Posts Tagged ‘ Tax Increase ’

Obama State Of The Union 2011 (transcript)

Here is the full text of the speech draft, obtained by National Journal: from a Democratic insider who who declined to be identified because the source would be violating the White House’s embargo:

Tonight I want to begin by congratulating the men and women of the 112th Congress, as well as your new Speaker, John Boehner. And as we mark this occasion, we are also mindful of the empty chair in this Chamber, and pray for the health of our colleague – and our friend – Gabby Giffords.

It’s no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs. And that’s a good thing. That’s what a robust democracy demands. That’s what helps set us apart as a nation.

But there’s a reason the tragedy in Tucson gave us pause. Amid all the noise and passions and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater – something more consequential than party or political preference.

We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled.

That, too, is what sets us apart as a nation.

Now, by itself, this simple recognition won’t usher in a new era of cooperation. What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.

I believe we can. I believe we must. That’s what the people who sent us here expect of us. With their votes, they’ve determined that governing will now be a shared responsibility between parties. New laws will only pass with support from Democrats and Republicans. We will move forward together, or not at all – for the challenges we face are bigger than party, and bigger than politics.

At stake right now is not who wins the next election – after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else. It’s whether the hard work and industry of our people is rewarded. It’s whether we sustain the leadership that has made America not just a place on a map, but a light to the world.

We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.

But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.

That’s the project the American people want us to work on. Together.

We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.

But we have more work to do. The steps we’ve taken over the last two years may have broken the back of this recession – but to win the future, we’ll need to take on challenges that have been decades in the making.

Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.

That world has changed. And for many, the change has been painful.  I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear – proud men and women who feel like the rules have been changed in the middle of the game.

They’re right. The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100.  Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.

So yes, the world has changed. The competition for jobs is real. But this shouldn’t discourage us. It should challenge us. Remember – for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We are home to the world’s best colleges and universities, where more students come to study than any other place on Earth.
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The Day The Dollar Died


Dollar Losing Value Under Obama

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Where’s The Money !
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Obama Signs $1.1 Trillion Spending Bill
Earmarks In The $1.1T Federal Spending Bill
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Obama Attack Social Security
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Tax Hikes in Obamacare

[PDF version]

Next week, the U.S. House of Representatives will be voting on an historic repeal of the Obamacare law.  While there are many reasons to oppose this flawed government health insurance law, it is important to remember that Obamacare is also one of the largest tax increases in American history.  Below is a comprehensive list of the two dozen new or higher taxes that pay for Obamcare’s expansion of government spending and interference between doctors and patients.

Individual Mandate Excise Tax(Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following

1 Adult 2 Adults 3+ Adults
2014 1% AGI/$95 1% AGI/$190 1% AGI/$285
2015 2% AGI/$325 2% AGI/$650 2% AGI/$975
2016 + 2.5% AGI/$695 2.5% AGI/$1390 2.5% AGI/$2085

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS)

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20 State Lawsuit Challenging Obama Health Care

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF FLORIDA
Pensacola Division Case No.: 3:10-cv-91-RV/EMTSTATE OF FLORIDA, by and through
BILL McCOLLUM, ATTORNEY GENERAL
OF THE STATE OF FLORIDA;
STATE OF SOUTH CAROLINA, by and through
HENRY McMASTER, ATTORNEY GENERAL
OF THE STATE OF SOUTH CAROLINA;
STATE OF NEBRASKA, by and through
JON BRUNING, ATTORNEY GENERAL
OF THE STATE OF NEBRASKA;
STATE OF TEXAS, by and through
GREG ABBOTT, ATTORNEY GENERAL
OF THE STATE OF TEXAS;
STATE OF UTAH, by and through
MARK L. SHURTLEFF, ATTORNEY GENERAL
OF THE STATE OF UTAH;
STATE OF LOUISIANA, by and through
JAMES D. “BUDDY” CALDWELL, ATTORNEY
GENERAL OF THE STATE OF LOUISIANA;
STATE OF ALABAMA, by and through
TROY KING, ATTORNEY GENERAL
OF THE STATE OF ALABAMA;
MICHAEL A. COX, ATTORNEY GENERAL
OF THE STATE OF MICHIGAN, ON BEHALF OF
THE PEOPLE OF MICHIGAN;
STATE OF COLORADO, by and through
JOHN W. SUTHERS, ATTORNEY GENERAL
OF THE STATE OF COLORADO;
COMMONWEALTH OF PENNSYLVANIA, by
and through THOMAS W. CORBETT, Jr.,
ATTORNEY GENERAL OF THE
COMMONWEALTH OF PENNSYLVANIA;
STATE OF WASHINGTON, by and through
ROBERT M. McKENNA, ATTORNEY GENERAL
OF THE STATE OF WASHINGTON;
STATE OF IDAHO, by and through
LAWRENCE G. WASDEN, ATTORNEY GENERAL
OF THE STATE OF IDAHO;
STATE OF SOUTH DAKOTA, by and through
MARTY J. JACKLEY, ATTORNEY GENERAL
OF THE STATE OF SOUTH DAKOTA;
STATE OF INDIANA, by and through
GREGORY F. ZOELLER, ATTORNEY GENERAL
OF THE STATE OF INDIANA;
STATE OF NORTH DAKOTA, by and through
WAYNE STENEJHEM, ATTORNEY GENERAL
OF THE STATE OF NORTH DAKOTA;
STATE OF MISSISSIPPI, by and through
HALEY BARBOUR, GOVERNOR OF
THE STATE OF MISSISSIPPI;
STATE OF ARIZONA, by and through JANICE K.
BREWER, GOVERNOR OF THE STATE OF ARIZONA;
STATE OF NEVADA, by and through JIM GIBBONS,
GOVERNOR OF THE STATE OF NEVADA;
STATE OF GEORGIA, by and through SONNY PERDUE,
GOVERNOR OF THE STATE OF GEORGIA;
STATE OF ALASKA, by and through
DANIEL S. SULLIVAN, ATTORNEY GENERAL OF
THE STATE OF ALASKA;
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, a California nonprofit mutual benefit
corporation;
MARY BROWN, an individual; and
KAJ AHLBURG, an individual;
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES;
KATHLEEN SEBELIUS, in her official
capacity as the Secretary of the United States
Department of Health and Human Services;
UNITED STATES DEPARTMENT OF
THE TREASURY; TIMOTHY F.
GEITHNER, in his official capacity as the
Secretary of the United States Department
of the Treasury; UNITED STATES
DEPARTMENT OF LABOR; and HILDA
L. SOLIS, in her official capacity as Secretary
of the United States Department of Labor,
Defendants.
___________________________________________/
AMENDED COMPLAINT
Pursuant to Rule 15(a), Federal Rules of Civil Procedure, and paragraph A of the Final Scheduling Order entered by the Court on April 14, 2010, Plaintiffs file this Amended Complaint against Defendants and state: 

