Thursday, October 08, 2009

Congressional Democrat Health Care Overhaul Roundup; Now Including Windfall Profits Taxes On Insurers?

Sen. Max Baucus' health care proposal hasn't been reduced to legislation which is clear from the CBO and JCT treatment (both noting that there is no legislation based on the Baucus version), and that abomination likely will be twice as expensive as the CBO claims. Then there are the taxes imposed to make it work. The Baucus plan would result in marginal tax rates as high as 70%.

The CBO and JCT also note that the taxes imposed under the proposal kick in three years before the benefits start (10 years of revenues, 7 years of benefit, in the 10 year period being studied). Any shortfall in revenues in the first three years will compound shortfalls later and result in an ever more unbalanced situation.

With all these shortfalls creeping into every bill, no matter how expensive and how much Democrats have tried to hide the true costs, the need to raise revenue is all too necessary under all these plans.

Democrat Speaker Nancy Pelosi is now urging Rep. Charles Rangel (D-NY/tax cheat) to consider a windfall profits tax on health insurance companies, in lieu of either the surtax on wealthy taxpayers currently contained in HR 3200 or the tax on high value plans proposed by Baucus.

Never mind that the windfall profits tax will never provide the kind of revenue necessary to make the plan work. Never mind that a windfall profits tax will be passed on to the consumer because the entities involved will not absorb the cost but rather pass it on to their users.

Never mind that windfall profits taxes are a mighty difficult thing to do when the profits in the health care insurance sector are roughly 3%, or lower than what you'd find in the technology sector. This is razor thin profits, but Pelosi and Democrats know that raising taxes on most Americans is a nonstarter. They have to find a way to increase those taxes by any means necessary, even a back-door tax such as through a windfall profits tax.

If 3% is considered a windfall profit, how long before these same redistributionists look at the other companies on the list for windfall profits? When the taxes hit, the profits will disappear altogether, along with the services provided.

The Hill has posted a story relating to the windfall profits tax.

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