Telecommunications giant AT&T will record a $1 billion charge for the first quarter of 2010 due to the tax implications of the recently passed health care legislation, according to the Atlanta Business Journal. According to the Journal:
In the filing, AT&T added, “As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.”
So much for helping to rebuild our economy. The tax implications of this bill are already having a detrimental effect on employee compensation and retiree benefits. Before the legislation was even passed, Caterpillar, Inc. sent a letter to members of Congress urging them to vote against this bill, which they estimated would cost the company over $100 million per year. Because America didn’t know fully what was in the bill before it was passed, both small and large businesses are only just now able to start coming to grips with what the legislation really means for them.
Even with thousands of eyes focused on the bill, small bits are only now being discovered. Last week a tax on tanning was the big news among the provisions, apparently inserted due to the increased incidence of skin cancer among people going to tanning salons. This tax will be passed on to consumers who already have less money to spend on luxuries like tanning beds. That fact was apparently immaterial to the Democrats. Tanning salons will have to cut back on costs like employee hours, possibly laying off some workers, to compensate. The owners themselves will likely be working longer hours away from home in order to make ends meet, or they’ll be cutting back on personal spending. Either way, more money goes into government coffers and the private economy shrinks just a little bit more.
According to the Democrats, the legislation will help small businesses. Clearly tanning salons, whose profit margins are already low and in this economy are already suffering, are not helped. Lots of other small businesses that might otherwise not have offered health insurance will now be forced spend that money. How are these businesses “helped” by this bill? Certainly Leftists will expound upon the “social contract” and other warm-n-fuzzy emotional ideology, but the Cold Hard Fact is that people are going to lose their jobs as both a direct and indirect result.
The tanning tax, in the grand scheme, is merely symptomatic of why the Health Care Takeover legislation is both poorly written and a bad idea for our economy. Taxes on health insurance plans and the additional regulation of the health care industry are both going to add costs to the system. The cost of compliance is never discussed by politicians, but billions of dollars are going to be spent trying to understand what this legislation means to each employer; billions more will be spent each year trying to maintain compliance with and administrate the program. Penalties on individuals who do not have health insurance will reduce their ability to spend money on other products.
The American People are beginning to understand that we can’t simply have everything we want and continue to put it on the government credit card. As with our personal spending, public spending has reached its limit. This bill is too big, too expensive, too intrusive. It’s too much. We’ve had government bailouts, government incentive programs, government mandates and government solutions time and again to what are private industry problems. It hasn’t worked yet, it won’t work and it’s past time for this power-drunk government to take a back seat and let the private sector drive for awhile.
Cross-posted at The Minority Report.