NATURE OF THE ACTION
1. This is an action seeking declaratory and injunctive relief from the “Patient Protection and Affordable Care Act,” P.L. 111-148, as amended by the “Health Care and Education Reconciliation Act of 2010,” P.L. 111-152 (collectively the Act). The Act’s mandate that all citizens and legal residents of the United States maintain qualifying healthcare coverage or pay a penalty (individual mandate) is an unprecedented encroachment on the sovereignty of the Plaintiff States and on the rights of their citizens, including members of Plaintiff National Federation of Independent Business (NFIB) and individual Plaintiffs Mary Brown and Kaj Ahlburg. By imposing such a mandate, the Act: exceeds the powers of the United States under Article I of the Constitution, particularly the Commerce Clause; violates the Ninth and Tenth Amendments and the Constitution’s principles of federalism and dual sovereignty; and violates the Fifth Amendment’s Due Process Clause. In the alternative, if the penalty required under the Act is a tax, it constitutes an unlawful capitation or direct tax in violation of Article I, sections 2 and 9 of the Constitution.

2. The Act further violates the Constitution by forcing the Plaintiff States to operate a wholly refashioned Medicaid program. The Act converts Medicaid from a federal-State partnership to provide a safety net for the needy into a federally-imposed universal healthcare regime, in which the discretion of the Plaintiff States has been removed and new requirements and expenses forced upon them in derogation of their sovereignty. In so doing, the Act violates the Ninth and Tenth Amendments and the Constitution’s principles of federalism.

3. Plaintiffs seek declaratory and injunctive relief against the Act’s operation in order to avoid an unprecedented and unconstitutional intrusion by the federal government into the private affairs of every American and to preserve Plaintiff States’ respective sovereignty, as guaranteed by the Constitution.

JURISDICTION AND VENUE

4. The Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1331 because this action arises under the Constitution and laws of the United States and further has jurisdiction to render declaratory relief under 28 U.S.C. § 2201.

5. Venue is proper in this district pursuant to 28 U.S.C. § 1391(e)(3) because no real property is involved, the district is situated in Florida, and the defendants are agencies of the United States or officers thereof acting in their official capacity.

PARTIES

6. The State of Florida, by and through Bill McCollum, Attorney General of Florida, is a sovereign State in the United States of America.

7. The State of South Carolina, by and through Henry McMaster, Attorney General of South Carolina, is a sovereign State in the United States of America.

8. The State of Nebraska, by and through Jon Bruning, Attorney General of Nebraska, is a sovereign State in the United States of America.

9. The State of Texas, by and through Greg Abbott, Attorney General of Texas, is a sovereign State in the United States of America.

10. The State of Utah, by and through Mark L. Shurtleff, Attorney General of Utah, is a sovereign State in the United States of America.

11. The State of Alabama, by and through Troy King, Attorney General of Alabama, is a sovereign State in the United States of America.

12. The State of Louisiana, by and through James D. “Buddy” Caldwell, Attorney General of Louisiana, is a sovereign State in the United States of America.

13. Michael A. Cox, Attorney General of Michigan, is bringing this action on behalf of the People of Michigan under Mich. Comp. Law § 14.28, which provides that the Michigan Attorney General may “appear for the people of [Michigan] in any other court or tribunal, in any cause or matter, civil or criminal, in which the people of [Michigan] may be a party or interested.” Under Michigan’s constitution, the people are sovereign. Mich. Const. art. I, § 1 (“All political power is inherent in the people. Government is instituted for their equal benefit, security,. and protection.”).

14. The State of Colorado, by and through John W. Suthers, Attorney General of Colorado, is a sovereign State in the United States of America.

15. The Commonwealth of Pennsylvania, by and through Thomas W. Corbett, Jr., Attorney General of Pennsylvania, is a sovereign State in the United States of America.

16. The State of Washington, by and through Robert A. McKenna, Attorney General of Washington, is a sovereign State in the United States of America.

17. The State of Idaho, by and through Lawrence G. Wasden, Attorney General of Idaho, is a sovereign State in the United States of America.

18. The State of South Dakota, by and through Marty J. Jackley, Attorney General of South Dakota, is a sovereign State in the United States of America.

19. The State of Indiana, by and through Gregory F. Zoeller, Attorney General of Indiana, is a sovereign State in the United States of America.

20. The State of North Dakota, by and through Wayne Stenehjem, Attorney General of North Dakota, is a sovereign State in the United States of America.

21. The State of Mississippi, by and through Haley Barbour, Governor of Mississippi, is a sovereign State in the United States of America.

22. The State of Arizona, by and through Janice K. Brewer, Governor of Arizona, is a sovereign State in the United States of America.

23. The State of Nevada, by and through Jim Gibbons, Governor of Nevada, is a sovereign State in the United States of America.

24. The State of Georgia, by and through Sonny Perdue, Governor of Georgia, is a sovereign State in the United States of America.

25. The State of Alaska, by and through Daniel S. Sullivan, Attorney General of Alaska, is a sovereign State in the United States of America.

26. The National Federation of Independent Business (NFIB), a California nonprofit mutual benefit corporation, is the nation’s leading association of small businesses, including individual members, and has a presence in all 50 States and the District of Columbia. NFIB’s mission is to promote and protect the rights of its members to own, operate, and earn success in their businesses, in accordance with lawfully-imposed governmental requirements. The NFIB Small Business Legal Center is a nonprofit, public interest law firm established to provide legal resources and be the voice for small businesses in the nation’s courts through representation on issues of public interest affecting small businesses. NFIB’s members include individuals who object to: forced compliance with the Act’s mandate that they obtain qualifying healthcare insurance or pay a penalty; diversion of resources from their businesses that will result from complying with the mandate; and the Act’s overreaching and unconstitutional encroachment on the States’ sovereignty. NFIB joins in those objections on behalf of its members. NFIB’s services to its members include providing information regarding legal and regulatory issues faced by small businesses, including individuals. NFIB will incur additional costs in assisting its members in understanding how the Act applies to them and affects their businesses.

27. Mary Brown is a citizen and resident of the State of Florida and a citizen of the United States. She is self-employed, operating Brown & Dockery, Inc., an automobile repair facility in Panama City, Florida, and is a member of NFIB. Ms. Brown has not had healthcare insurance for the last four years, and devotes her resources to maintaining her business and paying her employees. She does not qualify for Medicaid under the Act or Medicare and does not expect to qualify for them prior to the Act’s individual mandate taking effect. Ms. Brown will be subject to the mandate and objects to being forced to comply with it, and objects to the Act’s unconstitutional overreaching and its encroachment on the States’ sovereignty.

