It was fun while it lasted. I am of course referring to the mirage that was the Administration's promise of very manageable tax increases. Bloomberg is reporting that as part of the Healthcare overhaul bill, there will be an addition $600 billion in tax increases.
Democrats in the House and Senate are working on legislation that would require all Americans to have health insurance, prohibit insurers from refusing to cover pre-existing conditions and place other restrictions on the industry.
Democrats will work on the bill's details next week as they struggle through “what kind of heartburn” it will cause to agree on how to pay for revamping the health-care system, Rangel, a New York Democrat, said today. He also said the measure's cost will reach beyond the $634 billion President Barack Obama proposed in his budget request to Congress as a down payment for the policy changes.
Asked whether the cost of a health-care overhaul would be more than $1 trillion, Rangel said, “the answer is yes.”
Why raise taxes? Can't the Treasury just print a cool quadrillion (in bearer bonds, to be unsuccessfully smuggled by vicious ninjas into Bern so that UBS can pretend to be buying up long-dated maturities for its own account) and that will be that. Timmy has already stocked up on enough paper to run the printers at turbo for a good 4 years (and even accounted for the occassional PC Load Letter error) and Ben has bought every single available Port-A-Potty (Citi, BofA, Regions Financial) in which to flush all the little green pieces of paper that he buys from Timmy.
Additionally as Obama has pretty much staked his political career on only raising the taxes of those who make over $250,000 per year. That's what - 4, maybe 5 million Americans? So, $600 billion divided by 5 million, that makes... oh, about $120,000 in tax increases per person.
Silver lining - a definite stock recommendation: buy the airlines (preferrably in the next five minutes before Goldman runs oil to over $100 and Delta files for Chapter 44 or whatever iterration of the bankruptcy process they are at now) as sales for one way tickets out of the US skyrocket.