HR 3962: My First Glance

Just when you thought the health care debate couldn’t get any more confusing…

Earlier today, Speaker of the House, Nanny State Nancy Pelosi (D-CA) introduced the “Affordable Health Care for America Act“, or House Resolution 3962.

HR3962 is a whopping 1,990 pages and with the estimated cost of nearly $900 billion, it amounts to roughly $2.4 million per word.

I read on Politico that the word ‘doctor’ does not appear in the bill, so I checked myself, and they are correct. The only two reference to ‘doctoral degrees’ are in reference to marriage family therapists and mental health counselors. Interesting yes?

When Nancy Pelosi and the gang introduced the new public health care bill including the “public” option in a public place, the announcement was closed to the public.

So much for Nancy Pelosi’s promise, huh?

This leadership team will create the most honest, most open, and most ethical Congress in history.

Not including the two times it appears in the table of contents, the word ‘abortion’ appears in the bill 23 times, and yes, the bill explicitly allows federal funding of abortions through the public option as well as private insurance plans.

The term “death panel” did not make it into this version of health care reform but the section relating to end-of-life care remains in the bill.

HR3962 imposes 13, yes thirteen, new taxes. From the American’s For Tax Reform website:

Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000). Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).

Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.

Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

In addition to imposing all those nice luxurious new taxes, HR3962 will also require federal regulation of vending machines. Yes, vending machines. In Section 2572, on pages 151-1516, the bill states,

(viii) VENDING MACHINES.—In the case of an article of food sold from a vending machine that —

(I) does not permit a prospective purchaser to examine the Nutrition Facts Panel before purchasing the article or does not other wise provide visible nutrition information at the point of purchase; and

(II) is operated by a person who is engaged in the business of owning or operating 20 or more vending machines, the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article.

There is no word if cameras will be installed, or if social security numbers will be required in order to make a purchase. With the level of federal government intrustion into our lives, it only makes sense to think this is what they have in mind, eventually. The government has to receive some kind of record about the people who are eating the unhealthy food from those machines, because they need to know when to start rationing your health care if you do.

Oh shut up, you know it’s coming.

The Congressional Budget Office puts the initial cost of this version of health care reform at $1.055 trillion. Of course, this is above and beyond the self-imposed limit put in place by President Obama, but we all know he hasn’t been to stringent about rules and keeping his word anyway, so I’m sure that’s just a rhetorical number.

This past summer millions of Americans raised their voices in opposition to government run health care. Apparently, Nancy Pelosi and her fellow Democrats did not get the message. An overwhelming number of Americans want health care reform but they want reform that lowers the cost of health care and makes it more available. They don’t want health care reform that will raise taxes, raise health care costs, add to our national debt, place additional financial burdens on their family, parents, children, and their own small businesses.

I’ll be posting more about this bill over the next couple days. It’s a given that they want to begin debate on this bill next week, and there is no way I can cover all 1,990 pages over the weekend, but I will do my best to cover as much as possible before the debate begins.

A people that values its privileges above its principles soon loses both.
Dwight D. Eisenhower

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