Introduction Of Amendment to Repeal 3.8 Percent Tax Hike In Health Care Bill
by John Cornyn on March 24, 2010 at 4:41 PM
I spoke on the Senate floor today and introduced an amendment to the U.S. House of Representatives-passed House Health Care Reconciliation bill (H.R. 4872), to remove a 3.8 percent tax hike which would be imposed on the savings and investment income earned by taxpayers.
Why would Congress even consider raising taxes, imposing new mandates on individuals and employers at a time that the unemployment rate is near double-digits? This permanent tax hike is a mistake. It will discourage savings and investment; it will reduce productivity and will depress wages and the standard of living for millions of Americans. Simply put, increasing taxes on investment income, like all other tax increases included in the bill, is a job killer.
The introduced motion amends the reconciliation bill, which contains the changes House Democrats would like to make to the original health care bill signed into law by President Obama. The legislation would send the reconciliation bill back to the Senate Finance Committee to report the bill back, having removed the 3.8 percent tax on investment income.
The original health care bill and the bill before the Senate includes over $500 billion in tax increases and breaks President Obama’s pledge that everyone in America will pay lower taxes than they would under the rates Bill Clinton had in the 1990s. The additional 3.8 percent tax combined with the proposal in President Obama’s budget to raise capital gains rates back to 20 percent will raise the top capital gains rate to 23.8 percent, above the level they were at in the 1990s. A recent study by the Institute for Research on Economics and Taxation highlighted in a Wall Street Journal article, estimates that the investment tax would depress the gross domestic product (GDP) by about 1.3 percent and reduce capital formation by 3.4 percent.