28. Kaj Ahlburg is a citizen and resident of the State of Washington and a citizen of the United States. Mr. Ahlburg has not had healthcare insurance for more than six years, does not have healthcare insurance now, and has no intention or desire to have healthcare insurance in the future. Mr. Ahlburg is and reasonably expects to remain financially able to pay for his own healthcare services if and as needed. He does not qualify for Medicaid under the Act or Medicare and does not expect to qualify for them prior to the Act’s individual mandate taking effect. Mr. Ahlburg will be subject to the mandate and objects to being forced to comply with it, and objects to the Act’s
unconstitutional overreaching and its encroachment on the States’ sovereignty. (Plaintiffs Brown and Ahlburg are referred to as the Individual Plaintiffs.)

29. The Department of Health and Human Services (HHS) is an agency of the United States, and is responsible for administration and enforcement of the Act, through its center for Medicare and Medicaid Services.

30. Kathleen Sebelius is Secretary of HHS, and is named as a party in her official capacity.

31. The Department of the Treasury (Treasury) is an agency of the United States, and is responsible for administration and enforcement of the Act.

32. Timothy F. Geithner is Secretary of the Treasury, and is named as a party in his official capacity.

33. The Department of Labor (DOL) is an agency of the United States, and is responsible for administration and enforcement of the Act.

34. Hilda L. Solis is Secretary of DOL, and is named as a party in her official capacity.

FACTUAL ALLEGATIONS
The Unprecedented and Unconstitutional Individual Mandate

35. The Act mandates that all persons who are citizens or legal residents of any State within the United States, including NFIB members and the Individual Plaintiffs, must have and maintain qualifying healthcare coverage, regardless of whether they wish to do so, to avoid having to pay a penalty. Many individuals, including NFIB members and the Individual Plaintiffs, will be forced to purchase the required coverage with their own assets, without contribution or subsidy from the federal government. If a person fails to maintain such coverage, the federal government will force that person to pay a penalty, the amount of which will be increased gradually through 2016, reaching 2.5 percent of household income or $695 per year (up to a maximum of three times that amount ($2,085)) per family, whichever is greater. After 2016, the penalty will increase annually based on a cost-of-living adjustment.

36. Exemptions to the penalty apply for individuals with certain religious objections, individuals who belong to certain faith-based healthcare cooperative organizations, American Indians, persons without coverage for less than three months, undocumented immigrants, incarcerated individuals, persons for whom the lowest cost plan option exceeds 8 percent of income, individuals with incomes below the tax filing threshold, and persons with financial hardships. Millions of individuals will be forced to choose between having qualified coverage and paying the penalty.

37. Congress never before has imposed a mandate that all citizens buy something—in this case health insurance—or pay a penalty. According to the non-partisan Congressional Budget Office (CBO), “the imposition of an individual mandate [to buy health insurance] . . . would be unprecedented. The government has never required people to buy any good or service as a condition of lawful residence in the United States.” THE BUDGETARY TREATMENT OF AN INDIVIDUAL MANDATE TO BUY HEALTH INSURANCE, CBO MEMORANDUM (August 1994), http://www.cbo.gov/ftpdocs/48xx/doc4816/doc38.pdf (last visited May 11, 2010). The CBO added that an individual mandate could “transform the purchase of health insurance from an essentially voluntary private transaction into a compulsory activity mandated by law.” Id.

38. Congress lacks the constitutional authority to enact the individual mandate. The Constitution limits Congress’s authority to the specific powers enumerated in Article I, and thus does not grant unlimited authority to Congress. None of Congress’s enumerated powers includes the authority to force every American to buy a good or service on the private market or face a penalty. For the first time, Congress under the Act is attempting to regulate and penalize Americans for choosing not to engage in economic activity. If Congress can do this much, there will be virtually no sphere of private decision-making beyond the reach of federal power.

Medicaid Program Prior to the Act

39. Medicaid was established by Title XIX of the Social Security Act of 1965, 42 U.S.C. §§ 1396 et seq., as the nation’s major healthcare program for low-income persons. The States and the federal government have funded each participating State’s Medicaid program jointly.

40. From the beginning of Medicaid until passage of the Act, the States were given considerable discretion to implement and operate their respective Medicaid programs in accordance with State-specific designs regarding eligibility, enrollment, and administration, so long as the programs met broad federal requirements.

41. At the outset of Medicaid, the States were free to opt in and establish their own State health or welfare plans or to provide no benefits at all. None of the Plaintiff States agreed to become a Medicaid partner of the federal government with an expectation that: a) the terms of its participation would be altered significantly; b) the federal government would increase significantly its own control and reduce significantly that State’s discretion over the Medicaid program; c) the federal government would alter the program’s requirements to expand eligibility for enrollment beyond the State’s ability to fund its participation; d) the federal government would alter the program from requiring that States pay for healthcare services to requiring that States provide such services; or e) the federal government would exercise its control over Medicaid terms and eligibility as part of a coercive scheme to force all citizens and residents of the States to have healthcare coverage.

The Act’s Injurious Impact on the Federal-State Healthcare Partnership

42. The Act greatly alters the federal-State relationship, to the detriment of the Plaintiff States, with respect to Medicaid programs, their insurance regulatory role, and healthcare coverage generally.

43. The Act transforms Medicaid from federal-State partnerships into a broad federally-controlled program that deprives the States of the ability to define healthcare program eligibility and attributes, and eliminates States’ historic flexibility to make cost-saving and other adjustments to their respective Medicaid programs. The Act also sets new increased Medicaid rates for primary-care practitioners’ reimbursements, which States must substantially fund, and changes the manner in which drug rebates are allocated between the federal government and States in a manner that financially benefits the federal government at the States’ expense.

44. The Act requires each State to expand massively its Medicaid program and to create a statewide exchange, which must be either a State governmental agency or a nonprofit entity established by the State for this purpose, through which the citizens and residents of that State can purchase healthcare insurance. If a State does not satisfy federal requirements to progress toward creation of an intrastate insurance exchange between now and the end of 2012, or chooses not to operate an exchange, the federal government (or its contractor) will establish and administer an intrastate exchange within that State. This action would displace State authority over a substantial segment of intrastate insurance regulation (e.g., licensing and regulation of intrastate insurers, plans, quality ratings, coordination with Medicaid and other State programs, and marketing) that the States have always possessed under the police powers provided in the Constitution, and subject the States to possible exchange-related penalties.

45. Participation in the Act will force the States to expand their Medicaid coverage to include all individuals under age 65 with incomes up to 133 percent of the federal poverty level. The federal government will fund much of the cost initially, but States’ coverage burdens will increase significantly after 2016, both in actual dollars and in proportion to the contributions of the federal government.

46. The Act further requires that States provide healthcare services to enrollees, a significant new obligation that goes far beyond the States’ pre-Act responsibility for funding healthcare services under their respective Medicaid programs. This obligation will expose the States to significant increased litigation risks and costs.

