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Curmudgeon's Corner

cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner

Loopholes?

Healthcare, Economy, Political, Taxes, Quality of Life, U.S.

ObamaCare is right around the corner, at least so far as the taxes go that were created to pay part of the cost.  Some of ObamaCare is here now with the raising of the age for dependents to be covered under a parent’s plan, for example.   Most of the rest of ObamaCare doesn’t hit until 2014 and after.

This coincides with the ongoing ‘debate’ over the fiscal cliff that is supposedly occurring in Washington, D.C.  I say ‘supposedly’ since there is frankly little evidence there is anything like a debate going on.  Our President has successfully boxed the Republican House into a corner with the aid and assistance of the mainstream media and the Democratic-controlled Senate.  Republicans, at best, are reduced to negotiating amongst themselves (or maybe that is better called ‘bickering’ amongst themselves).

That having been said, there is now discussion going on concerning current tax breaks being eliminated or significantly reduced in order to find the money necessary to ameliorate the problems of too little income and too much spending.  Those pesky “loopholes” are in the crosshairs now.  Those loopholes are things like mortgage interest payments continuing to be deductible.  That loophole being eliminated would result in some $90 Billion dollars being further extracted from the pockets of those who are still paying for their homes.

Since ObamaCare is all about health care costs being covered and about requiring everyone to have coverage of at least the minimum essential actuarial value (the Bronze plan), might it make sense to look at another loophole?  That loophole is being openly discussed on Capitol Hill and it involves the potential of taxing the employer payment for employee health plans, an amount that is not now taxable to the employee…or a loophole as it were.

If that loophole (hardly seems like a loophole to those receiving the benefit any more than  making mortgage interest go away as a deduction seems like a loophole) were to be eliminated, it would result in some $150 Billion coming in to the federal coffers.  This loophole elimination would hit every taxpayer/taxpayer family that currently receives health care coverage through employment.  I suspect, however, that Congress might find a way to exclude itself from this loophole closing just as it has from being impacted by all of ObamaCare.

We have very little idea of the magnitude of the shift that is about to occur, and we probably won’t until it has been put into place and we actually see what its real impact amounts to when the next tax bill becomes due and payable.  And, of course, by then it is too late since laws will have been made and etched in stone.  And our government will be no closer to reducing its egregious spending habits than it ever was; and, may still be looking to find ways to get more money from our pockets.

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