Friday, April 16, 2010

Obama Tax Hikes...So Far

Yesterday, President Obama made the following comment in Miami about the Tea Party rallies on Tax Day:

"In all, we passed 25 different tax cuts last year. And one thing we haven't done is raise income taxes on families making less than $250,000 a year -- another promise that we kept," he told supporters at the Arsht Center for the Performing Arts. "So I've been a little amused over the last couple of days where people have been having these rallies about taxes. You would think they would be saying thank you."

You know what? You're right, Mr. President. We should be thanking you. Not for keeping your actual promise never to raise "any form" of taxes on families making less than $250,000 (as opposed to the stripped-down promise you make above).

No, taxpayers should instead be "thanking" you for the following tax hikes you have signed into law (so far):

• a hike in the tobacco tax
• a new tax on individuls not purchasing and employers not providing "qualifying" health insurance
• a 40% excise tax on high-cost health insurance plans
• a new "medicine cabinet tax" on over-the-counter purchases from HSAs, FSAs, and HRAs
• increasing the non-medical early withdrawal HSA penalty from 10 to 20 percent
• a "special-needs kids" tax (capping FSA contributions at $2500)
• an increase in the top Medicare payroll tax rate from 2.9 to 3.8 percent (in so doing raising the top marginal tax rate on labor from 37.9 to 43.4 percent)
• a hike in the capital gains rate from 15 to 23.8 percent
• a hike in the dividends tax rate from 15 to 43.4 percent
• a hike in the "other" investment tax rate from 35 to 43.4 percent
• an increase in the "reduction of the deduction" for medical expenses from 7.5 to 10 percent of AGI
• new annual taxes on health insurance companies, innovator drug companies, and medical device manufacturers--which will make
• a 10% excise tax for tanning salon sessions
• eliminating the deduction for employer-provided retiree Rx coverage in coordination with Medicare Part D
• creating the "economic substance doctrine," which allows the IRS to disallow perfectly-legal tax deductions it deems are only being used to reduce tax liabilities
• requiring 1099-MISC information reporting for small business payments to corporations, increasing compliance burdens for small employers

If that's not enough thanks for you, Mr. President, maybe we should also be thanking you for the new taxes that you or your advisors have proposed on top of these tax hikes:

• a European-style value-added tax (VAT)
• a "bank tax," even on financial institutions that never received a dime of bailout money or who paid their bailouts back with interest
• restoring the death tax from totally gone (this year) to either a 45 or 55 percent rate (depending whom you ask)
• a dangerous new "cap and tax" energy tax on every American family who uses energy
• raising taxes on investment partnership managers, which will result in lower profit sharing for charities, universities, and pension plans
• restoring the "Superfund" tax for trial lawyers
• repeal "LIFO accounting," which is a tax hike on every America using liquid energy sources
• imposing a whole host of international tax hikes which will drive jobs and capital offshore
So thank you, Mr. President, for all you've done for us this Tax Day week.

Ryan Ellis, EA
Tax Policy Director of ATR

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