47. The federal government will not provide full funding or resources to the States to administer the Act. Each State must oversee the newly-created intrastate insurance market by instituting regulations, consumer protections, rate reviews, solvency and reserve fund requirements, and premium taxes. Each State also must enroll all of the newly-eligible Medicaid beneficiaries (many of whom will be subject to a penalty if they fail to enroll), coordinate enrollment with the new intrastate insurance exchange, and implement other specified changes. The Act further requires each State to establish a reinsurance program by 2014, to administer a premium review process, and to cover costs associated with State-mandated insurance benefit requirements that States previously could impose without assuming a cost.

48. In addition, the Act imposes new requirements on the Plaintiff States that interfere with their ability to perform governmental functions. Effective in 2014, the Plaintiff States, as large employers, must automatically enroll employees working 30 or more hours a week into health insurance plans, without regard for current State practice, policy preferences, or financial constraints. The Act’s individual mandate effectively will force many more State employees into State insurance plans than the Plaintiff States now allow, at a significant added cost to the States. Moreover, the States will be subject to substantial penalties and taxes prescribed by the Act, at a cost of thousands of dollars per employee, for State employees who obtain subsidized insurance from an exchange instead of from a State plan, or if the State plan offers coverage that is either too little or too generous as determined by the federal government. New tax reporting requirements prescribed by the Act also will burden the Plaintiff States’ ability to source goods and services as necessary to carry out governmental functions.

The Act’s Injurious Impact on Plaintiffs

49. The Act will have a profound and injurious impact on all Plaintiff States. Florida’s circumstances, as described below, are not identical to the circumstances in all of the Plaintiff States, but fairly represent the nature of the burdens the Act imposes on the Plaintiff States.

50. Based on United States Census Bureau statistics from 2008, Florida has 3,641,933 uninsured persons living in the State. Of those persons, 1,259,378 are below 133 percent of the federal poverty line; therefore, the Act requires that Florida add them to its Medicaid rolls.

51. Even before passage of the Act, the Medicaid program imposed a heavy cost on Florida, consuming 26 percent of its annual budget. For fiscal year 2009-2010 alone, Florida will spend more than $18 billion on Medicaid, servicing more than 2.7 million persons. Florida’s Medicaid contributions and burdens, from the implementation of its Medicaid program in 1970 to the present, have gradually increased to the point where it would be infeasible for Florida to cease its participation in Medicaid before the Act takes effect and make alternate arrangements for a traditional Medicaid-like program.

52. The federal government currently contributes 67.64 percent of every dollar Florida spends on Medicaid, a percentage that is temporarily inflated because of federal stimulus outlays. Under the current pre-Act program, after this year, the percentage of Florida’s Medicaid expenses covered by the federal government would decline, and by 2011 would reach 55.45 percent, a level that is closer to the recent average. The federal government’s contribution under the Act, though providing more aid for newly-eligible persons, will not fully compensate Florida for the dramatic increase to its Medicaid rolls, increased reimbursement rates for primary-care practitioners, and other substantial costs that it must bear under the Act.

53. Florida’s Agency for Health Care Administration (AHCA) estimates that at least 80 percent of persons who have some form of health insurance but fall below 133 percent of the federal poverty level will drop their current plans and enroll in Medicaid, because they are newly eligible under the Act. The Act does not provide full funding for the States’ cost of covering these already-covered persons. These persons represent a significant additional cost to Florida under the Act.

54. The Act also makes a large new class of persons eligible for Medicaid in Florida. Prior to passage of the Act, only certain specified low-income individuals and families qualified for Medicaid. Moreover, the qualifying income level set by Florida was generally much lower than the level of 133 percent of the federal poverty line set by the federal government under the Act. Now, Florida also must add to its Medicaid rolls every childless adult whose income falls below 133 percent of the federal poverty line, consistent with the Act’s fundamental change in Medicaid from a federal-State partnership to provide a safety net for the needy into a federally-imposed regime for universal healthcare coverage.

55. Prior to passage of the Act, AHCA was Florida’s designated State Medicaid agency tasked with developing and carrying out policies related to the Medicaid program. The Act will strip away much of the State’s authority to establish and execute policies, transferring that authority to the federal government. Indeed, the Act renders AHCA and other Florida agencies mere arms of the federal government and commandeers and forces AHCA employees to administer what now is essentially a federal universal healthcare program.

56. AHCA projects a cost to Florida in the billions of dollars between now and 2019, stemming from Medicaid-related portions of the Act. The annual cost will continue to grow in succeeding years. AHCA’s projections, moreover, understate the Act’s adverse impact on Florida. They do not include estimated costs to be borne by Florida to administer the Act or to prepare for the Act’s implementation. Such costs will include hiring and training new staff, creating new information technology infrastructures, developing an adequate provider base, creating a scheme for accountability and quality assurance, and incurring many other expenses.

57. The Act requires that Florida immediately begin to devote funds and other resources to implement sweeping changes across multiple agencies of government. Such implementation burdens include, but are not limited to: a) enforcing the Act’s immediately-effective terms; b) determining gaps between current resources in State government and the Act’s requirements; c) evaluating infrastructure to consider how new programs and substantial expansion of existing programs will be implemented (e.g., new agencies, offices, etc.); d) developing a strategic plan and coordinating common issues across State agencies; e) initiating legislative and regulatory processes, while at the same time monitoring and engaging the substantial federal regulatory processes to ensure that State interests are protected; f) electing whether to participate in optional programs set forth in the Act; g) satisfying the Act’s interim targets; and h) developing a communications structure and plan to disseminate new information regarding changes brought about by the Act to the many affected persons and entities.

58. The Act further requires Florida to enroll in healthcare insurance plans categories of State employees not previously covered by State-funded healthcare insurance plans. The Act subjects the State to penalties, depending upon the coverage decisions made by its employees, and limits the State’s ability to determine coverage. If the State’s plan for its employees is deemed inadequate by the federal government, the State will be subject to penalties. If the State’s plan is deemed too generous or expansive by the federal government, the State will be subject to a distinct federal tax liability.

59. The Act also requires that Florida be responsible for providing healthcare services for all Medicaid enrollees in the expanded program, a significant change from Florida’s responsibility for providing payment for such services. This added responsibility and resulting new legal liabilities further contribute to the Act’s substantial and costly impact on Florida’s fisc, and will force the State to ignore other critical needs, including education, corrections, law enforcement, and more.

60. In sum, as demonstrated through the effects on Florida, the Act infringes on the Plaintiff States’ constitutional status as sovereigns, entitled to cooperate with but not to be controlled by the federal government under the Medicaid program.

61. In addition, the Act will have a profound and injurious impact on the Plaintiff States’ citizens and residents, a significant number of whom are or will be subject to the Act’s mandate to obtain qualifying healthcare coverage or pay a penalty.

