Healthcare Blog

Hey Boomers. When clients ask me for a brief overview of Health Reform, this chart is a good example of the ultimate complexity.

Denny

Cincinnati 

Healthcare Future.pdf (887.79 kb)

Hello Fellow Boomer company owners, especially those of you who are small business owners. Our government again is increasing the tsunami of paperwork. The so-called Health Care Reform bill is requiring owners to file a 1099 form with the IRS for EVERY business transaction over $600. So you guessed it, that could be dozens to thousands. Why is this? Well, to finance the expansion of government. This must be repealed. If you are starting a new company or have an existing one, this means more cost. See advocate Congressman Lungren, below:

Lungren Fights For Small Business

His district and across the nation, introduced legislation to repeal an onerous portion of Obama

Care. The Small Business Paperwork Mandate Elimination Act will remove section 9006 of

H.R. 3590. Section 9006 would place an unprecedented burden on small business by requiring

any business that purchases more than $600 of goods or services from another business to

submit a 1099 tax from to the Internal Revenue Service. The mandate is to take effect in 2012.

"Large corporations have whole divisions to handle such transaction paperwork but for a small

business, which doesn't have the manpower, this is yet another brick on their back. Everyone

agrees that small businesses are job creators and the engine which drives the American

economy. I am dumfounded that this Administration is doing all it can to make it more difficult

for businesses to succeed rather than doing all it can to help them grow," Lungren said.

The new tax filing mandate is one of several funding streams to pay for health care and is

reported to raise $17 billion.

"At a time when our economy needs small businesses to help our country grow out of this

recession, saddling them with expensive new requirements and paperwork burdens will only

further hamper their ability to aid in our economic recovery," said Susan Eckerly, Senior Vice

President of the National Federation of Independent Business (NFIB)

"We should be working on reining in the cost of health care, not imposing a new government

mandate to squeeze every drop of revenue out of small business," Lungren concluded.

###

Congressman Dan Lungren serves as Ranking Member on the House Administration

Committee in addition to serving on the Judiciary and Homeland Security Committees

 

Hey Boomers. Charles Krauthammer is a Pulitzer Prize-winning columist for the Wahington Post. In a recent article (see below) he talks about the "fiscally disastrous" entitlement of Healthcare reform. This "ultimate cash cow" will generate government tax revenue at levels similar in European countries called the VAT (value added tax) tax. Germany at 19%; France and Italy at 20% and Scandinavia at 25%. Are you ready Boomers for your new taxes? Denny Cincinnati Charles Krauthammer - WASHINGTON — As the night follows the day, the VAT cometh. With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable. We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only 6 years of outflows) — is at minimum a $2 trillion new entitlement. It will vastly increase the debt. But even if it were revenue-neutral, Obamacare preempts and appropriates for itself the best and easiest means of reducing the existing deficit. Obamacare’s $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured. This is fiscally disastrous because, as President Obama himself explained last year in unveiling his grand transformational policies, our unsustainable fiscal path requires control of entitlement spending, the most ruinous of which is out-of-control health care costs. Obamacare was sold on the premise that, as Nancy Pelosi put it, “health care reform is entitlement reform. Our budget cannot take this upward spiral of cost.” But the bill enacted on Tuesday accelerates the spiral: It radically expands Medicaid (adding 15 million new recipients/dependents) and shamelessly raids Medicare by spending on a new entitlement the $500 billion in cuts and the yield from the Medicare tax hikes. Obama knows that the debt bomb is looming, that Moody’s is warning that the Treasury’s AAA rating is in jeopardy, that we are headed for a run on the dollar and/or hyperinflation if nothing is done. Hence his deficit reduction commission. It will report (surprise!) after the November elections. What will it recommend? What can it recommend? Sure, Social Security can be trimmed by raising the retirement age, introducing means testing and changing the indexing formula from wage growth to price inflation. But this won’t be nearly enough. As Obama has repeatedly insisted, the real money is in health care costs — which are now locked in place by the new Obamacare mandates. That’s where the value-added tax comes in. For the politician, it has the virtue of expediency: People are used to sales taxes, and this one produces a river of revenue. Every 1 percent of VAT would yield up to $1 trillion a decade (depending on what you exclude—if you exempt food, for example, the yield would be more like $900 billion). It’s the ultimate cash cow. Obama will need it. By introducing universal health care, he has pulled off the largest expansion of the welfare state in four decades. And the most expensive. Which is why all of the European Union has the VAT. Huge VATs. Germany: 19 percent. France and Italy: 20 percent. Most of Scandinavia: 25 percent. As we approach European levels of entitlements, we will need European levels of taxation. Ultimately, even that won’t be enough. As the population ages and health care becomes increasingly expensive, the only way to avoid fiscal ruin (as Britain, for example, has discovered) is health care rationing. It will take a while to break the American populace to that idea. In the meantime, get ready for the VAT. Or start fighting it.

