Tick… tick… tick… What's that sound you are hearing?
It's the sound of the tax time bombs that were put in place in the dead of night on Sunday when Democratic leadership in the House of Representatives rammed through so called health care "reform."
I say "rammed through" because it certainly wasn’t bipartisan. Not a single Republican voted for it. It wasn't even truly partisan, since even a number of Democrats voted against it. A plurality within the majority forced it to happen.
It wasn't bicameral, either. The bill the House voted on was one the Senate approved in December -- again, without a single Republican vote. But that same bill wouldn't get through the Senate now, since Democrats no longer control a filibuster-proof super-majority. So in an important sense it is true that this bill was not truly approved by both houses of Congress. And yet the president signed it on Tuesday.
I doubt it will do much for health care in this country. But that's something reasonable people could debate. What there can be debate about is the part of this that affects the economy and the stock market -- the taxes. As taxation expert Howard Gleckman of the non-partisan Tax Policy Center wrote on Monday, "I have never quite seen a law so full of powerful tax bombs attached to delayed fuses."
Before I start telling you about all the new taxes you're going to be paying -- directly and indirectly -- let's start by noting that, all else equal, higher taxes are not good for the economy. Taxes are disincentives to work and to invest. So when taxes go up, people will to some extent work less, and invest less. That simply has to be bad for the economy. There's really no disagreement about that among reasonable people.
What taxes are we talking about here, exactly? The nonpartisan Tax Foundation has a nice list of all of them -- if you have an especially strong stomach, click here to see them all.
Starting on July 1, there will be a 10% tax on all indoor tanning services. Why pick on that particular tiny slice of the U.S. economy? I have no idea. For some reason, it was chosen -- or rather, its customers were chosen -- to be the victims this time.
Is this such a terrible catastrophe for the economy? I suppose not, but if government can impose an arbitrary tax on this particular category of small business, then maybe your small business will be next. The uncertainty of it will keep some unknown number of people from starting small businesses.
Who cares? You should. Historically, small businesses have created more than half the new jobs in this country year in and year out. And in case you hadn't noticed -- as apparently Congress had not -- the unemployment rate is already 9.7%.
Next year the pharmaceutical industry gets hit with $2.5 billion in new taxes, with the amount rising to $4.1 billion by 2018, and the falling back to $2.8 billion after that. Huh? Why these particular numbers? Who knows. Some genius in the Senate just pulled them out of his hat (or elsewhere). The point is that the companies these taxes are being levied upon are the ones who are supposed to deliver the miracle drugs that save lives -- maybe yours. Or maybe not.
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Health Care 'Change' Will Leave You With Less: Maybe -- and spoken like someone who never plans to be "rich." Thos... http://bit.ly/ayabl6
RT @smartmoney: Health Care 'Change' Will Leave You With Less http://bit.ly/cWChrg
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