62. The Act further will have a profound and injurious impact on NFIB’s individual members and its uninsured small business owners, including Ms. Brown, who are and will continue to be subject to the Act’s mandate to obtain qualifying healthcare coverage or pay a penalty. Because of the mandate, these members will be forced to divert resources from their business endeavors, or otherwise to reorder their economic circumstances, in order to obtain qualifying healthcare coverage, regardless of their own conclusions on whether or not obtaining and maintaining such coverage for themselves and their dependents is a worthwhile cost of doing business. The added costs of the mandate will threaten the members’ ability to maintain their own, independent businesses.

63. An important service offered by NFIB to its membership is the provision of information and assistance regarding legal and regulatory compliance issues faced by small businesses, as well as questions involving healthcare insurance and benefits. In order fully to serve the needs and interests of its membership, NFIB now will be forced to devote its own scarce resources to assisting members in understanding how the Act, including the mandate to obtain qualifying coverage or pay a penalty, applies to them, how it will affect their businesses, and what they must do to comply.

64. The Act also will injure Mr. Ahlburg, who will be subject to the Act’s mandate to obtain qualifying healthcare coverage or pay a penalty.

The Act’s Requirements and Effects on the Plaintiff States Cannot Be Avoided

65. Plaintiff States cannot avoid the Act’s requirements. Neither the Act nor current federal Medicaid provisions prescribe a mechanism for a State to opt out of the Act’s new Medicaid requirements, to opt out of Medicaid generally, or to transition to another program that provides only traditional Medicaid services.

66. Moreover, if they were to end their longstanding participation in Medicaid, Plaintiff States would desert millions of their residents, leaving them without access to the healthcare services they have depended on for decades under Medicaid. Thus, Plaintiff States are forced to accept the harmful effects of the Act on their fiscs and their sovereignty.

67. Prior to passage of the Act, Medicaid and its corresponding law, regulations, guidance, policies, and framework had been well-established, subject to occasional limited modifications, for more than four decades. During that time, participating States developed their respective Medicaid programs in reliance on Medicaid continuing to be a partnership with the federal government.

68. Presently, the Centers for Medicare and Medicaid (CMS), the federal agency with chief responsibility for administering Medicaid for the federal government, will terminate a State’s federal funding for Medicaid unless the State complies with the Act’s requirements. In addition, Medicaid requirements are linked to other federal programs, and the benefits of those programs to a State and its citizens and residents would be in jeopardy if the federal government were to terminate the State’s participation in Medicaid.

CAUSES OF ACTION COUNT ONE UNCONSTITUTIONAL MANDATE THAT ALL INDIVIDUALS HAVE HEALTHCARE INSURANCE COVERAGE OR PAY A PENALTY
(Const. art. I & amend. IX, X)

69. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

70. The Act forces all Americans, including NFIB members and the Individual Plaintiffs, regardless of whether they want healthcare coverage, to obtain and maintain a federally-approved level of coverage or pay a penalty. The Act thus compels all Americans to perform an affirmative act or incur a penalty, simply on the basis that they exist and reside within any of the United States. In so doing, the Act purports to exercise the very type of general police power the Constitution reserves to the States and denies to the federal government.

71. The Act is directed to a lack of, or failure to engage in, activity that is driven by the choices of individual Americans. Such inactivity by its nature cannot be deemed to be in commerce or to have such an effect on commerce, whether interstate or otherwise, as to be subject to Congress’s powers under the Commerce Clause, Const. art. I, § 8. Nor does the Act regulate (directly or indirectly) any properly regulable interstate or foreign market or other commerce, any instrumentality of interstate or foreign commerce, or the actual flow of goods, services, and human beings among the States. As a result, the Act cannot be upheld under the Commerce Clause.

72. The Act infringes upon Plaintiff States’ sovereign interests by coercing many persons to enroll in an expanded Medicaid program at a substantial cost to Plaintiff States, or to obtain coverage from intrastate exchanges that States must establish to avoid loss of substantial regulatory authority. The Act also denies Plaintiff States their sovereign ability to confer rights upon their citizens and residents to make healthcare decisions without government interference, including the decision not to participate in any healthcare insurance program or scheme, in violation of the Ninth and Tenth Amendments to the Constitution and the constitutional principles of federalism and dual sovereignty on which this Nation was founded.

73. The Act’s penalty on uninsured persons unlawfully coerces persons to obtain healthcare coverage without purposing to raise revenue and injures the Plaintiff States’ fiscs, because many persons will be compelled to enroll in Medicaid at a substantial cost to Plaintiff States or to get coverage from intrastate exchanges that Plaintiff States must establish to avoid loss of substantial regulatory authority. As a result, the Act cannot be upheld under the Taxing and Spending Clause, Const. art. I, § 8.

74. By requiring and coercing citizens and residents of the Plaintiff States to have healthcare coverage, the Act exceeds Congress’s limited powers enumerated in Article I of the Constitution, and cannot be upheld under any other provision of the Constitution.

75. By requiring and coercing citizens and residents of the Plaintiff States to have healthcare coverage, the Act deprives those citizens and residents, and NFIB members and the Individual Plaintiffs, of their rights under State law to make personal healthcare decisions without governmental interference, and violates the rights of the States as sovereigns to confer and define such rights in their constitutions or by statute, in violation of the Ninth and Tenth Amendments to the Constitution and the constitutional principles of federalism and dual sovereignty on which this Nation was founded.

WHEREFORE, Plaintiffs respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare that the individual mandate exceeds Congress’s authority under Article I of the Constitution and violates the Ninth and Tenth Amendments;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against the Plaintiff States, including their agencies, officials, and employees; the citizens and residents of the Plaintiff States; NFIB members and small business owners; and the Individual Plaintiffs, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award Plaintiffs their costs and grant such other relief as the Court may deem just and proper.

COUNT TWO UNCONSTITUTIONAL MANDATE THAT ALL INDIVIDUALS HAVE HEALTHCARE INSURANCE COVERAGE OR PAY A PENALTY
(Const. amend. V)

76. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

77. The Act forces citizens and residents of the Plaintiff States, including NFIB members and the Individual Plaintiffs, to obtain and maintain a federally-approved level of health coverage for themselves and their dependents, regardless of whether they want or need that coverage, or pay a penalty.

78. By requiring and coercing NFIB’s members and the Individual Plaintiffs to obtain and maintain such healthcare coverage, the Act deprives them of their right to be free of unwarranted and unlawful federal government compulsion in violation of the Due Process Clause of the Fifth Amendment to the Constitution of the United States.

WHEREFORE, Plaintiffs respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare Defendants to have violated the rights of NFIB members and small business owners and the Individual Plaintiffs under the Due Process Clause of the Fifth Amendment;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against NFIB members and small business owners and the Individual Plaintiffs, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award NFIB and the Individual Plaintiffs their costs and grant such other relief as the Court may deem just and proper.

