Major corporations are discovering they will be losing stunning amounts to taxes as a result of Obamacare.
The news on healthcare reform this week is that right off the bat, the major corporations are discovering they will be losing stunning amounts to taxes as a result of Obamacare.
Caterpillar, the first to speak out, reported it will take a one-time write-down of $100 million in order to account for the elimination of a federal tax refund it has been receiving for providing drug benefits to its retired employees. In the following days, AT&T, Verizon, 3M, Deer & Co., and AK Steel Holdings announced they would take similar write downs. AT&T’s new tax bill will come to over $1 billion. The news is a body blow to major companies hoping to recover profitability and add jobs.
If all this sounds familiar, it should. It is exactly what Republicans predicted would happen if Obamacare became law. If existing employee benefits were taxed or made more expensive, the GOP argued, employers would either have to absorb the loss or start pushing their employees into whatever “government option” became available. When the Bush Administration adopted Medicare Part D in 2003, companies threatened to do just that, dropping their coverage and letting retirees buy into the federal program. The government offered a tax refund of about $650 per retiree in order to keep Part D costs down. Now the Obama Administration has decided to eliminate the tax refund in order to pay for the larger entitlements in the new bill.
All this, however, was too much for Henry Waxman, chairman of the House Energy and Commerce Committee. He demanded that CEOs from the major companies appear before him on April 21 to explain just what’s going on. “These assertions appear to conflict with independent analyses,” said the chairman, “which show that the new law will expand coverage and bring down costs.”
“When I use a word, it means exactly what I want it to mean, no more, no less,” says Humpty-Dumpty in Alice and Wonderland. “When we pass a law, it will do exactly what we want it to do,” say the Democrats in Congress. Never mind economics, never mind common sense.
This is typical of Washington — too many lawyers, too few people who understand business or energy or insurance or medicine or whatever the government has decided to regulate. The laws of a society are supposed to administer justice and make things run smoothly. Instead, the law in America has become a tool for forcing other people to do what you want. That’s why everybody wants to become a lawyer and nobody wants to become an engineer, scientist, doctor or — god forbid — an insurance company executive. Now that the results of Obamacare are emerging, the demonization of insurance companies that greased its passage will soon extend to American business as a whole.
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