White House 2016

   Earlier today, the Romney campaign released a new ad entitled “Nothing’s Free”.  The 30 second spot continues to belabor the point that President Obama and his fellow Democrats raided Medicare by taking $716 billion out of it to pay for Obamacare.  But the ad also shatters the President’s rhetoric regarding his committment to insuring that the middle class does not get hit with any new taxes.

For months, liberals led by the President have lied about their desire to only raise taxes on those making more than $250,000 a year.  It has been a part of their divide and conquer strategy of class warfare.  In one recent campaign stop, Mitt Romney summed up the strategy this way;

“His campaign strategy is to smash America apart and then cobble together 51 percent of the pieces.”

Well in this latest ad, the Romney-Ryan Team shed light on the numerous tax increases that President Obama and his Party raised on families earning less than $120,000 a year.  They are largely taxes that were hidden in the nearly 3,000 pages of legislation that make up Obamacare.

The new Romney ad, focusses largely on the taxes that Obamacare places on medical supplies, but the truth is Obamacare creates 20 new taxes that hit those who Democrats describe as the poor and middle class.

Taxes that took effect in 2010:

1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new “community health assessment needs,” “financial assistance,” and “billing and collection” rules set by HHS. Bill: PPACA; Page: 1,961-1,971.

2. 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. Bill: Reconciliation Act; Page: 108-113.

3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105.

4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980.

5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004.

6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399.

Taxes that took effect in 2011:

7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959.

HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959.

Taxes that took effect in 2012:

9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957.

Taxes that take effect in 2013:

10. Surtax on Investment Income ($123 billion/Jan. 2013): 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: Bill: Reconciliation Act; Page: 87-93.

11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes; Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

13. Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

6. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014:

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following

	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

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).Bill: PPACA; Page: 317-337

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).Bill: PPACA; Page: 345-346Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

Taxes that take effect in 2018:

20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

But who cares about all those silly facts, right?

While the new Romney ad doesn’t get in to all those taxes in a simple 30 second spot, it does successfully drive home some basic points;

1. The President raided Medicare
2. Obamacare is nothing but a series of massive tax increases’
3. The President does raise taxes on those making less than $120,000 a year
4. Nothing is free, not even the government handouts that liberals are so generous with

One other subtle point worth noting about this commercial are the red and blue pills that are seen at the beginning of it.  In a  speech once offered by the President, he spoke of two pills, a blue one and a red one.  He then urged Americans to take the blue pill.  The problem with the analogy was that thanks to the movie The Matrix, in pop culture, the blue pill is the one that keeps you in the fantasy world.  For many it was an indication of the President’s true hope that most Americans would ignore the realities of his expensive, tax-hiking, and choice-limiting legislation.

The newest ad on Obamacare and increased taxes comes on the heels of another ad which the Romney campaign released over the weekend, after Paul Ryan campaigned on Medicare reform in Florida at The Villages, the world’s largest retirement community.

The commercial is called “Our Generation’s Time” and uses quotes from Ryan’s speech at his campaign stop at The Villages to drive home the point that while Democrats and the President have raided Medicare, the Romney-Ryan Team will preserve Medicare.

“Medicare should not be a piggy bank for Obamacare.  Medicare should be the promise that it made to our current seniors. Period. End of story”,  says Ryan in one quote used in the ad.

Both ads mark a pleasant change in the history of political campaigns.  For the first time since Democrats began using their scare tactics against senior citizens with Ronald Reagan in the 80’s, Democrats are now finally being held accountability for their damaging deeds regarding senior citizens and as such, are now on the defense when it comes to Medicare.

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