COUNT THREE VIOLATION OF CONSTITUTIONAL PROHIBITION OF
UNAPPORTIONED CAPITATION OR DIRECT TAX
(Const. art. I, §§ 2, 9 & amends. IX, X)

79. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

80. Alternatively, the penalty on uninsured persons under the Act constitutes a capitation and a direct tax that is not apportioned among the States according to census data, thereby injuring the sovereign interests of Plaintiff States and the interests of all citizens and residents of the Plaintiff States and of the United States.

81. The tax applies without regard to property, profession, or any other circumstance, and is unrelated to any taxable event or activity. It is to be levied upon persons for their failure or refusal to do anything other than to exist and reside in any of the States comprising the United States.

82. The tax violates article I, sections 2 and 9 of, and the Ninth and Tenth Amendments to, the Constitution. The Act’s imposition of the tax, and the resulting coercion of many persons either to enroll in an expanded Medicaid program at a substantial cost to the Plaintiff States or to get coverage from intrastate exchanges that States must establish to avoid loss of substantial regulatory authority, injures Plaintiff States’ sovereign interests and violates the States’ constitutional protection against unapportioned capitation taxes or direct taxation. The tax also infringes on the right of NFIB members and the Individual Plaintiffs to be free from unconstitutional taxation. The tax is unconstitutional on its face and cannot be applied constitutionally.

WHEREFORE, Plaintiffs respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare Defendants to have violated the Plaintiff States’ constitutional protection against unapportioned capitation taxes or direct taxation, and to have violated the rights of all citizens and residents of the Plaintiff States and of the United States, including NFIB members and small business owners and the Individual Plaintiffs, to be free from unconstitutional taxation;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against the Plaintiff States, including their agencies, officials, and employees; the citizens and residents of the Plaintiff States; NFIB members and small business owners; and the Individual Plaintiffs, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award Plaintiffs their costs and grant such other relief as the Court may deem just and proper.

COUNT FOUR COERCION AND COMMANDEERING AS TO MEDICAID
(Const. art. I & amends. IX, X)

83. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

84. Plaintiff States cannot afford the unfunded costs of participating under the Act, but effectively have no choice other than to participate.

85. The Act exceeds Congress’s powers under Article I of the Constitution, and cannot be upheld under the Commerce Clause, Const. art. I, §8; the Taxing and Spending Clause, id.; or any other provision of the Constitution.

86. By using Medicaid to reach universal healthcare coverage goals and forcing fundamental changes in the nature and scope of the Medicaid program upon the Plaintiff States, by denying Plaintiff States any choice with respect to new Medicaid requirements and denying them flexibility to limit the fiscal impact of those changes, by effectively co-opting Plaintiff States’ control over their budgetary processes and legislative agendas through compelling them to assume costs they cannot afford, by forcing Plaintiff States to become responsible for providing healthcare services for all Medicaid enrollees, by requiring Plaintiff States to carry out insurance mandates and establish intrastate insurance programs and regulations for federal purposes, by interfering in the Plaintiff States’ relationships with their employees with respect to healthcare coverage, by commandeering the Plaintiff States and their employees as agents of the federal government’s regulatory scheme at the States’ own cost, and by interfering in the Plaintiff States’ sovereignty, the Act violates Article IV, section 4 of the Constitution, depriving Plaintiff States of their sovereignty and their right to a republican form of government; violates the Ninth and Tenth Amendments; and violates the constitutional principles of federalism and dual sovereignty on which this Nation was founded.

WHEREFORE, Plaintiff States respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare that the Act exceeds Congress’ powers under Article I of the Constitution and interferes in the Plaintiff States’ sovereignty in violation of the Ninth and Tenth Amendments and constitutional principles of federalism and dual sovereignty;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against the Plaintiff States, their citizens and residents, and any of their agencies or officials or employees, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award Plaintiff States their costs and grant such other relief as the Court may deem just and proper.

COUNT FIVE COERCION AND COMMANDEERING AS TO HEALTHCARE INSURANCE
(Const. art. I & amends. IX, X)

87. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

88. By requiring the Plaintiff States to carry out insurance mandates and establish intrastate insurance programs for federal purposes under threat of removing or significantly curtailing their long-held regulatory authority as to intrastate insurance, and by commandeering the Plaintiff States and their employees as agents of the federal government’s regulatory scheme at the States’ own cost, the Act exceeds Congress’s powers under Article I of the Constitution, and interferes in the Plaintiff States’ sovereignty in violation of the Ninth and Tenth Amendments and the constitutional principles of federalism and dual sovereignty on which this Nation was founded.

WHEREFORE, Plaintiff States respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare that the Act exceeds Congress’ powers under Article I of the Constitution and interferes in the Plaintiff States’ sovereignty in violation of the Ninth and Tenth Amendments and constitutional principles of federalism and dual sovereignty;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against the Plaintiff States, their citizens and residents, and any of their agencies or officials or employees, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award Plaintiff States their costs and grant such other relief as the Court may deem just and proper.

COUNT SIX INTERFERENCE WITH THE STATES’ SOVEREIGNTY AS EMPLOYERS AND PERFORMANCE OF GOVERNMENTAL FUNCTIONS
(Const. art. I & amends. IX, X)

89. Plaintiffs reallege, adopt, and incorporate by reference paragraphs 1 through 68 above as though fully set forth herein.

90. By imposing new employer healthcare insurance mandates on the Plaintiff States, by requiring that they automatically enroll and continue enrollment of employees in healthcare plans, by subjecting States to penalties and taxes depending upon plan attributes and individual employee coverage decisions, and by burdening the States’ ability to procure goods and services and to carry out governmental functions, the Act exceeds Congress’s powers under Article I of the Constitution, and interferes in the Plaintiff States’ sovereignty in violation of the Ninth and Tenth Amendments and the constitutional principles of federalism and dual sovereignty on which this Nation was founded.

WHEREFORE, Plaintiff States respectfully request that the Court:
A. Declare the Patient Protection and Affordable Care Act, as amended, to be unconstitutional;
B. Declare that the Act exceeds Congress’s powers under Article I of the Constitution, and interferes in the Plaintiff States’ sovereignty in violation of the Ninth and Tenth Amendments and constitutional principles of federalism and dual sovereignty;
C. Enjoin Defendants and any other agency or employee acting on behalf of the United States from enforcing the Act against the Plaintiff States, their citizens and residents, and any of their agencies or officials or employees, and to take such actions as are necessary and proper to remedy their violations deriving from any such actual or attempted enforcement; and
D. Award Plaintiff States their costs and grant such other relief as the Court may deem just and proper.

