the wealthy, who "receive the greatest tax benefit from the exclusion from income." According to Gruber, "about three-quarters of these dollars go to the top half of the income distribution."

But opposition to the proposal may be as big a problem for Obama as it was for Reagan.

A Kaiser Family Foundation survey in April that asked whether workers "with the most generous health care benefits" should be required to pay taxes on their coverage found 52 percent of respondents opposed to the idea. Of those who currently have employer-sponsored health insurance, 62 percent opposed it. (The poll of 1,203 adults had a margin of error of plus or minus 3 percentage points.)

Will Americans bridle at loss of tax break?

The U.S. Chamber of Commerce warned Baucus in a letter last month that workers view employer-provided insurance "as duly-earned income" that should be "protected from the tax collector. This perception perhaps explains why the president was so successful in campaigning against Senator McCain’s health reform proposal — Americans generally do not support tax increases."

The American Benefits Council, which represents principally Fortune 500 companies, is also opposed to the idea of limiting the tax break for employer-provided insurance.

"It is likely to lead to higher deductibles or co-pays, so there’s higher cost sharing" by workers, said the group’s health care spokesman, Paul Dennett. If Congress were to set the threshold for taxation of benefits at $13,000 for a family coverage plan, then employers "in order to help workers not face taxation, may offer coverage below that threshold. This is a course employers say they would likely take."

Reduction in health benefits?

Economist Elise Gould at the liberal think-tank the Economic Policy Institute gave a similar assessment. Employers would see the threshold for taxation as what the government deemed the target level for health benefits, she said. "Employers will respond by reducing the comprehensiveness of benefits. They’ll likely target premiums to fall below the (threshold) value or just at that value, so employees don’t have to pay those additional taxes." Corporate America also fears that a limit on the tax break for health insurance would create an administrative nightmare, especially for large firms with employees in different states who face widely varying health care costs. And opposition also remains strong among labor unions, which were big Obama backers in last year’s election.

Barbara Coufal, the assistant director of legislation at American Federation of State, County, and Municipal Employees, said, "We don’t think we need to look inside the health care system to seek all the revenues we need for health care reform. Over the last 10 years, there have been a lot of tax breaks that have been given to the wealthy and to businesses. We maybe ought to look there and restore some equity." With momentum growing to enact some limit on the tax break for health benefits, increasing energy is being devoted to develop a workable taxation scheme.

Target upper-income Americans?

Gruber suggested the possibility of having a baseline so that only families with incomes above $125,000 per year would pay tax on their benefits. Gruber said this would still raise a lot of revenue: more than $40 billion a year if the cap were indexed to increases in the Consumer Price Index. But in its letter to Baucus, the Chamber of Commerce said that such a proposal might "foster class warfare by (repealing the exclusion) … for certain income earners and not affecting others." Baucus, a 30-year Senate veteran, knows the politics of this issue are delicate. Limiting the tax break for employer-provided health benefits has "got to be done in a very sensitive way, to make sure the limits are high enough," he was quoted as saying last Thursday by the Capitol Hill publication CQ Today. Yet if Congress changes the law so that the tax bite ends up hitting only the wealthy, it might not raise enough revenue to help pay for health insurance overhaul. "That’s the real dilemma," said Dennett, of the American Benefits Council. "The lower the threshold is set, then the lower the revenue gain — and the scramble would be on to find other revenue sources."


I feel better now.  Thanks.
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Comments

Since: Jan 17, 2008
Posted on: June 9, 2009 12:52 pm
 

While Obama picked his brackets the media slept

Trust me, this will come back to haunt Obama. There are going to be some pissed off people after this is all said and done.



Since: Jan 17, 2008
Posted on: June 9, 2009 12:44 pm
 

While Obama picked his brackets the media slept

If anything GM is going backwards as far as product. They announced that they will be getting out of the medium duty truck market which was one of their biggest profit margin vehicles. Ford has pretty much put them out of the market in that arena. They just can't compete.  Camaro is pretty much the only bright spot in their lineup. The rest of their product is almost unchanged under the skin with the
exception of one hybrid model.

