Maine Governor Has Had a Chance To Re-Think His ‘Gestapo = IRS’ Comment
As we mentioned earlier, Maine Governor Paul LePage created a bit of a hubbub when he made the following statement about John Roberts' the Supreme Court's decision to uphold the healthcare reform law: "This decision has made America less free. We the people have been told there is no choice. You must buy health insurance […]
Apparently This ObamaCare Thing Is a Big Deal But May or May Not Be a Tax
Unlike many pundits, wonks and keyboard ninjas out there, I feel it is important to refrain from spouting off about ObamaCare at this point since I am neither a Constitutional law expert nor all that well-versed in decoding hundreds of pages of legislation. It wasn't just second rate bloggers getting the news wrong yesterday, of […]
How Will the Senate Screw Up the 1099 Repeal Bill This Time?
The upper chamber is making yet another run at repealing the 1099 requirement that was part of the healthcare overhaul despite miserable failures in the past.
The Hill reports that the new bill has 52 co-sponsors which lead you to believe that this time, repeal will be a cinch:
Senators reintroduced bills that would eliminate the 1099 requirement for businesses to report annual purchases of at least $600 from each vendor. Most Democrats, including the Obama administration, support repealing the provision, but lawmakers have clashed over how to offset the $19 billion in lost revenue.
A bill introduced Tuesday by Sens. Mike Johanns (R-Neb.) and Joe Manchin (D-W. Va.) authorizes the Office of Management and Budget to identify unobligated federal funds to cover the cost of repeal.
“It’s a bad policy; it hurts businesses and it should be repealed, enough said,” Johanns said in a conference call with reporters.
The measure has 52 co-sponsors including 12 Democrats: Sens. Mark Begich (Alaska), Michael Bennet (Colo.), Maria Cantwell (Wash.), Kay Hagan (N.C.), Amy Klobuchar (Minn.), Manchin, Ben Nelson (Neb.), Mark Pryor (Ark.), Debbie Stabenow (Mich.), Jon Tester (Mont.), Mark Udall (Colo.), Mark Warner (Va.).
With such an overwhelming show of bipartisan support the only issue now is who will get the credit for saving small business as we know it?
Both parties have seized on the 1099 requirement to score political points. Republicans are posing repeal of 1099 as part of their promise to chip away at the reform law, while Democrats are touting it as a sign of their willingness to improve the current law.
Just for the sake of spiteful mischief, we’re hoping this goes nowhere (any and all theories on how they manage to do that are encouraged). Stay tuned!
Senators introduce bipartisan 1099 repeal bill [On the Money/The Hill]
John Boehner Would Prefer If Some People Took Their Bellyaching About the 1099 Requirement Elsewhere
It seems that everyone and their dog is staking a claim as the biggest enemy of the 1099 requirement that was part of the healthcare reform law that passed last year. The latest self-proclaimed champions of small business are a few Senate Democrats who wish John Boehner would quit sitting on his orange hands and get a bill moving in the House, because let’s face it, the repeal passed by the House is going nowhere fast.
The Speaker is not deterred however, and his spokesman would like to remind the Ds in the S, that they can S a D and should bring it up with someone else:
Michael Steel, a spokesman for Boehner, said the speaker also supports eliminating the 1099 requirement, but “it is far from the only job-destroying provision in Washington Democrats’ law.”
“Now that the House has passed a law to repeal it, the best course would be for the Senate to do the same, and I hope these senators are pressing Senate Majority Leader Reid to do just that,” said Steel.
Earlier:
Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate
Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate
Everyone’s favorite Two Minutes’ Hate from the healthcare reform legislation – the 1099 reporting requirement – managed to live to fight another day despite being as unpopular as the Democrats who originally got behind it (although don’t look at Nancy Pelosi).
As is the wont of Senate, this sliver of bipartisanship was foiled by…wait for it…politics:
The provision survived because of the complex politics of the Senate. Some lawmakers were reluctant to back repeal on Monday since the rule change would have been added to a popular food-safety law that is nearing approval, potentially jeopardizing its passage. In addition, dueling Democratic and Republican proposals allowed lawmakers to register their disapproval of the 1099 requirement whether the repeal passed or not.
