Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

Health care:surely the President wouldn't break a promise?

July 18, 2009

The government that brought us profitable and money-saving innovations like Fannie Mae, Freddie Mac, Amtrak and the Postal Service now is going to try its hand at health insurance. It is so confident in the savings that will result that it is imposing several big honking tax increases to pay for them:

-An increase in the top individual marginal rate from the current 35% to 45%;
-An increase in the top rate on dividends and capital gains from the current 15% to 25.4%;

As Greg Mankiw notes, it's puzzling that they are bothering, as President Obama promised to not increase rates above the 39.6 percent of the Clinton era. Surely they don't believe he was lying?

One item in this Hooverite increase in taxes in a recession jumps out: this "Health Care Surcharge" is only expected to raise $544 billion over 10 years. In real life, of course, it will raise much less, while the costs of the programs will be much higer. Anybody who thinks only "the rich" will pay for this debacle is badly deluded.

The TaxProf has an excellent roundup.

Tags: Big honking tax increase.Obama Tax Policy.

      Bookmark: del.icio.us • Digg • reddit