I met with the owner of my store which is a Ford store yesterday for about four hours and he also owns a GM franchise. He kind of has the inside scoop on what is really happening with GM and he told me some interseting things. I can't share it all but what I can tell you is that GM sent out a letter to all of their franchises that basically said sign this letter or you will be forced to shut you doors on Friday. This Friday. The letter was very onesided towards GM of course. Saying things like you cannot sue us but we will be allowed to sue you. Everything was in GM's favor basically taking away almost all power the owner has within his franchise. If you did not recieve this letter you got the wind down letter saying we're shutting you down, on Friday. If you are a stand alone Cadillac dealership that is not next door to a BMW, Lexus or Mercedes dealership, you are done. Close your doors. If you don't return this letter by Friday to GM you are done, close your doors, your new cars are now used, your parts are yours, your warranty claims are yours and you will get no support from us at all. This has never happened in the history of the car business. Starting Monday for those who agreed to sign the onesided letter there will be a restructuring of stores and GM will decide which stores they want to keep open and which stores they want to shut down. So, it should be a pretty interesting next couple of weeks to see which stores survive and which stores shut their doors. There will be major changes for the stores that survive in the way that they are ran and that's really all I can say about that.

Big Papa DCool



Since: Oct 14, 2006
Posted on: June 9, 2009 12:18 pm
 

While Obama picked his brackets the media slept

No I am not way off here.  People vote with their pocket books not foreign policy case in point last November.  Raising taxes as much as he will have to will greatly impact his re-election.  FACT.
People voted last year because the economy tanked..on many levels due to paying billions into an unwinnable war..Mortgage Crisis..Wall Street etc.....people lost their retirement....their jobs...that why they voted the way they did....


The problem with finding bin Laden is you better liquidate him because if you try him in civil court with the ACLU coming to his defense, well....
Yeah..the ACLU has had a lot of success in Guantanamo..If you are labeled an enemy combatent...the ACLU has no legs...come on Smorgie you know that...

Peace in the Middle East?   What koolaid are you drinking?  IF Iran elects a moderate that somehow takes power away from the clerics and hardliners, IF Israel doesn't take out Iran's nukes, IF Palestine settles down, IF Pakistan doesn't fall apart, IF, IF.....
A lto of ifs...but taking the first step was huge..I would not poo poo it by any stretch.....and if...or should I say when he opens back up the borders to Cuba and  US companies find their way back there ....it will have a husge impact on the economy...is ACE in the hole right now..

How about peace on the Korean peninsula? Yeah his foreign policy and use of his Apology Weapon realy inspire me. And then there is ol' Putin biding his time.  Yeah, appeasement always fails.
Just curious..you throw a lot of mud ...but I never here any solutions...other than put Republicans back in office...tell me what would you do if you where in his shoes with Korea right now?

Now back to my point about the economy - Obama's administration has made some very heavy handed deals that have hurt business and investors. Not the least of which are the secured debt holders in GM and Chrysler who got destroyed in favor of the Union.  You mean to tell me that Obama is not going to have that come back to haunt him?  Yeah right.


 

Don't know...I didn't  realize they have been completey cut out....show me something that states that...

And then there John Murtha and the unravelling of the Democrats.  When they get finished peeling the onion on corruption, lobbyists, earmarks to Government contracted companies, etc...power will swing back to the right in the mid term election.  Isn't transparency great Nancy?  How do you like having people look at the numbers?  The Republicans went through their cleansing a few years back  and they are not completely clean to be sure, but the Demos  are feeling some heat.  Wait til it gets turned up a notch or two.
Halliburton??...LOL!!



Since: Feb 18, 2008
Posted on: June 9, 2009 12:05 pm
 

While Obama picked his brackets the media slept

What is going on today with GM.....just like I told Smorgie before...this looks very much like the Airline industry 20 years ago...a better model and a more sustainable plan will come from this ...it is already forming..

And the government was wrong to jump in the airline mess back then.  We will not see any return from our GM investment any time soon.  There is  no miracle product set to unveil by GM that will corner the market and give them a competative advantage.  Even if they could come up with something, they would be out competed by the other car companies.  GM may "survive", but it will not reach it's one time high, and certainly we will not be seeing our investment returned any time in the foreseeable future. 



Since: Mar 20, 2008
Posted on: June 9, 2009 11:55 am
 

While Obama picked his brackets the media slept

WAAAAAAAAAAAYY   off  here my friend....Foreign Policy is the driver...What he is doing over seas right now is going to be the cornerstone of his re-election...if there is peace in the Middle East...and if Bin Laden is found ..which I actually think he will be ......he will be immortalized around the world..No I am not way off here.  People vote with their pocket books not foreign policy case in point last November.  Raising taxes as much as he will have to will greatly impact his re-election.  FACT.

The problem with finding bin Laden is you better liquidate him because if you try him in civil court with the ACLU coming to his defense, well....

Peace in the Middle East?   What koolaid are you drinking?  IF Iran elects a moderate that somehow takes power away from the clerics and hardliners, IF Israel doesn't take out Iran's nukes, IF Palestine settles down, IF Pakistan doesn't fall apart, IF, IF.....

