Yellow PagesWASHINGTON – U.S. Senator Orrin Hatch (R-Utah), a member of the Senate Finance Committee, released an analysis by former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin today that found that 25 percent of people earning $200,000 a year would see their taxes rise under the Senate health care bill.
“This analysis makes clear that the Administration’s assertions that its health care proposal will not raise taxes on people making under $200,000 a year are simply not true,” said Hatch. “At a time when people are struggling and we are trying to shore up our fragile economy, we should not be punishing middle-class families with higher taxes.”
On the campaign trail, President Obama pledged that no individual earning under $200,000, and no family making less than $250,000 would see their taxes go up.
Holtz-Eakin found, through an analysis of data by the congressional Joint Committee on Taxation, that:
Only about 7 percent of Americans would actually receive a government subsidy to help pay for mandatory health insurance.
25 percent of those earning under $200,000 a year would see their taxes rise. In other words, for every one family that would receive the government subsidy, three middle-class families would pay higher taxes.
93 percent of Americans would NOT be eligible for a tax benefit under the bill.
Below and attached is the complete analysis by Doug Holtz-Eakin provided to Senator Hatch:
In the midst of all the rhetoric about the evil insurance companies from the Democratic side of the aisle to justify the passage of this $2.5 trillion health care bill and all the rhetoric about government takeover from the Republican side of the aisle, I want to draw your attention to some recent facts regarding the impact of this bill. The computations are based on data provided by the Joint Committee on Taxation as contained in a recent American Action Forum health care brief.
Only about 7 percent of Americans would actually receive a government subsidy to help pay for mandatory health insurance.
25 percent of those earning under $200,000 a year would see their taxes rise. In other words, for every one family that would receive the government subsidy, three middle-class families would pay higher taxes. That stands in stark contrast with the President’s pledge that anyone earning under $250,000 would not see their taxes increase.
93 percent of Americans would NOT be eligible for a tax benefit under the bill.
Moreover, 52 percent of all Americans will see their taxes rise including small business owners. This tax increase would take place even after taking the government subsidy into account.
So what does this all mean? Simply put, under this bill fewer and fewer Americans will continue to support the needs of an ever-growing majority. Furthermore, these tax hikes come as our nation struggles to recover from one of the most severe economic downturns since World War II. For employers who may want to hire, they are frozen because of the threat of more taxes and regulation that will eat up money they could use to put people back to work.
I want to emphasize as well the budgetary impact of this bill. We are at a historic crossroads as a nation. According to the recent 10-year outlook by the Congressional Budget Office (CBO), President Obama’s policies would add $8.5 trillion to our already sky-high national debt. The sobering report also confirmed our record deficit of $1.5 trillion this year along with a dire prediction of deficits rapidly increasing after 2015. And this all before the passage of this trillion-dollar health care bill.
Citing numbers from the non-partisan Congressional Budget Office (CBO), Democrats say that this bill would reduce the deficit by roughly $100 billion over the next 10 years. Just last week, Nancy Ann DeParle, the White House Director for Health Policy, and Peter Orszag, the Director of the Office of Management and Budget, argued in a Washington Post op-ed that, “[t]he president's plan …more than meets the president's commitments that health-insurance reform not add a dime to the deficit and that it contain measures to reduce the growth rate of health-care costs over time.” But the only way to make the numbers work is through budgetary gimmicks.
But as a former CBO Director, it’s important to understand that CBO only scores the legislation it’s given – no matter how unrealistic. So, for example, if the bill says that the Administration will defer the Cadillac plan tax to 2018, which was evidently a concession to the powerful labor unions, then CBO has take that assumption at face value when they score the bill and its deficit impact.
Furthermore, Mr. Orszag and Ms. Deparle cite pay-as-you-go budget rules – requiring that any new entitlement spending be offset – as a mechanism to make sure that health care reform is fully paid for in the future. Once again, this assumption fails the test of reality. Just this week, the Senate ignored pay-go for a portion of a bill for unemployment benefits. And last year, Democrats chose to exempt a Medicare payment fix for doctors from pay-go. Whether they should or should not be subjected to these budget rules is irrelevant. The point is that the Administration’s record is hardly encouraging.