In other words, everyone agrees that they hate this thing but they hate it in different ways. You see, it’s not enough to be against the 1099 requirement, it matters who gets the credit for being against so much that they actual introduced the proposal to do away with it.
Sigh. But it’s cool, the rule doesn’t actually go into effect until 2012, so blowing it off for another 12 months is totally an option. And a pretty realistic one, too.
Senators Cannot Agree on Fix to the Health Law [NYT via CPA Success]
Surprisingly, Glenn Beck Doesn’t Understand How the 1099 Requirement Works
Everyone agrees that the 1099 requirement in the healthcare overhaul sucks. It’s so unpopular that Max Baucus has taken it upon himself to ride in on the Senate chamber on a horse clad in shining armor with an amendment that will repeal the requirement pronto and single-handedly save small businesses everywhere.
But in the meantime, area man-cum-national fruitcake Glenn Beck thought he needed to warn all the eBay junkies out there that if don’t hock their stuff this year, they’ll be subject to the requirement next year:
Of course this is bullshit. Despite what GB might think about the national media, if this were in fact true, every outlet on the planet would have reported it already. The headlines would have screamed “WAR ON EBAY” and Meg Whitman could have campaigned on that (but probably still would’ve lost).
Anyhooo, just for good measure, The Hill’s Healthwatch also points out that Beck’s “exemption” claim is also false:
Beck also told his viewers on Tuesday’s show that “at least 111 companies have been declared exempt from having to use Obamacare.” In fact, the firms he refers to have been granted a one-year waiver from the requirement that their annual limit on coverage be at least $750,000.
“Exempt” versus “a one-year waiver.” Yeah, that’s almost the same thing.
Nancy Pelosi Will Have You Know That She Wasn’t Responsible for the New 1099 Requirement Sneaking into Healthcare Reform
“One item that I think we all agree on that was in the Senate bill, not in the House bill, but became part of the law was 1099, which affects small businesses and small contractors and how they report their transactions. They know what it means, and they know they’d like to see it go. I think that’s probably the first place we could go together.”
~ The soon-to-be former Speaker of the House is willing to talk about this one.
The AICPA Goes to Bat for Small Business; Requests Repeal of Expanded 1099 Reporting
In these pages last week, we brought up the expanded 1099 reporting requirements that could possibly bury some small busine ocumentation. The question remains, how big is this pile? Will it require a shovel to dig out of the pile of paper or a bulldozer?
Based on the AICPA’s letter to the U.S. Senate that made the rounds yesterday, it will require a team of angry Ohioans – all with their own dozer – to unbury small business owners.
Alan Einhorn, the Chair of the AICPA’s Tax Executive Committee wrote the letter and in extremely tactful terms, expresses his discontent, “[W]e believe section 9006 of the Act should be repealed because the provision imposes extremely burdensome information reporting requirements on business taxpayers that cannot be justified in terms of the limited utility such information reports will provide to government.”
Adrienne boils that down in a less tactful manner, “You don’t have to be a CPA to see why this is a completely moronic idea. What happened to paperwork reduction? I love the use of ‘extremely burdensome’ – as most of you probably know, it’s got to be REALLY annoying to get the accountants to bust out the ‘extremely’ in a complaint.”
She makes a good point. Not to get all English-y on you but the adverb “extremely” doesn’t exactly make it a more effective sentence. Alan was clearly going for exaggeration in order to get his point across that this portion of the Patient Protection and Affordable Care Act is the most useless section of the entire act. And for some of you, that’s really saying something.
AICPA Letter to Congress Supporting Repeal of Expanded 1099 Reporting by Businesses
That Orangey Glow Will Be a Little More Expensive Today as Tanning Tax Takes Effect
Everyone in the melanoma-for-sale business is perplexed about the tanning tax that goes into effect today and the Journal reports that the hella confusion is mostly about why some businesses are able to dodge the tax while others are not.
Case in point, health clubs get to offer their George Hamilton specials tax free while video stores (?) that offer tanning do not.
When Jeanne Chamberlain turns up at work Thursday, she’s going to have to grapple with America’s first federal tax on tanning services, a 10% levy designed to help pay for Congress’s health-care overhaul.
Ms. Chamberlain runs a video-rental store.
