"Big Brother" Passes Health Care Bill

Fans of small government, I hope you're sitting down. Our House of Representatives passed a bill this weekend that would give our government a huge measure of control over our health care system. By taking the reins on health care, our government is proposing to take over an industry that currently makes up 1/6 of our Nation's total economy!!!

In the past year, we have seen our federal government expand its power exponentially. The government is now involved in our financial markets, our mortgage industry, the automobile industry, and now they're also planning on going in to the health care business. At this rate, it might not be long until the government runs everything for us.....all we will have to do is sit back and pay our 90% tax rates and they'll take care of the rest!

Yes, that's probably an exaggeration. But consider that the health care package has a projected price tag of $1.2 trillion, and the stimulus package passed earlier this year cost an estimated $3.27 trillion. That means that, should the health care bill get past the Senate, our esteemed lawmakers have spent an extra $4.5 trillion of our money in this year alone....and this is in addition to the already bloated federal budget.

Since we primarily deal with the aspects of these bills that relate to income taxes, here are some of the tax-related provisions of the bill passed by the House on Saturday night:

--This bill imposes taxes on individuals who do not obtain "acceptable" health insurance coverage, as well as increased employment taxes on employers who do not provide acceptable coverage, in addition to excise taxes on failures to meet certain health coverage requirements.

--The bill would impose a surcharge on taxpayers with adjusted gross income in excess of $1 million for a married couple filing a joint return and $500,000 for a single individual at a rate of 5.4 percent.

--The legislation eliminates nontaxable reimbursements of over-the-counter medications from health savings accounts, health reimbursement arrangements, and health flexible spending accounts, and limits contributions to health FSAs to $2,500. The bill also increases the penalty for non-health-related distributions from HSAs from 10 percent to 20 percent.

--The bill imposes an excise tax of 2.5 percent on medical devices used in the United States.

--Small business tax credits are available for businesses with 10 or fewer employees and $20,000 or less in average wages. The credits phase out if the employer has 25 or more employees, or if average wages are $40,000 or more. The credits are available on rolling basis for the first two years that an employer offers qualified coverage.

--Individuals are required to obtain health insurance coverage or pay a fee equal to the lower of 2.5 percent of their adjusted income above the filing threshold or the average premium on the health insurance exchange.

How else did you think the government was going to pay for this program, other than to tax its citizenry? In typical Washington fashion, their concept for improving our health care system wasn't to fix the problems with out of control provider costs and the need for tort reform. Nooooo....their solution was to require everyone to buy into the broken system - incredible!

Ladies and gentlemen.....our government at work!

--Dan Musick is the tax services partner for Cook & Associates, a full service public accounting firm with offices in San Marcos and San Antonio, TX