WASHINGTON, DC – U.S. Senator Pat Roberts today, on the Senate floor, made the following remarks about the tax increases used to pay for health care reform:

"I want to make sure the American people truly understand what these tax increases will mean for them and their families.

"This bill calls for more than a shocking $500 billion in massive new taxes – taxes that will fall on the average American who already knows that their tax burden is too high.

"We hear a lot about the efforts behind closed doors to merge three different bills and secure votes, but the tax increases should make taxpayers really sit up at take notice.

"The behind closed doors crowd have tried to disguise some of the new taxes in this bill by presenting them as being paid for by targeted health care industries. However, the reality is that average Americans who purchase health insurance and use medical services from prescription drugs to hearing aids are the ones who will foot the bill for this tax and spending spree. The higher taxes called for in this bill will come straight out of American's pocketbooks.

"Americans have a right to know about these taxes, a right to be informed, a right to understand and a right to be heard.

"Let me just give you a few examples the new taxes called for and who will actually pay them:

"The bill imposes a 40 percent excise tax on health insurance providers that offer high cost health insurance plans.

"This provision is the largest tax hike in the bill and raises $201 billion. Of this amount, an analysis by the Joint Committee on Taxation, or JCT, finds that more than 80 percent, or $164 billion of the tax will come from increased income and payroll taxes on higher wages.

"When the bill is implemented, the excise tax is likely to hit 40 percent of American families. So, the reality is that these families, many of whom are middle income taxpayers, not the insurance provider, will be on the hook for $164 billion.

"The bill raises taxes on those who pay for their health care out of pocket by raising the floor for deducting catastrophic medical expenses from 7.5 percent to 10 percent of adjusted gross income.

"Those who take this deduction are most often seniors and those with serious medical issues. Eighty-seven percent of taxpayers who claim this deduction have income under $100,000.

"While an amendment to exempt taxpayers 65 or older from the higher threshold was approved in committee, don't be fooled – the exemption is only in effect in the first three years. As a result, in following years, roughly 50 percent of taxpayers affected by this proposal will be over age 65.

"The bill raises taxes on the more than 35 million Americans who participate in Flexible Spending Accounts by $15 billion. The median income of a FSA participant is $55,000.

"These programs are an important benefit for many families for whom health insurance does not cover, or does not sufficiently cover, some of their highest cost health care expenses, such as dental, vision and prescription drug costs.

"They are also important for individuals who manage chronic diseases, such as diabetes, heart disease, or cancer.

"FSAs allow participants to set aside money out of their own pockets to pay for these necessary expenses. However, under this bill, the government caps how much can be set aside in an FSA, effectively raising the tax burden on certain FSA participants and increasing their health care costs.

"In another tax attack, it also eliminates the ability of individuals to use money from their accounts to purchase over-the -counter medications.

"Here we are trying to put downward pressure on health care costs. Rather than maintaining current law that gives consumers the option to purchase over-the-counter (OTC) medications through an FSA, the bill instead directs them to more costly alternatives, an increased use of the health care system, and limits consumer's ability to fully use their accounts.

"Another example of the stealth taxes called for in this bill is the individual mandate penalty. Although the president has said that this penalty is not a tax, the Finance Committee bill adds this provision under a section called the ‘Excise Tax on Individuals Without Essential Health Benefits Coverage.’

"The government expects to collect $4 billion from this tax. In 2013 almost half of those Americans who will be paying the penalty tax will have incomes between $22,800 and $68,400 for a family of four.

"This penalty essentially means that the IRS will now tax you if you don't buy a health care plan approved by the government.

"Not only that, this bill expands the reach of the IRS even further into the lives of ordinary Americans – allowing them to collect more information than ever before about you and your health care choices in order to tax you based on those choices.

"This provision highlights one of the most disturbing aspects of this bill – the increased role that the IRS will play in the lives and health care choices of every American.

"Under this bill, the IRS will gain unprecedented new powers. But here’s the clincher – there’s no money in this bill to pay for the expansion of the IRS that will have to occur for the IRS to implement, administer and enforce these new tax provisions.

"How much will that cost? How many billions will be needed to pay for this growth in government? How many more federal employees will the IRS have to hire? We don’t know.

"But make no mistake – every American should understand that the IRS will be playing a bigger role in their life and their health care decisions. Everyone who wants more IRS involvement in their lives, raise your hand.  

"Mr. President, I've highlighted just a few of the many tax hikes contained in this bill that await unsuspecting taxpayers.

"Not only will Americans face massive new taxes under this bill, they will also see an unprecedented expansion of the IRS, and a further reach by government into their lives.

"This is the wrong solution to health care reform. Americans are looking for real reform that preserves their health care choices. But reform that comes with a $500 billion tax increase is not the answer."

Senator Roberts is a member of the Senate Committee on Health, Education, Labor and Pensions and the Senate Committee on Finance, the two committees tasked with writing reform legislation. Senator Roberts voted against both Committee versions of health care reform. He is the Co-Chairman of the Senate Rural Health Caucus.

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