These would normally be unrelated facts, but 20 years ago, Ms. Chamberlain followed a number of her peers in adding tanning services to smooth out the bumps in her Rice Lake, Wis., business. Today, she wants to offer one free tan for every three rentals. Should that freebie be taxed? Ms. Chamberlain doesn’t know, and even if she did, she doesn’t yet have the software in place to help with the calculations.
For starters, video stores still exist? We had just assumed that they had gone out with powdered wigs. Netflix, Hulu, etc. etc. And since when do they offer tanning services? “Oh I see you’ve got Gigli there, great choice. Would like to hop in one of our tanning beds while I rewind the tape?”
Anyway, back to the tax:
Among the new details: “qualified physical fitness facilities” that include access to tanning beds as part of their membership fee won’t be subject to the tax.
That means customers at Sun Tan City in Owensboro, Ky., will pay 10% more for a dose of ultraviolet rays. But if they go to Anytime Fitness 100 yards away, and tan inside one of its two beds, they’ll escape.
“My jaw dropped,” said Rick Kueber, founder and chief executive of Sun Tan City, a 124-outlet chain based in Elizabethtown, Ky. Then he got to thinking. “If I had six treadmills in each of my stores, can I call myself a health club?”
Can anyone explain this? Our best guess is that since health clubs force you to get you off your ass, while video stores put you back on them, they’re getting a break. That seems to be pretty advanced for Congress logic but we’ll assume that it’s in the ballpark.
But It’s really NBD for the committed to skin cancer crowd however, “[Fifteen-year-old Grace] McCleary and others who lounged last week in the notorious Land of the Tanned – see MTV’s Jersey Shore – said a few dollars tacked on wouldn’t deter them.”
Fortunately, the IRS has advice (as it always does) for those affected and our resident tax sage, Joe Kristan has the details. So, there’s no risk to the industry as a whole – thank god – just a little extra bureaucracy in the pot in the form of Form 720. Enjoy!
Federal Tan Tax Burns Some Badly but Keeps Everybody in the Dark [WSJ]
Tanning-bed enthusiasts say tax won’t deter them [Philadelphia Inquirer]
Will Self-insured Companies Bear the Brunt of Rising Healthcare Costs?
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
The employer-sponsored health care system provides health insurance to more than 60 million people–but it does not exist in a vacuum. Employers are often reminded of this fact when their health care costs go up each year. Factored into that cost increase are premiums employers pay to hospitals to help those institutions provide care to the uninsured.
Two years ago the actuarial firm Milliman put a price tag on this cost-shifting: employers pay an additional $1,115 more for a family of four’s health insurance to make up for this loss. That totals about $88 billion annually.
This cost-shifting is once again becoming an issue as the federal government looks to provide insurance to people who cannot otherwise get it because they are considered high-risk.
States have for years created high-risk pools to separate the people with especially high health care costs from the rest of the population. Normally these folks can’t get insurance. The high risk pool absorbs some of the cost to insurers.
Now the federal government is getting in on the action, in large part to address the issue that insurers regularly refuse to issue insurance to some people or they do so at rates that are prohibitively high.
A new analysis on so-called high risk insurance pools that the federal government will set up as soon as July as a result of health reform makes the point that the money allotted will run out much sooner than originally thought. Instead of covering as many as 7 million people who could qualify there will likely be enough money to cover about 200,000 annually. This is not surprising. The need is always greater; the funds always inadequate.
So what does this all mean for employers?
It appears one step removed. But, as employers know, the health care system is fragmented yet, in the end, someone – either the federal government or employers – ends up paying the cost. In the analysis, published by the Center for Studying Health System Change, the authors point out that states with high risk pools currently do not assess self-insured employer plans.
Under the federal law this will change. Employers will face an assessment. One possibility is that the assessment will have to go up in order to increase the amount of money in the pot. The other of course is to limit who can get access to the high risk pools.
It remains to be seen what kind of conflict this issue will provoke. Like many other aspects of the new health care reform, it has the potential to fade away or to metastasize into something problematic.
But one thing remains likely: costs will continue to go up. The question is who will pay for these costs? If these assessments are any sign, it will be insurers and self-insured employers.