Respectfully submitted,
BILL MCCOLLUM
ATTORNEY GENERAL OF FLORIDA
HENRY McMASTER
ATTORNEY GENERAL OF SOUTH
CAROLINA;
JON BRUNING
ATTORNEY GENERAL OF
NEBRASKA;
GREG ABBOTT
ATTORNEY GENERAL OF TEXAS;
MARK L. SHURTLEFF
ATTORNEY GENERAL OF UTAH;
JAMES D. “BUDDY” CALDWELL
ATTORNEY GENERAL OF
LOUISIANA;
TROY KING
ATTORNEY GENERAL OF ALABAMA;
MICHAEL A. COX
ATTORNEY GENERAL OF
MICHIGAN;
JOHN W. SUTHERS
ATTORNEY GENERAL OF
COLORADO;
THOMAS W. CORBETT, Jr.
ATTORNEY GENERAL OF
PENNSYLVANIA;
ROBERT M. McKENNA
ATTORNEY GENERAL OF
WASHINGTON;
LAWRENCE G. WASDEN
ATTORNEY GENERAL OF IDAHO
MARTY J. JACKLEY
ATTORNEY GENERAL OF SOUTH
DAKOTA
GREGORY F. ZOELLER
ATTORNEY GENERAL OF INDIANA
WAYNE STENEHJEM
ATTORNEY GENERAL OF NORTH
DAKOTA
HALEY BARBOUR
GOVERNOR OF MISSISSIPPI
JANICE K. BREWER
GOVERNOR OF ARIZONA
JIM GIBBONS
GOVERNOR OF NEVADA
SONNY PERDUE
GOVERNOR OF GEORGIA
DANIEL S. SULLIVAN
ATTORNEY GENERAL OF ALASKA
NATIONAL FEDERATION OF
INDEPENDENT BUSINESS
MARY BROWN
KAJ AHLBURG
/s/ Blaine H. Winship
Blaine H. Winship (Fla. Bar No. 0356913)
Assistant Attorney General
Joseph W. Jacquot (Fla. Bar No. 189715)
Deputy Attorney General
Scott D. Makar (Fla. Bar No. 709697)
Solicitor General
Louis F. Hubener (Fla. Bar No. 0140084)
Timothy D. Osterhaus (Fla. Bar No.
0133728)
Charles B. Upton II (Fla. Bar No. 0037241)
Deputy Solicitors General
Office of the Attorney General of Florida
The Capitol, Suite PL-01
Tallahassee, Florida 32399-1050
Telephone: (850) 414-3300
Facsimile: (850) 488-4872
Email: blaine.winship@myfloridalegal.com
Attorneys for Plaintiff States
David B. Rivkin (D.C. Bar No. 394446)
Lee A. Casey (D.C. Bar No. 447443)
Baker & Hostetler LLP
1050 Connecticut Avenue, N.W., Ste. 1100
Washington, DC 20036
Telephone: (202) 861-1731
Facsimile: (202) 861-1783
Attorneys for Plaintiff States, National
Federation of Independent Business, Mary
Brown, and Kaj Ahlburg
Katherine J. Spohn
Special Counsel to the Attorney General
Office of the Attorney General of Nebraska
2115 State Capitol Building
Lincoln, Nebraska 68508
Telephone: (402) 471-2834
Facsimile: (402) 471-1929
Email: katie.spohn@nebraska.gov
Attorneys for Plaintiff the State of Nebraska
Karen R. Harned William J. Cobb III
Executive Director Special Assistant and Senior Counsel
National Federation of Independent to the Attorney General
Business Office of the Attorney General of Texas
Small Business Legal Center P.O. Box 12548, Capitol Station
1201 F Street, N.W., Suite 200 Austin, Texas 78711-2548
Washington, DC 20004 Telephone: (512) 475-0131
Telephone: (202) 314-2061 Facsimile: (512) 936-0545
Facsimile: (202) 554-5572 Email: bill.cobb@oag.state.tx.us
Of counsel for Plaintiff National Attorneys for Plaintiff the State of Texas
Federation of Independent Business
CERTIFICATE OF SERVICE
I hereby certify that, on this 14th day of May, 2010, a copy of the foregoing Amended Complaint was served on counsel of record for all Defendants through the Court’s Notice of Electronic Filing system.
/s/ Blaine H. Winship
Blaine H. Winship
Assistant Attorney General
Office of the Attorney General of Florida

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Obamatax

President Obama pledged during his 2008 campaign that middle-class families would not see a tax increase of any kind.

Democrats want Americans to believe that by letting tax rates rise they have discovered religion as deficit cutters. But after a two-year assault on the federal trough in which Congress passed the notoriously wasteful stimulus and added a new health care entitlement, few Americans are even bothering to listen. In reality, the harm this tax increase will inflict on jobs and gross domestic product will strongly outweigh any presumed boost in tax revenues.

American businesses are sitting on top of a record $2 trillion in cash — money that could be spent hiring more workers, funding new projects or paying out dividends to investors. But right now these dollars remain stuck on the sidelines.

Already grappling with weak demand for goods and services, businesses of all sizes have five main costs and expenses that impact their bottom lines. Thanks to the agenda in Washington, all are going up, turning the White House’s much-touted “Recovery Summer” into the “Summer of Uncertainty.” Here’s a look:

•Taxes will jump next year on everything from ordinary income, capital gains, dividends and estates. And with our national debt soaring, the prospect of even more tax increases in the future seems more likely.

•Health-care costs are growing as a result of Obamacare’s mandates and inflationary impact on premiums.

•Energy costs remain in limbo as leading Democrats, led by Sen. John Kerry, float the idea of passing cap-and-trade during the lame-duck session of Congress.

•Credit is becoming more expensive and is increasingly out of reach for most small businesses, partly because the 2,300-plus page financial regulatory bill encourages banks to horde their capital rather than lend it.

•Labor costs also threaten to climb higher as labor unions dig in their heels and gear up for another push to pass card check.

Critics repeatedly have accused Obama of violating that pledge and with the Bush tax cuts set to expire unless Congress acts before Jan. 1, a look back at the administration’s statements shows a gradual softening in their tax rhetoric. The president in February went so far as to say he’s “agnostic” on the issue in the context of closing the deficit. The White House, though, is still pressing for a continuation of the Bush tax cuts for the middle class.

In just 120 days, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
– The 10% bracket rises to an expanded 15%
– The 25% bracket rises to 28%
– The 28% bracket rises to 31%
– The 33% bracket rises to 36%
– The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care tax credit will be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors. The top capital gains tax will rise from 15 percent this year to 20 percent in 2011. The top dividends tax rate will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The Tanning Tax. This went into effect on July 1st of this year. It imposes a new, 10% excise tax on getting a tan at a tanning salon. There is no exemption for tanners making less than $250,000 per year.
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Brand Name Drug Tax. Starting next year, there will be a multi-billion dollar tax assessment imposed on name-brand drug manufacturers. This tax, like all excise taxes, will raise the price of medicine, hurting everyone.
Economic Substance Doctrine. The IRS is now empowered to disallow perfectly-legal tax deductions and maneuvers merely because it judges that the deduction or action lacks “economic substance.” This is obviously an arbitrary empowerment of IRS agents.
Employer Reporting of Health Insurance Costs on a W-2. This will start for W-2s in the 2011 tax year. While not a tax increase in itself, it makes it very easy for Congress to tax employer-provided healthcare benefits later.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Until this year, a retired person with an IRA could contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.

