Service Members Home Ownership Tax Act Of 2009
Floor Speech
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Mr. ENSIGN. Mr. President, I rise to speak about Senator Crapo's motion to commit the bill to the Committee on Finance in order that this bill does not increase taxes for individuals with incomes of less than $200,000 or families with incomes of less than $250,000.
Let's start by looking at three basic promises President Obama campaigned on to get elected--promises that almost no one on the other side of the aisle talks about anymore. Here are those promises. These are his quotes.
He says:
But let me [be] perfectly clear ..... if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not a single dime.
Promise No. 2:
..... nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.
His third promise:
Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.
I think these are three promises that should be the test when we are judging this health care bill. I certainly agree with President Obama on all three of these points. The nonpartisan Joint Committee on Taxation has recently confirmed that this bill, in no uncertain terms, is a middle-class tax nightmare. Even after you account for taxpayers who receive the tax credit, 24 percent of tax filers--so that is a quarter of all tax filers--who make under $200,000 will, on average, see their taxes go up. Only 8 percent of all taxpayers receive the premium tax credit, which, by the way, is a new entitlement program, not a tax cut, as Democrats claim.
This news should not be a surprise to anyone. We have known for a long time that the largest tax in the bill, the so-called Cadillac insurance plan tax, falls heavily on the middle class. Eighty-four percent--let me repeat this--84 percent of the people who pay the tax have incomes of less than $200,000 per year.
What is wrong with this bill? This bill contains nine--that is right, nine--new taxes that will affect every American. I wish to walk you through those brandnew taxes.
First, we have the 40-percent insurance plan tax. This is the biggest tax, and it is designed to make insurance companies and employers drop their premium insurance plans and leave people to buy cheaper plans. As a result, this tax violates promise No. 2 and promise No. 3 that the President made that I showed in my first chart. It also violates the first promise because 84 percent of the people paying this tax are in the middle class, according to the nonpartisan Joint Committee on Taxation.
The insurance tax, tax No. 2, is another tax that will raise the cost of everyone's insurance plans. According to the analysis from the nonpartisan Congressional Budget Office, which I will quote, these taxes ``would increase costs for the affected firms, which would be passed on to purchasers''--in other words, the employees--``and would ultimately raise insurance premiums by a corresponding amount.''
In addition to violating the first promise not to raise taxes on middle-class Americans, it also raises insurance premiums and violates the third promise. This is not a good start for the American people.
Tax No. 3, the employer tax. For businesses that are struggling to stay afloat and to not lay off employees, especially during these tough economic times, this tax will make it much harder and may result in further layoffs in our weakened economy.
I thought our goal was to create jobs and to strengthen our economy.
The drug tax--this is tax No. 4. This tax will increase pharmaceutical prices. In fact, my colleagues should not be surprised that drug companies are already increasing their prices ahead of this bill because they know they are going to be taxed.
Tax No. 5, the lab tax. If you need clinical laboratory tests, then here is another way the government is going to pick your pocket.
Tax No. 6, the medical device tax. If you need surgery, there is a new tax on medical devices, such as pacemakers and other lifesaving devices.
Tax No. 7, failure to buy insurance tax. If you do not buy insurance, as this bill mandates, then you must pay a penalty tax. Do not be fooled by the new bill as it changes the name from ``tax'' to ``penalty.'' It is still money out of your pocket. By the way, 75 percent of that tax is on people who make less than $200,000 a year--once again violating President Obama's first promise.
I also wish to note that unlike the protection we included in the committee's bill to waive interest on criminal and civil penalties on people who do not pay this tax, the current bill on the floor only stops criminal penalties and certain enforcement mechanisms. This bill still allows the IRS to go after people who do not buy insurance.
What is the maximum penalty allowed? For a civil penalty in this bill, $25,000 for not paying this tax. That is what Americans can be penalized if they just fundamentally do not agree with this tax. Some people, such as myself, do not believe it is constitutional that the Federal Government can require us to buy health insurance. If you believe strongly in the Constitution and you do not believe this is a constitutional provision, the IRS can come after you and require up to a $25,000 fine.
The next tax to talk about is the cosmetic surgery tax. Ironically, Democrats want to tax the most market-oriented aspect of medicine that has resulted in lower prices, safer procedures, and more consumer satisfaction by taxing cosmetic surgery procedures.
Tax No. 9, increased employee Medicare tax. Lastly, for the first time, some Americans will pay higher Medicare taxes and that money will finance an entirely new entitlement program.
According to the nonpartisan Joint Committee on Taxation, as I mentioned before, 84 percent of the people who pay the so-called Cadillac insurance plan tax are in the middle class.
Let's consider the whole taxpaying population of the United States. According, once again, to the nonpartisan Joint Committee on Taxation, 8 percent of the population, or slightly more than 13 million, will get benefits that the Democrats tout under this bill. That is about 8 percent of our population.
The other side is wrong to say that this bill delivers a broad tax cut to all Americans. It does this for only 8 percent, and only after shifting $ 1/2 billion worth of new taxes around to the rest of Americans. And what about the rest of Americans? They are either clear losers under this bill or come out roughly even by getting a tax credit to balance their tax hike. Even after you account for taxpayers who receive the tax credit, about one-quarter of all tax filers under $200,000 will, on average, see their taxes go up, not down.
About 157 million Americans who get health insurance from their employers will not be eligible for the tax credit. This does not take into account the higher premiums, medical devices, drugs, lab tests that the nonpartisan Joint Committee on Taxation says will be shifted to consumers. They did not break those tax impacts down by income level, so we can't tell you exactly where they fall. But since most Americans make less than $200,000 a year, common sense tells you that most of those taxes will be borne by Americans making under $200,000 a year.
Most of the nine brand new taxes in this legislation violate the President's promise that middle-class families will not have to pay more taxes. The purpose of the Crapo amendment is to inject honesty into the health care debate and to hold Congress to the promises that were made to the American people.
Before we vote on this, I want to remind my colleagues of a very similar vote we had last year. I had an amendment to the Budget Act that was passed 98 to 0 by this body. My amendment last year said: It shall not be in order in the Senate to consider any bill, resolution, amendment between Houses, motion----
The PRESIDING OFFICER (Mrs. Hagan). The Senator has used his 10 minutes.
Mr. ENSIGN. Madam President, I ask unanimous consent for an additional 1 minute.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ENSIGN. It shall not be in order in the Senate to consider any bill, resolution, amendment between Houses, motion or conference report that includes a Federal tax increase which would have widespread applicability on middle-income taxpayers. That passed 98 to zero. That provision was adopted. Unfortunately, it was stripped later when the budget resolution went to conference.
Let me say in conclusion, despite the actions my colleagues on the other side of the aisle made toward following that policy of not raising taxes on middle-income families, we continue to see legislative proposals--and the bill before us is exactly one of those legislative proposals--that do just that. So I support Senator Crapo's motion to commit this bill in order to remove these onerous tax burdens on the American people.
My argument is simple: Let's do what we said we would do and protect middle-income families from these taxes.
Madam President, I yield the floor.
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