Accounting News Roundup: EU Threatens Convergence; IRS Is Not Hiring 16,500 Agents to Enforce Mandatory Healthcare; Charges Look Unlikely in AIG Probe | 04.05.10
• Accounting convergence threatened by EU drive [FT]
Somewhat of a bombshell was dropped over the weekend when an EU politician suggested that funding for the IASB could be subject to its willingness to buckle to political pressure, according to the Financial Times. Michel Barnier, the EU’s new internal market commissioner would like ‘issuers – more banks and more companies – and more prudential regulators represented on the governing board [of the IASB],’ and suggested that it was too early to determine if the IASB’s scant budget of $6.5 million would be increased.
The FT reports that the EU pols “believe prudential regulators should be mor overnance so that accounting can be used as a tool for financial stability,” despite the feeling of other countries (e.g. U.S. and Japan) that accounting rules “should not be the subject of regulatory intervention but should focus on providing an accurate snapshot of a company’s value.”
This difference in opinion on what the purpose of accounting is could disrupt the convergence process which won’t do much to impress the G20 chaps who demanded some progress on the global accounting sitch.
• IRS Expansion [Factcheck.org via TaxProf Blog]
Those 16,500 new IRS agents you keep hearing about, or is 17,000? Whatever it is, Factcheck.org was posed the question about this small army of tax enforcers that will be marching into your home, heavily armed and stealing your freedom by forcing you to buy healthcare that you don’t want.
Are you prepared for this shock? Turns out, it’s not true:
This wildly inaccurate claim started as an inflated, partisan assertion that 16,500 new IRS employees might be required to administer the new law. That devolved quickly into a claim, made by some Republican lawmakers, that 16,500 IRS “agents” would be required. Republican Rep. Ron Paul of Texas even claimed in a televised interview that all 16,500 would be carrying guns. None of those claims is true.
The IRS’ main job under the new law isn’t to enforce penalties. Its first task is to inform many small-business owners of a new tax credit that the new law grants them — starting this year — which will pay up to 35 percent of the employer’s contribution toward their workers’ health insurance. And in 2014 the IRS will also be administering additional subsidies — in the form of refundable tax credits — to help millions of low- and middle-income individuals buy health insurance.
Plus, Doug Shulman testified before the House Ways & Means Committee that the Service will not be auditing individuals, rather, “insurance companies will issue forms [some possibilities here] certifying that individuals have coverage that meets the federal mandate, similar to a form that lenders use to verify the amount of interest someone has paid on their home mortgage. ‘We expect to get a simple form, that we won’t look behind, that says this person has acceptable health coverage,’ Shulman said.” So maybe this is what Anthony Weiner was trying to explain to Bill O’Reilly?
• Federal Prosecutors Leaning Against Charges in AIG Probe [WSJ]
If you were thinking that it would only be a matter of time before Joe Cassano was charged with pushing the financial apocalypse button, you’re about to be severely disappointed. The Journal is reporting — citing “people familiar with the matter” eight times or so — that the former head of the AIG Financial Products unit is not likely to be charged by the Department of Justice for deceiving PricewaterhouseCoopers about AIG’s exposure to credit default swaps.
The DOJ was initially under the impression that Cassano had not informed PwC about an adjustment that AIG had made to make the losses from the CDS look just horrendous as opposed to catastrophic. When PwC came back with a material weakness on AIG’s internal controls, they abandoned the adjustment. The DOJ’s investigation turned up some notes of a PwC auditor that show that Cassano had told the firm about the adjustment thus, covering his ass. The Feds haven’t officially made up their minds about charging Cassano but this element was considered a “central issue.”
Possible New Tax Forms Under Healthcare Reform
As we plod into the glistening new vistas of Obamacare, what sort of wonderful tax returns await us there?
The biggest change, one that will hit every 1040 from the simple 1040-EZ to the full-blown 1040 starting in 2014, will be the new “personal responsibility payment.” The PRP is the marketer’s name for a fine for not having an approved health insurance plan.
We’ve mentioned some of the weird enforcement problems this will bring – problems addressed in more technical detail here. The PRP can’t possibly work with rting – the individual numbers are just too small, and the IRS can’t audit everyone. If they are ever serious about this, there will have to be a new information reporting form issued by the health insurers, something like the 1098 form. The form will need to have the taxpayer’s social security number, and maybe some new number identifying the taxpayer’s IRS-approved health insurance plan. We’ll call this Form 1098-BCBS.
