Democrats Contemplate Massive Tax Increase to Pay for Obama's Healthcare Plan

By Peter Roff, Thomas Jefferson Street blog

During his victorious presidential run, Barack Obama promised he would not raise taxes on the middle class. "Under my plan," Obama told a New Hampshire gathering, "no family making less than $250,000.00 a year will see any form of tax increase."

Somebody wasn't paying attention.

Democrats in the House of Representatives are now contemplating massive tax increases in order to raise some of the revenues they need to fund Obama plan's for a government takeover of the U.S. healthcare system.

According to published reports, tax increases under consideration include: 

• A 10 cents per can tax on soda and other sugary drinks
• A 2 percent increase on income taxes for single taxpayers earning more than $200,000 per year
• A 2 percent increase on income taxes for households earning more than $250,000 per year
• A new employer payroll tax targeting 3 percent of employers' health care expenditures
• Taxing certain employer-provided health insurance benefits
• Higher taxes on alcohol
• An increase in the Medicare payroll tax
• A European-style Value Added Tax or VAT of 1.5 percent or more 

Obama's promise was already broken when he signed into law an increase in the federal excise tax on cigarettes. What the Democrats are looking to do on healthcare will shatter it. The Democrats' "Kennedy Bill"—the term used to refer to the primary Senate proposal—plan doesn't even provide the universal coverage they've promised. Yet, while leaving nearly one-third of those currently without insurance uncovered, it will cost the American taxpayers at least $1.6 trillion over ten years; some estimates have the cost as high as $4 trillion.

As Senate Republican Leader Mitch McConnell, R-Ky., said last week, "These are staggering amounts of money for taxpayers to contemplate, which is why it's troubling to a lot of people when we see committee members in such a rush to pass this legislation before the Congressional Budget Office even has a chance to fully estimate its cost. On something as important to the American people as health care reform, cost and effectiveness should be a higher priority than speed."

The Congressional healthcare stampede, like the rush to pass the stimulus package, is leaving a lot of unanswered questions in its wake—questions that can't be answered, truthfully, in one night of primetime programming on ABC. Congress needs to slow down and to let the American people know what they're doing. After all, it is the people who must pay the bill.

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