So, Obama asks and Congress obeys! Here we have another 1,000 plus page bill winding its way through the House of which I am sure almost no member of Congress has read. Just get it done before anyone knows what’s going on. Make it happen fast! That appears to be the logic behind the President’s legislative agenda. If you get the ball rolling, pass it and sign it before anyone reads it.
We all know how much good the February stimulus bill did; none. If anyone had a chance to analyze it and the pork associated with it, it would have never passed. It looks like “Cap and Trade” may be dead in the Senate. People must have read it and told their Senators to make sure it dies. I guess things did not move fast enough for the Administration.
Now, let us look at the health care bill. The rich are in for it again per the Democrats. The Democrats are proposing that the top income earners will see their income taxes increase in order to pay the approximate one trillion dollars that this bill will cost our future generations. The top tax rate would go up by 5.4%. This would be on couples earning more than one million dollars. The smallest increase would be on couples earning more than $350,000. They would get an additional tax bill of one percent of their income.
If you analyze those tax raises carefully, you will see that President Obama is now breaking one of his most vocal campaign promises. If you remember way back to last November, he preached to his loyal followers that “no one making less than $250,000 would get a tax increase.” Well if you do the math, an individual earning $175,000 will get a tax increase of one percent. You may ask how I came to this figure. Well, if couples earning $350,000 are getting taxed at a higher rate, an individual (single person) would be taxed at $175,000. That unfortunately is the way the tax code works.
The bill additionally states that any individual without medical insurance would be forced to pay a penalty of 2.5 percent of his/her income up to a cap of the cost of medical insurance. In Southern California medical insurance for an individual runs approximately $6,000 per year. So, someone making $250,000 per year would be paying $6,750 per year more in taxes. How did I get to this figure? Let’s not forget that one percent tax increase.
However, there is another break of the ultimate campaign promise here. The middle class wage earner making $50,000 per year would be penalized $1,250. You can call it a penalty or anything you want, but it is a tax. So, now the anointed one is proposing to raise taxes on the real middle class. This is not someone making $250,000 per year. It is not even close. To someone making $50,000 per year, $1,250 per year in additional taxes is a real blow. And, on top of it, the poor soul still would not have health insurance.
But, that not the real shot below the belt which is the penalty on employers for not providing health insurance. This proposed penalty is 8% of a worker’s wages. That means every company that does not provide health insurance will pay a penalty to the US Government in the amount of $8,000 per $100,000 of payroll.
Talk about messing with the middle class and the employment rates. Again, Obama and his economic geniuses are killing employment in this country. Do you think any business is going to absorb this cost?
If the company chooses to give health insurance, they will be forced to pay approximately $6,000 per employee in Southern California. This $6,000 would come from only a few places; one, the employee’s pocket, two, the consumer’s pocket, or, three from employees losing their jobs to pay for this mess. Companies are working at small enough margins as it is now with the economy in the worst economic crisis since the Great Depression. They are not going to absorb this kind of loss. Of course, the proponents of the bill are saying that there will be a small business exception to the requirements and penalties. How that will be defined in the final bill is anybody’s guess?
So, who will benefit from this plan? You may say the poor and uninsured. The poor already have access to health care. They just show up at emergency rooms and get treated or they qualify for Medicaid. So, it’s not them. It’s not the middle class. We already looked at that. It’s not the rich, since they are paying for it. It’s not the business owners since they are getting burned again. Who? NO ONE.
Yes, a large portion of people who are not insured will be under this plan. That is true. But, they will be paying for it either in the form of higher taxes or lower wages. Some people making less than $250,000 per year cannot afford that. In fact, as I said above, the poor soul making $50,000 per year cannot afford to lose $1,250.
To put it simply, this plan is a joke and should be killed this time before it even gets to the Senate. So, get your pens out and start writing your Congressmen again. If enough people complain about this crap going on in Congress, it might actually stop.
As an aside, I had lunch today with a fellow entertainment industry Republican, Michael Mandaville, and he had an interesting analysis of this health care bill. In the movie industry, people are hired usually for short periods of time during the course of a production of a film. On a union picture, most people have insurance, but not all. On a non-union film, almost no one has health insurance.
Under this proposed health care plan, a catastrophe will happen to the entertainment industry. Let’s say for arguments sake that 30 crew members on a film have no insurance. These 30 people will work an average of approximately three months on a film. If you figure that the average cost of health insurance is $500 per month, the budget of the film will go up $15,000 per month to cover these employees. Over the course of three months, that is an additional $45,000 added to the cost of making the movie. Say goodbye to film making in the United States. Whatever is still here, will be gone. (And, this whole analysis is based upon low budget movies. On a high budget movie, you could be talking an additional cost in the hundreds of thousands of dollars).
Well, that’s about if for now. Until next week . . . . . .
© 2009 Frank T. DeMartini. Permission to copy will be freely given upon request.