Election Year Bamboozle: Obama Tries to Fake It on Corporate Taxes and ObamaCare
With his Presidential Approval Index rating dipping to -15, his signature healthcare legislation at the front door of the Supreme Court, his rejection of the Keystone Pipeline preventing both job creation and steps toward energy independence, his insistence on a “lead from behind” foreign policy- shall we go on?- President Obama and his staff have figured that it’s time to cook up a little more bamboozlin’ for some Americans who might need a nudging to finally agree that he is their man for the next four years.
First on the menu, is a proposal to lower the top corporate income tax rate from 35% to 28%. But, while the president proposes this “corporate tax cut,” he also plans to eliminate dozens of deductions, ending up with an increase in overall tax revenue.
According to his proposal, the “effective” manufacturing tax rate would be no more than 25%, down from 32%, but taxes on oil and gas companies would increase due to the loss of deductions and subsidies. In addition, U.S companies operating overseas would now be required to pay a minimum tax rate on their foreign earnings. And, for small businesses, President Obama plans to simplify tax filing and lower some taxes, but then end some of their tax deductions as well.
In total, the administration says its proposal will increase tax revenue by $250 billion over 10 years, with some companies paying more in taxes and others paying less, depending on the nature of the deductions that remain intact for their particular industry.
Of course, both parties have considered corporate tax reform by lowering tax rates, yet eliminating tax deductions, but why should the government dictate which industries should benefit, and which should not, from tax breaks?
Nevertheless, the superficial White House strategy will be to attack congressional Republicans from the “right” by proposing a “tax cut,” which is really not a tax cut, and then blaming them if they refuse to vote on it.
It is worth noting that the president’s alleged “corporate tax cut” to 28% is substantially higher than three of the Republican candidates for president. Rick Santorum proposes a 17.5% corporate tax rate, and 0% for manufacturers. Ron Paul’s plan calls for a 15% corporate tax rate. Newt Gingrich’s proposal for a 12.5% tax rate for corporations, the lowest of all the candidates, has earned him the approval of economist Art Laffer. By contrast, Mitt Romney’s current plan is for a top corporate tax rate of 25%, though it appears he has amended his entire tax proposal as a result of criticism that it was too timid.
A second way in which the White House plans to pull the wool over our eyes is through the gift that keeps on giving- ObamaCare. True, in 2014, we’ll start to feel the pain at the doctor’s office, if we can get in to see one, with the increase in taxes to help pay for everybody else’s healthcare wants. But, that comes after the election, so the president needs us to believe that ObamaCare will save us money before the election. Therefore, this summer, another ObamaCare mandate will require health insurance companies to pay up to $1.4 billion in rebates to 9 million voters, just in time for the election.
ObamaCare regulations require insurance companies to spend no less than 80-85% of every premium dollar they receive on “health benefits.” If insurers spend less than this amount, called the Medical Loss Ratio (MLR), they must issue rebates to their policy holders. Health insurance companies must report their MLR’s to HHS and issue any rebates due by August 1, 2012.
The MLR mandate will accomplish a few things for the president.
It will prevent insurance companies from saving and preparing for the difficult years ahead when healthcare costs increase dramatically. With its boot on the neck of insurance companies, the Obama mandate will require them to issue rebates when they have made more money than the president thinks they should make. Consequently, small insurance companies will likely disappear, and, eventually, if the law stands, the larger ones will likely fade into the sunset, as well, as a single payer system takes over.
In addition, the MLR mandate pretty much obliterates market-friendly health insurance. There is nothing in the regulation that offers incentives to health insurers to continue offering lower cost, higher deductible health plans, or health savings accounts, the latter of which affords the greatest degree of independence for healthcare consumers, namely, us. The administration's theme here is: if you save money, it's ours to have. Of course, Americans will need those rebates to pay all the increases in taxes due to ObamaCare's existence in the first place. Get the sick, vicious cycle here?
Last, but not least, the MLR mandate also means a greater number of unemployed among the health insurance industry, which translates into a lower level of service to policy holders, namely, us. So, while you are waiting for days to get in to see a doctor, you can also wait on “hold” longer to speak to an agent at your insurance company if you have a problem.
Of course, just before the election in November, the Bamboozler-in-Chief will be sure to remind us that, just as he has wanted to “cut” corporate taxes, even though the Republicans wouldn’t “let” him, he has also forced those god-awful insurance companies to get up the money to pay us back for all the trouble they cause us each day of our lives.