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Senate Healthcare Tax Repeal Good for Economy

Senate Healthcare Tax Repeal Good for Economy

By    |   Monday, 26 June 2017 02:30 PM

The proposed Senate healthcare bill is controversial.

Democrats are unanimous in opposition. The Senate Republicans are short of a majority vote with five members still not on board with its passage. 

There is a consensus by all that it does not repeal Obamacare. 

Rather than just repealing and rewriting the law, the Senate bill (and the House bill) continues mandating government control. 

Buried in the massive proposed legislation is a laundry list of Obamacare tax provisions that if terminated immediately benefit the economy and investors.

I have no doubt that the best use of taxpayer money is by the taxpayers and not Congress. Investment by taxpayers into the private sector creates productivity, economic expansion, and jobs. Spending by the government doesn't.

Healthcare is an issue that gives Congress cover to raise taxes.

It does that by directly raising rates, and indirectly reducing deductions, and manipulating limitations on the amounts of deductions allowable as deductible.

The Senate tax repeal proposals are a start toward getting government out of our pocketbooks even if not out of controlling our healthcare.

Some of the more notable provisions are:

  • Repealing the 3.8% net investment income tax which will immediately lower the tax barrier to more investment by the private sector.
  • Eliminate the health insurance mandate which was intended to force healthy taxpayers to buy health insurance to cover the insurance costs for unhealthy people. It was a stupid solution that predictably failed.  
  • The penalty applicable under the employer mandate would is reduced to zero.
  • It eliminates the prohibition on using health saving accounts (HAS), Archer Medical Savings Accounts (MSA), health flexible spending arrangements (FSA), and health reimbursements to pay for over-the-counter medicines.
  • For 2018, the limitation on contributions to FSAs would be repealed.
  • The 10% limitation on the income threshold for itemizing medical expense deductions is reduced to 7.5%.
  • The annual fee imposed by Obamacare on health insurance provisions will be eliminated starting in 2018.
  • The excise tax on medical devices and indoor tanning services is repealed. (Another couple of dumb ideas.)
  • The 0.9% Medicaid surtax is a goner as well.

There is more, but I think you get the idea.

The healthcare system is a mess as is everything else the federal government sticks its nose into, so to speak.

The Senate tax repeal provisions will not get the federal government out of controlling our healthcare and data.

But repealing direct and indirect tax burdens by government — even if small ones — is good for the private economy.

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.

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The Senate tax repeal proposals are a start toward getting government out of our pocketbooks even if not out of controlling our healthcare.
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Monday, 26 June 2017 02:30 PM
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