How about peace on the Korean peninsula? Yeah his foreign policy and use of his Apology Weapon realy inspire me. And then there is ol' Putin biding his time.  Yeah, appeasement always fails.

Now back to my point about the economy - Obama's administration has made some very heavy handed deals that have hurt business and investors.  Not the least of which are the secured debt holders in GM and Chrysler who got destroyed in favor of the Union.  You mean to tell me that Obama is not going to have that come back to haunt him?  Yeah right.

And then there John Murtha and the unravelling of the Democrats.  When they get finished peeling the onion on corruption, lobbyists, earmarks to Government contracted companies, etc...power will swing back to the right in the mid term election.  Isn't transparency great Nancy?  How do you like having people look at the numbers?  The Republicans went through their cleansing a few years back  and they are not completely clean to be sure, but the Demos  are feeling some heat.  Wait til it gets turned up a notch or two.



Since: Oct 14, 2006
Posted on: June 9, 2009 11:33 am
 

While Obama picked his brackets the media slept

No, but many people increase activity when the advantage is shifted towards the buyer.  The market however, does not reflect the economy directly. 
You are right...I did not say it was Obama's plan that has shown a return...but it will be spun that way...be certain of it...



We are still filling massive monthly jobless claims.  Still seeing more and more companies fold.
Some of that is good...some of that not so good...


  And don't think GM is not going to be a financial anchor for the Fed.  They are far from in the clear, and will I promise you, require more tax payer dollars to keep afloat.You are right ...they will...but the funds will be driven from other sources inside of the budget....IMHO I say GM in what ever shape or form it looks like in 12 months will be ready to comeout of bankruptcy...


What is going on today with GM.....just like I told Smorgie before...this looks very much like the Airline industry 20 years ago...a better model and a more sustainable plan will come from this ...it is already forming..



Since: Oct 14, 2006
Posted on: June 9, 2009 11:08 am
 

While Obama picked his brackets the media slept

Never heard a facility that does not accept a Blue Cross PPO, but that is their right.  Under Government healthcare, how many companies do you think will continue to carry private healt coverage?  The bigger better companies will, as a copetative advantage to draw in bettere employees, but what about the smaller private industries?  Not likely.  What will happen is more people will fall into the government plan than currently projected, that is a financial garuntee.  Second, medical practitioners will be forced, I repeat, forced to accept certai n coverages and thus, will limit their care based on the level of that coverage.  And I promise you, government coverage will be less than what you have now.I agree with you 100% my friend...I didn't say I was for it....I just just commented that what we got going on now...along with the increase to companies on annual basis of 8-10% a year that inevitably that scenario you painted will be played out anyhow.



Since: Feb 18, 2008
Posted on: June 9, 2009 11:05 am
 

While Obama picked his brackets the media slept

since the
4th quater   is usually an up tick quarter historically...something good is going on...people do not just leap back into the market on good faith


No, but many people increase activity when the advantage is shifted towards the buyer.  The market however, does not reflect the economy directly.  We are still filling massive monthly jobless claims.  Still seeing more and more companies fold.  And don't think GM is not going to be a financial anchor for the Fed.  They are far from in the clear, and will I promise you, require more tax payer dollars to keep afloat.



Since: Oct 14, 2006
Posted on: June 9, 2009 11:05 am
 

While Obama picked his brackets the media slept

In case you didn't read it, the UAW is a large stakeholder in GM.  The gift from Obama was they don't have to give up any wages or benefits, only a couple of work rules and then they screwed their retireesDidn't need to read it...I already knew what the deal was.....as far as PT&EB..doens't matter really what the spin is...20,000 are lookinf or jobs...


As far as teh retiree's..you are right..they got screwed....the job bank is a major culprit of sucking the life out of that revenue pool..



Since: Feb 18, 2008
Posted on: June 9, 2009 11:02 am
 

While Obama picked his brackets the media slept

Or go to an urgent care...who now has the ability to pick and chose what insurance carrier they will accept....and throw you out in the street even if you ar sick as a dog...BTW ..Just happened to me...And I have Blue Cross Blue Shield..Carefirst.PPO..the best....

Never heard a facility that does not accept a Blue Cross PPO, but that is their right.  Under Government healthcare, how many companies do you think will continue to carry private healt coverage?  The bigger better companies will, as a copetative advantage to draw in bettere employees, but what about the smaller private industries?  Not likely.  What will happen is more people will fall into the government plan than currently projected, that is a financial garuntee.  Second, medical practitioners will be forced, I repeat, forced to accept certai n coverages and thus, will limit their care based on the level of that coverage.  And I promise you, government coverage will be less than what you have now.


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