Gov. Perdue: Health bill will hurt Ga., require new taxes or big service cuts
New taxes and fees ahead for individuals, businesses — timeline and details
The just-passed federal healthcare bill will cost Georgia an added $1 billion in Medicaid spending per year, “requiring either a tax hike or offsetting cuts to public safety, education and other core services of state government,” Governor Sonny Perdue said Monday.
Perdue said the bill — passed Sunday night with only Democrat votes — will also hurt small-business owners across the state.
Perdue also called out all current state office-seekers to declare publicly their support of or opposition to the historic healthcare overhaul.
The governor again urged Attorney General Thurbert Baker to pursue a legal challenge to the soon-to-be federal law. Baker, a Democratic candidate for governor, has indicated in the past he has no intention of suing the federal government over this issue.
Perdue said the state is exploring other legal options to oppose the healthcare changes.
The following is the text of the governor’s statement March 22:
“Unfortunately, the United States House of Representatives last night chose politics over the will of the American people. The enormous upheaval of our healthcare system was pushed through the House against the wishes of the majority of American families and businesses.
“Here in Georgia, this vote will force an additional billion dollars or more of Medicaid spending per year, requiring either a tax hike or offsetting cuts to public safety, education and other core services of state government.
“While this colossal unfunded mandate cripples our budget, I am even more concerned about the debilitating impact it will have on Georgia’s small businesses. The extension of the Medicare tax on all non-wage income means that small business owners will see their top rate increased by 20 percent and investment income taxes increasing 60 percent.
“What is most unfortunate is that the American people had no voice at the table in Washington during the course of this debate. The only glimpse citizens saw of the process were closed-door meetings that resulted in backroom deals and the buying of votes to ensure passage.
“I am today renewing my December request to the Attorney General that he join other states in reviewing the constitutionality of this travesty. My office has already begun to review any and all legal options to challenge this legislation.
“I also urge the Georgia General Assembly to continue moving forward on my proposal to allow Georgians to purchase insurance plans across state lines. Now that Congress is mandating that every American purchase health insurance, we should open the individual market to as much competition as possible.
“Since this bill has such a significant impact on future state budgets, it is imperative that current candidates for elected office publicly state their plans to either support the Obama-Pelosi legislation or fight for the people of Georgia.”
Tax Foundation details new taxes ahead
Tax Foundation Highlights Tax Changes to Fund $940 Billion Health Care Reform Legislation
Washington, DC – The $940 billion healthcare reform legislation passed by the House of Representatives Sunday night contains Medicare spending cuts along with significant tax increases scheduled to take place over the next 10 years. A new Tax Foundation Fiscal Fact outlines the timeline of all tax provisions and highlights those that will increase or decrease revenue by more than $10 billion.
The major tax provisions include:
Retroactive to January 1, 2010:
* Small Business Tax Credit for certain small businesses (those meeting certain criteria) providing health insurance to employees (retroactive to January 1, 2010). In 2013, restricted only to insurance purchased through an exchange and only available for two consecutive years
* Exclusion of unprocessed fuels from the cellulosic biofuel producer credit (retroactive to January 1, 2010)
Scheduled to go into effect in 2011:
* Impose annual fee on manufacturers and importers of branded drugs ($2.5 billion for 2011, $2.8 billion per year for 2012 and 2013, $3.0 billion per year for 2014 through 2016, $4.0 billion for 2017, $4.1 billion for 2018, and $2.8 billion for 2019 and thereafter)
Scheduled to go into effect in 2012:
* Require information reporting on payments to corporations
Scheduled to go into effect in 2013:
* Limit health flexible spending arrangements in cafeteria plans to $2,500; indexed to CPI-U after 2013
* Impose 2.3% excise tax on manufacturers and importers of certain medical devices
* Raise 7.5% AGI floor on medical expenses deduction to 10%; AGI floor for individuals age 65 and older (and their spouses) remains at 7.5% through 2016
* Broaden Medicare Hospital Insurance Tax Base for High-Income Taxpayers - additional HI tax of 0.9% on earned income in excess of $200,000/$250,000 (unindexed), and Unearned Income Medicare Contribution on 3.8% on investment income for taxpayers with AGI in excess of $200,000/$250,000 (unindexed)
* Impose Fee on Insured and Self-Insured Health Plans; Patient-Centered Outcomes Research Trust Fund (expires after 2019)
Scheduled to go into effect in 2014:
* Impose annual fee on health insurance providers ($8 billion in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017, $14.3 billion in 2018, and indexed to medical cost growth thereafter); based upon firm’s market share starting in 2013
* Excise Tax (i.e., penalty) on Individuals Without Essential Health Benefits Coverage
* Excise Tax (i.e., penalty) on Employers Not Providing Health Insurance Coverage to Employees (Shared Responsibility for Employers)
* Refundable Tax Credit Providing Premium Assistance for Coverage Under a Qualified Health Plan
Scheduled to go into effect in 2018
* 40% excise tax on health coverage in excess of $10,200/$27,500 (subject to adjustment for unexpected increase in medical costs prior to effective date) and increased thresholds of $1,650/$3,450 for over age 55 retirees or certain high-risk professions, both indexed for inflation by CPI-U plus 1%; adjustment based on age and gender profile of employees; vision and dental excluded from excise tax; levied at insurer level; employer aggregates and issues information return for insurers indicating amount subject to the excise tax; nondeductible.
Tax Foundation Fiscal Fact, No. 218, “Timeline of Tax Provisions in the House Health Care Bill,” is available online at http://www.taxfoundation.org/news/show/26037.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.