The 1040s will have a new form, or at least a new schedule – we’ll call it Schedule DRE. Schedule DRE will have a space to put the number from the 1098-BCBS, or lacking that, boxes to check for why you have failed to do your part to support health care in this great nation. If you don’t check the right boxes, there will be further lines to compute your PRP, which can range as high as 2% of your income. The final tax will carry to the taxes summary at the bottom of the second page of the 1040.
In the higher rent district, there will be new forms, or at least worksheets, to compute the two new Medicare taxes that apply starting in 2013. An additional .9% wage tax will apply to wages over $200,000 for single filers, $250,000 for joint returns, and $125,000 on married filing separate returns. While employers of single taxpayers who employ them all year will cover their tax through withholding, single job-switchers and married taxpayers will have to do this weird new computation on their 1040s somewhere. This one isn’t indexed for inflation, so we should all be there in a few years.
The wage tax computations will be childs play compared to the new 3.8% tax on “unearned income” – a phrase reeking of chutzpah, coming as it does from freaking Congress. This tax applies not only to old-fashioned investment income – interest, dividends and capital gains – but to royalties, rents, and to “passive” income from partnerships and S corporations. Auditing this tax may require all 16,000 of the new IRS agents called forth by Obamacare. “Passive” is defined here by the Sec. 469 rules, which were enacted to deal with tax shelter losses. Tax preparers will need to be very careful in distinguishing “passive” from “non-passive” income in many cases where it never used to matter.
IRS agents will have a field day trying to trip up folks who liked the income to be “passive” when it enabled them to use other losses. This will stimulate the economy of high-end tax consultants, who will quickly earn enough to qualify for the tax themselves, where they don’t already.
The unearned income tax tax will apply to the lesser of “unearned income” or the amount adjusted gross income exceeds $200,000 for single filers, $250,000 on joint returns ($125,000 on separate returns). So a new form will have to add up the “unearned” income from Schedule B, Schedule D, Schedule E, and maybe Schedule F, and compute the tax, which will also carry to the nether regions of Schedule 1040, page 2.
There will be plenty of other changes applying to 1040s between now and whenever Obamacare fully kicks in. There is a nice timetable here.
The IRS isn’t waiting to prepare to enforce these new rules. Going Concern has obtained an exclusive early draft of Schedule DRE.
Here’s Why No One Needs to Get Worked Up Over the Healthcare Reform Earnings Hit
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
The brouhaha over the hits to earnings from the new healthcare law that companies are announcing is much ado about very little.
First of all, the charge is an estimate of future costs and will have no immediate impact on cash flow. And the estimate is unusually large because the accounting rules require costs that would otherwise be reported in the future to be reported now, simply because they are the result of a change in tax treatment.
As my former colleague Marie Leone reports at CFO.com, such “true-ups” over differences in tax and book accounting practices are just that. The real cost will be spread out over many quarters.
More importantly, the hit is the result of a loss of a major taxpayer subsidy. Maybe it made sense before to provide that. But given all the concern about the federal deficit, it seems to me that asking shareholders to bear a bit more of the burden for retiree drug benefits is hardly unfair.
And in the greater scheme of things, the hit may be so small as to have little impact on companies’ valuations, as a Credit Suisse analyst pointed out the other day. General Electric didn’t even break out its estimate for that reason, calling the cost “immaterial.”
The question is whether companies will stop paying for the benefits because of the cost, and that’s unlikely unless they’re willing to compensate for the loss with higher wages, as economist Dean Baker reiterated to me in an email late last week.
“The standard economist view is that the cost of health care comes overwhelmingly out of wages,” Baker wrote. “If they have to pay more in taxes, then it will mostly come out of workers’ pay and have very little impact on their costs and ability to compete.”
If on the other hand, a decline in healthcare costs leads to higher wages, that would mean a stronger economy, so I don’t see how either taxpayers or shareholders will lose here in the long run.
Yes, that’s a big if, but as I’ve said before, the new healthcare law is the biggest effort to rein in costs undertaken to date. Of course more must be done, but the law will provide a big impetus to those efforts.
Hopefully, all this will become clearer as a result of the hearings Rep. Henry Waxman plans to hold next week on this issue, but I’m not holding my breath.