Hello Boomers. With all the talk about healthcare legislation and the resulting higher taxes many of us wonder - how can I protect what assets I have for retirement? Good question and I really don't give out financial advice since that is not my expertise. However, with that said financial education is a must! What you discover is that gold and silver has continued to hold value and worth in the last five thousand years. On the front page of my website is a link to GoldSilver.com. This website can offer you a wealth of reading and visual material on the subject. Check it out! Denny Cincinnati

Hey Boomers. Healthcare reform is going to affect all of us. Here is a snapshot of what to expect. This is a legacy we all don't want. Denny Cincinnati HEALTHCARE REFORM AS OF MARCH 26, 2010 The U.S. Senate yesterday passed H.R. 4872, the “Reconciliation Act of 2010.” It makes several changes to the healthcare law signed by President Obama. Below are the tax changes made by the reconciliation bill to current law: 1. Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income (Tax hike of $123 billion): Capital Gains Dividends Other* 2010 15% 15% 35% 2011-2012 (current law) 20% 39.6% 39.6% 2011-2012 (Obama budget)20% 20% 39.6% 2013+ (current law) 23.8% 43.4% 43.4% 2013+ (Obama budget) 23.8% 23.8% 43.4% *Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens. 2. Increase the employer mandate tax from $750 per employee to $2000 per employee (disregarding the first 30 employees). This tax would apply to any employer who does not offer insurance and who has at least one employee eligible for a tax credit to purchase insurance inside the exchange. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. (Tax increase of $26 billion when combined with individual mandate) 3. Increase the individual mandate tax from the greater of 2% of adjusted gross income (AGI) or a dollar amount to the greater of the following (See employer mandate score): 1 Adult 2 Adults 3+ Adults 2014 1% AGI/$95 1% AGI/$190 1% AGI/$285 2015 2% AGI/$325 2% AGI/$650 2% AGI/$975 2016 + 2.5% AGI/$695 2.5% AGI/$1390 2.5% AGI/$2085 4. Decrease Cadillac plan excise tax by delaying the implementation date from 2013 to 2018. It also increases the threshold for this 40% excise tax from $8500 single/$23,000 family to $10,200 single/$27,500 family. (Tax reduction of $117 billion) 5. Delays “Special Needs Kids Tax” (FSA Cap) until 2013. Delays the $2500 FSA cap (2011 under current law) until 2013. This provision delays the $2500 cap called for in the healthcare bill signed by the President. It will fall most-heavily on parents who use their FSAs to pay for expensive special-needs tuition pre-tax. (Tax reduction of $1 billion) 6. Raises “Parma Tax” from $22.2 billion to $27 billion from 2010-2019 (Tax hike of $4.8 billion). This is a simple money-grab from the pharmaceutical industry. 7. Changes medical device manufacturing excise tax from flat dollar amount to 2.9 percent excise tax (Tax hike of $800 million). This switches the money-grab in this industry from a dollar amount to a more conventional excise tax. 8. Raises health insurance tax from $59.6 billion to $60.1 billion from 2010-2019 (Tax hike of $500 million). This is a simple money-grab from the health insurance industry. 9. Delays tax hike on employer-provided retiree Rx drug coverage from 2011 to 2013 (Tax cut of $900 million). Under the bill the President signed, employers who provide retiree prescription drug coverage in coordination with Medicare would no longer be able to deduct their costs as a business expense. These moves forward that tax hike. 10. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. 11. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. 12. Exchange premium credits made more generous (Tax cut of $1 billion). This is more statistical scoring noise than anything else. 13. Associated effects on tax revenues (Tax cut of $11 billion). TOTAL Net Tax Hike Effect: $52.3 billion/10 years