The following is a review of the evolution of the administration’s tax platform:

Sept. 12, 2008: Speaking before a New Hampshire crowd, Obama promised to shield middle-class families from a tax increase.

“And I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase,” he said. “Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

June 28, 2009: In an interview on ABC’s “This Week,” White House senior adviser David Axelrod was asked whether Obama would veto any health care bill with a tax increase for those making less than $250,000 a year. Axelrod said Obama’s plan would keep with his tax promise but he would not directly answer the question, which concerned a Senate proposal to cap deductions.

“One of the problems we’ve had in this town is that people draw lines in the sand and they stop talking to each other. And you don’t get anything done,” he said “(Obama) is very cognizant of protecting people — middle-class people, hard-working people who are trying to get along in a very difficult economy. And he will continue to represent them in these talks. But they’re also dealing with punishing health care costs, and that’s something that we have to deal with.”

June 29, 2009: White House Press Secretary Robert Gibbs declined to clarify Axelrod’s comments when asked repeatedly about them at the press briefing.

“The good news is we’re making significant progress, and all those people are still sitting at the table. We haven’t drawn a lot of bright lines,” Gibbs said. “We’re going to allow that process to continue … in order to make progress.”

Aug. 2, 2009: In an interview on “This Week,” Treasury Secretary Tim Geithner was asked about Obama’s tax pledge and whether he’d be able to keep it in light of the need to reduce the deficit.

“We can’t make these judgments yet about what exactly it’s going to take and we’re going to get there,” Geithner said. “I think what the country needs to do is understand we’re going to have to do what it takes, we’re going to do what’s necessary.”

Aug. 2, 2009: In an interview on NBC’s “Meet the Press,” White House economic adviser Larry Summers also left the door open on the tax question.

“There is a lot that can happen over time,” Summers said.”It is never a good idea to absolutely rule things out, no matter what.”

Aug. 3, 2009: In damage control mode, Gibbs restated and stood by Obama’s tax pledge when asked about Summers’ and Geithner’s comments.

“The president’s clear commitment is not to raise taxes on those making less than $250,000 a year,” Gibbs said. “I am reiterating the president’s clear commitment in the clearest terms possible, that he’s not raising taxes on those who make less than $250,000 a year.”

Sept. 20, 2009: Obama got in a spat with host George Stephanopoulos during an interview on “This Week” Stephanopoulos suggested that the proposed fines against those who don’t purchase health insurance as required by the new health care package amount to a tax on the middle class. Obama disputed that point.

“It’s still a tax increase,” Stephanopoulos said.

“No. That’s not true,” said Obama. “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. … You can’t just make up that language and decide that that’s called a tax increase.”

Stephanopoulos then read aloud the dictionary definition of “tax” to the president of the United States.

Obama responded: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now.”

“But you reject that it’s a tax increase?” the host asked.

“I absolutely reject that notion,” Obama said.

Nov. 1, 2009: In another “This Week” interview, senior adviser Valerie Jarrett was asked whether Obama would veto any health care package that violates the tax pledge, in reference to one proposal that would tax high-value insurance plans.

“Let’s hold off prejudging what it’s going to do. But the president has been clear, he does not want to impose a tax on the middle class,” she said.

Pressed again, Jarrett said: “What I’m saying is that he is confident that a bill that’s going to be passed is going to be consistent with his parameters.”

Feb. 9, 2010: Obama said in an interview with Bloomberg BusinessWeek that he could be “agnostic” on raising middle-class taxes. He was referring to a newly formed commission tasked with examining ways to bring down the deficit.

“The whole point of it is to make sure that all ideas are on the table,” Obama said. “So what I want to do is to be completely agnostic, in terms of solutions.”

He added: “What I can’t do is to set the thing up where a whole bunch of things are off the table. … Some would say we can’t look at entitlements. There are going to be some that say we can’t look at taxes, and pretty soon, you just can’t solve the problem.”

July 27, 2010: Gibbs said at his daily press briefing that the issue of the Bush tax cuts came up during a meeting with congressional leaders. He repeated Obama’s pledge.

“The president said that, as he had committed to in the campaign, he would not allow the tax cuts for the middle class to expire,” Gibbs said. He explained that Obama is not arguing for extending the Bush tax cuts for the wealthy but wants the middle-class cuts to be “preserved.”

“I believe the president believes that raising taxes on the middle class during this economic time would not make a lot of economic sense,” he said. “And I think if you go back to the campaign, the president made that pledge not simply to make that pledge, but to make that pledge because for years and years and years we’d watched jobs being shed, wages either flat or declining, and that now is neither the time nor the place to raise taxes on them.”

Sept. 8, 2010: As the debate over extending the Bush tax cuts heated up, Obama used an economic speech in Ohio to accuse Republicans of holding the middle class “hostage” by demanding an extension of all the Bush tax cuts.

“Now, I believe we ought to make the tax cuts for the middle class permanent,” Obama said. “But the Republican leader of the House doesn’t want to stop there. Make no mistake — He and his party believe we should also give a permanent tax cut to the wealthiest 2 percent of Americans. … We should not hold middle-class tax cuts hostage any longer. We are ready, this week, if they want, to give tax cuts to every American making $250,000 or less.”

Sept. 9, 2010: Obama was asked during an ABC News interview whether he would support a two-year extension of all the Bush tax cuts — representing a compromise with Republicans. Without answering directly, the president suggested that would not be a “smart thing” for the economy. Asked again, Obama said the reason the tax cut package hasn’t passed is because “we haven’t seen compromise from the other side.”

The president then repeatedly declined to answer the question of whether he would veto such a short-term extension of all tax cuts.

Sept. 30, 2010: Congress adjourned without a vote on the Bush tax cuts. The same day, Gibbs said at his daily press briefing that, even though dozens of House Democrats pushed for an across-the-board extension, the reason the House never took up a tax cut bill was “because the Republicans said they weren’t going to do it.”

The Heritage Foundation Center for Data Analysis has estimated the impacts of the Obama tax hikes and found they would: 1) decrease inflation-adjusted gross domestic product (GDP) by $1.1 trillion by 2020; 2) decrease business investment by $33 billion a year; 3) decrease personal savings by $38 billion in 2011 alone; 4) decrease consumer spending by $706 billion through 2020; and 5) kill an average of 693,000 jobs a year through 2020.

The CDA has even broken down these impacts by state and congressional district. You can find the state-by-state and district-by-district results here (in the right hand column). West Virginians will see their individual income taxes rise by $1.6 billion. Nevadans will lose $2,697 per household in disposable income. And Wisconsin will lose 14,083 jobs annually. The stakes are high. Click through and find out How the Obama Tax Hikes Affect You.

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