Accounting News Roundup: Accounting for Healthcare Reform Begins; Should Small CPA Firms Partner with Large Firms on Projects?; Lawsuits Against Accounting Firms Rising Fast in UK | 03.28.10
• The healthcare party is over – now comes the (accounting) hangover [FT Alphaville]
Now that healthcare reform is behind us, the matter of sorting out the impact on corporations now falls to the accounting professionals in those companies as the first quarter winds down this week.
FT Alphaville notes that AT&T, for one, has already filed an 8-K that states that it will “take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change.” The change that the company is referring to is the “Medicare Part D subsidy” which, under the new law, is no longer eligible for a write-off against a company’s taxes. The subsidy is given to companies to help to pay prescription drug benefits to its employees.
FTA cites a report by Credit Suisse that shows many companies’ (including Goodyear Tire, International Paper and The New York Times) first quarter earnings will be impacted significantly by new healthcare legislation. And it also appears that it will cause companies to take a second look at the benefits they currently provide to employees, as Ma Bell stated in its filing that it “will be evaluating prospective changes to the active and retiree health care benefits offered by the company,” as a result of the legislation.
• Why solos and small firms shouldn’t “partner” with larger CPA firms on projects [Fraud Files Blog]
Tracy Coenen recently had a large firm approach her to see if she’d be interested in helping them out with some “Fraud Risk Assessment services.”
The larger firm asked her if she would be interested in “a partner/subconsultant” arrangement. Tracy explains why this isn’t a good situation for solo practitioners like herself, “[T]he consulting firm doesn’t have the know-how necessary to provide their client with the services they need. But they’re not about to let something silly like competence stand in the way of collecting fees! They will find a way to do it.”
Tracy says that the larger firm will ask you to discount your billing rate, train their staff, and ultimately, give them the secrets to your practice, “Don’t lose money by discounting rates, training someone else’s staff for those discounted rates, and creating a competitor for yourself who uses your proprietary methodology.”
• U.K. Accounting Suits Reached 5-Year High Last Year, Study Says [Bloomberg BusinessWeek]
The number of lawsuits filed in the UK against accounting firms in the past year is greater than the last five years combined according to Bloomberg. The thirteen suits filed in 2009 is more triple than the four suits filed in the previous five years. Although the number of suits is considerably smaller than the 61 suits filed after the collapse of Enron, et al. in the 2002-2003 time period, Jane Howard, a partner at Reynolds Porter Chamberlain LLP, is quoted that it’s not clear whether things are just getting started, “What is still hard to tell is whether this sudden rise in claims will subside quickly or whether accountants will face a higher number of claims over the coming years.”
PwC pretty much admits that they are…
…whores for the insurance industry.
The firm issued a statement today after nearly every news outlet called them out as corporate trollops after the release of their report on the Baucus healthcare reform bill yesterday.
Per Politico:
America’s Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
· Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.· An excise tax on employer-sponsored high value health plans.
· Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
· New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
“The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”
It seems as though P. Dubs is trying to clarify that, “We know we’re whores. We even said so in our report. We’re the classy type of whore though. We won’t do anything unless the money is right but we are good at pleasing our clients.”
What we’re wondering is why PwC would go to the trouble of putting out a report that they knew was one-sided and then their client dances around like the report was brought down by Moses from Mount Sinai. Maybe the firm wasn’t expecting such an enthusiastic response.
WTFK but something tells us that AHIP may not be enjoying their PwC Experience as much as they were yesterday.
PWC statement — Not so helpful for AHIP [Live Pulse/Politico]
PwC Lends a Hand to the Insurance Industry
We’re confident that you all enjoy talking about healthcare reform. If it wasn’t for the long hours you had to work, we’d be reading about all the accountants showing up at the town hall meetings to bring sanity to what otherwise appears to be a meeting of escaped mental patients.
Now, just when you thought that the debate had saturated the country into submission, America’s Health Insurance Plans has put out a new report, courtesy of P. Dubs, that states that the costs of health insurance would rise significantly under the plan submitted by Senator Max Baucus of Montana.
Continued, after the jump
From the executive summary:
There are four provisions included in the Senate Finance Committee proposal that could
increase private health insurance premiums above the levels projected under current law:
• Insurance market reforms coupled with a weak coverage requirement,
• A new tax on high-cost health care plans,
• Cost-shifting as a result of cuts to Medicare, and
• New taxes on several health care sectors.
