Obama Signs Business-Hurting, Tax Pledge-Breaking Health Care Bill into Law
After cheerleading and campaigning on the issue for months, the network news media gleefully reported the signing of the $938 billion monumental health care “reform” bill on March 23.
At the signing, President Barack Obama emphasized “tax credits” in the bill to help roughly “4 million small-business men and women, to help them cover the cost of insurance for their employees.”
The network evening news programs on ABC, CBS and NBC have also mentioned those “tax breaks” for small businesses in at least four stories in the past month.
ABC’s Diane Sawyer told viewers March 19 that “the day he signs this bill, small businesses will get tax credits to spur more coverage of more employees.” She didn’t mention any of the tax increases on individuals or businesses.
During that time the same network programs aired only one story explaining that the so-called “Medicare tax” would apply to investment income for the first time in history. NBC’s Kelly O’Donnell said that tax and others “fuel” Republican opposition to the health care bill, but didn’t explain the economic justification for their concern.
Even in stories mentioning tax hikes in the bill, the networks left out economists and businesspeople who could have warned of economic destruction and potential job losses. They also completely ignored Obama’s violation of his “firm pledge” not to raise taxes on the middle-class.
Certain tax increases in the health care bill have experts very worried about the economy, stock market and jobs. One of those worrisome increases is an expansion of the Medicare payroll tax to “unearned income” for the very first time.
What is unearned income? “That's what savings and investment income are called in
Destructive because the tax will now apply to interest, dividends, capital gains, annuities, royalties and rents for individuals making more than $200,000 and couples making more than $250,000.
The 3.8 percent “Medicare tax” alone is supposed to bring in $210 billion in revenue in 10 years – a 31 percent jump from Obama’s 2.9 percent Medicare tax proposal from one month earlier.
Ryan Ellis, director of tax policy at American’s for Tax Reform, told the Business & Media Institute it is a mistake to call this a “Medicare tax.” “It has only the faintest of connections to Medicare, no matter what they want to call it.”
Ellis also explained that the “most destructive” element of the tax increase is the hike on capital gains.
“It would rise from 15 percent today, to 20 percent next year, to 24 percent in 2013,” Ellis said. “That's a 60 percent increase in that rate. The stock market will have to price in this lower after-tax rate of return on stocks. That will lower the value of everyone's 401(k) and IRA. Even if you never pay the capital gains tax, you're going to get hit by this in a big way.”
This tax will also hurt the struggling economy, according to the Wall Street Journal which explained the economic impact of an investment tax when the original 2.9 percent increase was proposed in February.
This “is another tax on job creation, though Democrats claim they want more jobs. The devious 2.9% hike on investment income will raise the cost of capital, though Democrats claim to want more capital investment. Sometimes we wonder if Democrats even listen to their own rhetoric, or if they assume voters are too dumb to notice their contradictions,” the Journal warned on Feb. 24.
Taxing Businesses Could Cost Jobs
In one month there were at least 16 mentions of tax increases within the health care bill on the networks, but most were passing mentions that paid no attention to the economic consequences. CBS’s Chip Reid noted Feb. 22 that the tax hikes would be a “tough sell” politically, but didn’t include any economic criticism.
Despite the network news media’s lack of outrage about the “billions in new taxes” required to pay for the immense bill, businesses have warned that the hikes will hurt their companies and employees.
Caterpillar said on March 19 that the health care bill would cost it $100 million in just the first year. Fox Business reported that Gregory Folley, vice president and chief human resources officer of Caterpillar, wrote a letter to Speaker Pelosi and House Republican Leader John Boehner saying: "We are disappointed that efforts at reform have not addressed the cost concerns we've raised throughout the year.”
On “Behar” March 22, business tycoon Donald Trump mentioned what the bill may do to a friend of his who runs a large company: “And it’s going to cost his company over $200 million a year to do this. Now, again, you go back to the humanitarian side, Joy, but at the same time this company may not be around any longer because of the cost.”
The Chamber of Commerce looked at the bigger picture, telling Fox Business “the new law will hurt job creation and increase taxes on small businesses, and do little to restrain [health care] costs.”
In 2009, when Obama’s budget proposal including plans to raise taxes on dividends and capitals gains the Heritage Foundation said it would hurt senior citizens by depressing the value of stocks held in many retirement savings plans.
The health care bill includes a 10 percent tax on indoor tanning and a 2.3 percent tax on medical device manufacturers. The International Smart Tan Network said the tax unfairly targets women (who are mostly those who choose to tan and who own tanning salons) and small businesses and “could lead to more than 1,000 tanning business closures in 2010.
The tax on medical devices will hurt businesses like Zoll Medical Corporation which employs 1,600 people in the
"We believe that the tax will cost us somewhere between $5 million and $10 million a year," Richard Packer, Zoll's chairman and chief executive officer told
Violating His Pledge
In the month leading up to the passage of health care reform, the networks continued to ignore Obama’s blatant violation of his own taxpayer pledge.
In
But tax policy group ATR said that the health care bill Obama signed March 23 was a huge breach of that promise.
ATR specifically detailed seven provisions that will hit the middle class including a tanning bed tax, a cap on itemized medical deductions, the employer mandate and individual mandate taxes and the “medicine cabinet tax” preventing people from using HSAs to purchase over-the-counter medication.
One week before the bill signing, another taxpayer group, National Taxpayer’s
Yet, not a single one of the 14 network stories mentioning tax increases called Obama to account for this broken promise.
Despite giving Obama credit during the campaign for promising not to raise taxes on the middle class, the network news media ignored his intentions to break it when he endorsed the House health care bill in November 2009.
