To be called a tax or not to be called a tax, that is the question (in my Shakespearen voice) that the Obama administration now faces in the aftermath of the Supreme Court’s landmark decision on June 28, 2012. Unless you’ve been hiding under a rock, you should have heard by now that the high court, by a 5 to 4 majority, rejected the argument that requiring Americans who aren’t covered by insurance at work to buy insurance or face a fine was an unconstitutional expansion of federal power.
With the decision in, there are at least two questions you should ask yourself. The first is do you feel the government should have the right to mandate health insurance coverage for you as an individual? And, the second is will this ruling be a benefit or a burden for you? Insurance needs aside, I can tell you that I don’t feel the government should be allowed to mandate that I purchase anything yet alone purchase insurance. Since when did the government become the deciding factor as to what is in my best interest? Judging by the fruit or lack thereof in their ability to determine what’s in their best interest yet alone the constituents they serve, I have no confidence in them determining what’s in my best interest. It’s almost as bad as New York Mayor Bloomberg’s ban on the sale of greater than 16 oz drinks. These are all small signs of the end of capitalism as we know it when we keep giving the government more and more powers to control everything we do. Soon it will be a democracy for the “controlled robots” by the “controlling congress” as opposed to a government for the people by the people. The sign outside the borders might as well read “Welcome to the United Socialist States of America!”
Regardless of your opinions on the matter, this ruling is a direct contrast to a 2009 interview Barack participated in when the reform bill was doing nothing more than sitting on capitol hill, hoping to be a law one day. ABC News correspondent George Stephanopolous sat down with Obama and asked directly why he didn’t consider this motion a tax.
[ Source: Total Frat Move and Politico.com ]
Chief Justice John Roberts, a remnant judge from the Bush era, crossed party lines to suggest that the reform was not an individual mandate, but an additional tax and should be treated as such. When one takes a step back and realizes that because of the law, anyone who doesn’t get health insurance would owe 1% of their income to the IRS, it sounds an awful lot like a new tax to anyone with a semblance of common sense. Now while I’m a Certified Public Accountant and have worked in Tax and Financial Planning for the past 16 years, you don’t have to work in my field to realize that this is a new tax.
So, despite past promises and assurances, Obama has failed to be clear with the American public yet again. Whether you agree with Obamacare or not, by imposing a new tax on the American people without giving them an appropriate description, Obama has either A) purposely misled us, or B) doesn’t know what the heck he’s talking about. Either way, I think you should be a bit concerned.
You know I saw a couple of pictures on Facebook that were indicative of probably the President’s sentiments on this issue. The first one was a picture of him in a board room with what seemed like cabinet members laughing their butts off with a caption that said:
The second one was of him in what looked like perhaps his office with a very serious look on his face and one of his classic poses…you know the one where he has his arms crossed with one arm towards his face with this very serious look and a caption that read:
Don’t be surprised if Obama whips out another can of executive privilege from his oval office kitchen cabinet to deal with this incident.
You know while we may not be able to agree on the merits of Obamacare, we can at least agree that it’s a tax. So let’s talk about how this tax hurts your ability to win the money game:
- On January 1, 2013, the Medicare tax will go up by 0.9% for individuals earning over $200,000 ($250,000 for joint filers, $125,000 for married individuals filing separately).
- Also on January 1, there will be a new “Unearned Income Medicare Contribution” of 3.8% on investment income of those earning more than $200,000 ($250,000 for joint filers).
- Beginning January 1, 2014, there will be a new $2,500 limit on tax-free contributions to flexible spending accounts, and employers with more than 50 employees will face a penalty of $2,000 per employee for not offering health insurance to full-time employees.
- Finally, the threshold for deducting medical and dental expenses rises from 7.5% of adjusted gross income to 10%. This will make these expenses even harder to deduct without help from advanced strategies like Health Savings Accounts or Medical Expense Reimbursement Plans.
In concluding I can’t help but say: Now that we all know it’s a tax, how do you think the President and his Henchmen…I mean cabinet members will lie their way out of this one? Are you comfortable with the President mandating health insurance for you and will it be a benefit or a burden for you? Chew on that for a while and in another blog entry, I’ll discuss an “April fools trick” the President played on the American people with the passage of his Affordable Care Act aka Obamacare.