The overall impact of these provisions will be to increase the cost of private health insurance coverage for individuals, families, and businesses. The net impact of these increases on households would include the impact of these increases and the new subsidies provided under the bill.
The report states that on average, costs will go up 79% under the current system between 2009 and 2019 and 111% for the same time period if the provisions are implemented.
Politico calls bullshit, “The industry, which didn’t like last week’s [Congressional Budge Office] report, bought its own analysis and will tout the PricewaterhouseCoopers findings in new ads.”
On the one hand, you can’t really expect PwC to do put out a report like this for nothing but did anyone really expect them to come to a different conclusion?
As we pointed out recently, accounting firm reports typically don’t get lots of attention but when they do, it’s usually over something that causes people to get all crazy for their particular side.
PwC will certainly be perceived as the insurance industry whore here but since they aren’t actually an insurance company, the firm won’t likely receive the worst of the populist chastisement and will just enjoy some free publicity.
Insurers, docile till now, go to war [Politico Pulse]
Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage [PwC Report]
Barry Salzberg’s Imaginary Advice for the President on Healthcare
We’re not going to debate about healthcare here because after about one-tenth of a nanosecond we’d consider jumping out the window. What we would like to discuss is Barry Salzberg, CEO of Deloitte-period, giving imaginary advice to the President on how to proceed with his strategy in getting support behind his reform efforts.
Check out some real advice, after the jump
Bar lays out his advice for B to the O in classic accountant fashion, ” I would counsel more patience.” and “Measured haste, you might call it. My advice to the president would be to find that balance of urgency and patience.” Haste. Balance. VOMIT. Wouldn’t you like to see one of these stoic Big 4 CEO’s just give completely batsh!t crazy advice on something, JUST ONCE?
Like if Salz advised that Obama’s strategy should consist of hosting Lebowski Fest at the White House. Bowling, white russians, chicks in viking costumes. That’ll get the people behind your plan Bam.
Measured haste. Pfffft. Is it any wonder everyone thinks accountants are boring? Feel free to discuss your favorite Big 4 CEO and all their words of wisdom they’re constantly bestowing upon you.
UBS Names Needed so We Can Pay for Healthcare Otherwise We’ll Have to Print More Money
“Rich people, I want your money.”
No, seriously. Hand it over.
We’ve covered the failure (so far) of the IRS to get UBS to name names on 52,000 Americans and we’ve heard some good suggestions but maybe chocolate isn’t what the Service is interested in.
The House passed a pricey healthcare proposal yesterday and B to the O wanted it to be “budget neutral” which means, “We’re in a deep hole you clowns. Don’t make it deeper.”
Charged with said task, they went to a cocktail party got to work and came up with a solution that they super-duper rich will foot the bill via taxes. That means, IRS, get your shit together, because Nancy Pelosi has had enough of rich people, that aren’t her, not paying their fair share of taxes. Swiss bank account holders beware, here are the gory details that you’ll be getting in on if your name gets dropped:
Under the $1.2 trillion plan passed by the Democratic-controlled House of Representatives, the wealthiest 1.2 percent of U.S. households would have to pay an additional $540 billion in taxes over the next 10 years via an income surtax of between 1 and 5.4 percent. For the super-elite, those in the top 10th of 1 percent (and presumably the type of taxpayers who have Swiss bank accounts), that works out to an additional $280,000 a year in taxes on an average annual income of $2.3 million a year, according to the Tax Policy Center.
So basically it looks as though the IRS needs to close the tax gap because…wait for it…there’s shit to pay for! We’re not slapping healthcare on the Federal Reserve credit card, no, no. Right here and now we start paying for stuff out of our own pockets. So get on these Swiss banks and get the names because they’re avoiding their patriotic duty.
Obama’s self-defeating war on the wealthy [James Pethokoukis/Reuters]
Review Comments | 07.17.09
• Swedbank Losses Show Deeper Troubles in Baltic – Souls as collateral in Latvia. Enough said. [DealBook]
• Citibank, BofA Results May Not Point To Recovery – Duh. [NPR]
• Fox Biz: Jorge Posada’s Wife Talks Healthcare Reform – Much more interesting perspective than say, anyone in DC [Clusterstock]