By - September 8, 2011

Obama the Tax Sow

President Obama Tax SowWith last night’s debate (aka snore-fest except for Herman Cain) now behind us, we are left wondering who will actually be there to stop the great Tax Sow, President Obama and the Democrats.

We are in a time when job growth is nil, people are uncertain about their futures and businesses are sitting on the sidelines, hands on wallets, not wanting to infuse capitol that may be wasted in the short term and the long term.  This, of course, is what is at the core the problem:  America is not a confident country right now.  Fat, with cash, but not confident.

We are a country that needs a Ronald Reagan, but are looking at a bunch of Republican Candidates (again, with Herman Cain being the exception) that are about as inspirational as Jimmy Carter, Calvin Coolidge and Mr. McFeely (the Mail man from Mr. Rogers Neighborhood….think back a few years).

With that being said, I thought it would be good to see, in black and white, the myriad of tax traps we now face, not only in at the federal, state and local level, but the hidden taxes, designed to be the sappers of our money from 2014 forward, when Obama care takes us into being a socialist country.  We’ve dropped to 5th in the world…maybe Obama, chief Tax Sow, can get us to twentieth in two short years.

Here are tax numbers that are feeding our increasingly fat Tax Sow President and his administration, the piglets:

1. A 156 percent increase in the federal excise tax on tobacco: On February 4, 2009, just sixteen days into his Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents per pack.  The median income of smokers is just over $36,000 per year.  Maybe $36,000 is the new rich in the Obama eyes.

2. Obama care Individual Mandate Excise Tax (takes effect in Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax.  We get to pay even if we choose not to pick crappy insurance.

3. Obama care Employer Mandate Tax (takes effect Jan. 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees.  If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).

You need not look any further than this one to know why small and medium sized businesses are not employing any new people with real jobs.  The simple math is that these businesses must be prepared to pay at least $100,000 (minimum in penalties) for not having health insurance.  This will employ at least one IRS Agent!

4. Obama care Surtax on Investment Income (Tax hike of $123 billion/takes effect Jan. 2013):  Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single).

5. Obama care Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/takes effect Jan. 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed.
If you have really good insurance, you now will pay 40% more for it.  This is your reward for being responsible.
6.  Obama care Hike in Medicare Payroll Tax (Tax hike of $86.8 bil/takes effect Jan. 2013)
7. Obama care Medicine Cabinet Tax (Tax hike of $5 bil/took effect Jan. 2011):  Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
This will effectively end a whole line of insurance products, which have helped a lot of people, in order to keep feeding the fat Tax Sows that now occupy Washington.
8. Obama care HSA Withdrawal Tax Hike (Tax hike of $1.4 bil/took effect Jan. 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.  So, if you need money from your HSA for an emergency, you will give 10% to the government trough.  So much for Michelle Obama’s diet plan!
9. Obama care Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Tax hike of $13 bil/takes effect Jan. 2013):  Imposes cap on FSAs of $2500 (now unlimited).   Indexed to inflation after 2013.
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous:  parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
Obama is the Education President….except when it comes to feeding his endless appetite.
10. Obama care Tax on Medical Device Manufacturers (Tax hike of $20 bil/takes effect Jan. 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100.

Oink…Oink…I’m starting to run out of adjectives.  If only this list of taxes was stopping…on we go!
11. Obama care “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 bil/takes effect Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016

If you get sick and your income goes down, you still get to pay more.  Down at the Farm, the tax sows are still able to enjoy a months vacation at Martha’s Vineyard.  Good luck with getting sick!
12. Obama care Tax on Indoor Tanning Services (Tax hike of $2.7 billion/took effect July 2010):  New 10 percent excise tax on Americans using indoor tanning salons.  I don’t use these…maybe I should.  If you tan ten times per year, you are now giving one whole visit per year to the government.
13. Obama care elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013)  Heaven forbid if the private sector can help.
14. Obama care Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 bil/took effect Jan. 1 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services.

I thought that the government and the insurance companies were supposed to work together.  Blue Cross/Blue Shield is now the “runt” of the litter.
15. Obama care Excise Tax on Charitable Hospitals (Min$/took effect immediately): $50,000 per hospital if they fail to meet new “community health assessment needs,” “financial assistance,” and “billing and collection” rules set by HHS
Now the government is telling hospitals what their community health needs are.
16. Obama care Tax on Innovator Drug Companies ( Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year.
Let’s go ahead and be innovative so that Obama and the other Pigs pork waist lines can get even fatter!
17. Obama care Tax on Health Insurers (Tax hike of $60.1 bil/takes effect Jan. 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits

Why would you keep being in the Health Insurance game when you are just going to hand the government more money?  So much for choice long term!
18. Obama care $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6 bil/takes effect Jan 2013).

No executive worth their salt is going to stay in this game anyway.  I wonder….should we limit Obama’s Book Sales income in the process?  He has earned several million dollars.  Let’s limit it to $500,000 per year and he can turn the rest over to the government.  Don’t wait for the Tax Sow to go on a diet himself now!

19. Obama care Employer Reporting of Insurance on W-2 ($min/takes effect Jan. 2012):  Preamble to taxing health benefits on individual tax returns.

20. Obama care “Black liquor” tax hike (Tax hike of $23.6 billion/took effect immediately).  This is a tax increase on a type of bio-fuel.  Now, the Tax Sow is eating the cattle’s food too!
21. Obama care Codification of the “economic substance doctrine” (Tax hike of $4.5 billion/took effect immediately).  This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed.

They saved the best for last.  Now, they can have a provision in the tax code that you as a tax payer takes advantage of and they can disallow it.  The government’s way of sticking their tongue out at you.
I pulled these new tax provisions off of the Americans for Tax Reform website.  They were classy enough not to call President Obama a Tax Sow…we at the Red State Report are not above calling Our Commander in Chief a one ton hog.
Our Republican Candidates need to have this kind of fire under their belly.  That is what I like so much about Herman Cain.  I know he does not have a chance of getting the nomination; that’s a two horse race for sure.  Here is a very intelligent African American, both academically and in business, who knows what it’s like to guide a company in good times and bad and is not afraid to speak his mind, even as large numbers of his own ethnicity are against him.
I hope that one of the two current candidates (Romney or Perry) catch this fire, own up to their mistakes in the past as quasi conservatives and get down to the task of taking our current tax sow in chief and get him off of the farm for good!

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