Obama’s Health Care Tax Explanation: Doesn’t Pass the Laugh Test

J.D. Foster / September 30, 2009

The White House put out talking points on Tuesday in an attempt to deflect the debate on the multitude of tax increases in the health care plan working through the Senate Finance Committee. These tax increases almost uniformly violate (again) the President’s plan not to raise taxes on middle-income Americans.

The White House asserts that fees on insurance companies, drugmakers, devicemakers, etc. won’t be passed on to consumers as a hidden tax. They offer three explanations.

“First, the fees are lump sum, not per unit, so you should not expect the manufacturers to pass them on”.

This argument does not pass the laugh test. Fees become costs and cost are passed on in higher prices. Apparently, the White House does not believe the accountants at these companies are capable of the simple calculation of spreading a fee over a number of devices or policyholders. And apparently the White House believes shareholders of these companies are willing to accept without reaction to the federal government digging deeper into wallets. (more…)