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Welcome back the government wishing the American people happy new year with a brand new tax tomorrow it.
Tomorrow regardless of the outcome of fiscal cliff negotiations Americans.
We'll be hit with that one trillion dollar.
New tax bill thanks to us obamacare -- -- house Texas congressman and vice chairman of the subcommittee.
Health doctor Michael Burgess who knows a thing or two about the health care system.
Congressman -- this morning happy new year or or not so happy for a lot of people.
Our -- to -- -- this morning break this down for a full kind of taxes are we talking about here that basically have nothing to do with the fiscal cliff right.
Correct these are baked into the cake and they're happening regardless of whatever happens of the house or senate today.
There's five changes major changes in tax policy would start on.
January 1 as a result of the Affordable Care Act probably the biggest one is a a payroll tax for individuals who -- an offer 2000 risen to -- 200000 as individuals 250 of the couple.
This point 9% payroll tax.
Is also applied to dividends and capital gains this is different payroll taxes typically haven't applied to interest income in the past but this is a new tax that is.
That is being levied as a as a payroll tax it's collected under the auspices of Medicare but it actually doesn't spend any time the Medicare trust fund it goes to fund.
Subsidies in the federal exchanges.
The the other tax of medical device tax two point 8% gross receipts tax on medical devices that means whether company makes money or not.
It is still taxed at that two point 8%.
Rate and then finally there's sort of three point 8% unearned income tax for -- -- the higher income earners who will get hit.
With that again on capital gains and and and dividends so these are -- changes in tax policy that.
They have crept up on most people -- -- lawyers because we've -- been focused on the other stuff.
Yeah and that medical device tax in particular really hurts because it might stifle innovation.
A research and development that's the last thing our medical industry cannot afford but I want to ask you about this fiscal cliff latest it appears.
-- for the time being John Boehner is on the sideline letting something get -- down.
In the senate between what we understand Mitch McConnell and Joseph Biden right now.
The -- what do you know let's just say if the deal comes out of the senate that puts this tax increase around.
Half million dollar threshold say it has satisfactory spending cuts is there's still.
Any chance that type -- -- a bill gets enough Republican support.
In the house to get signed into law and get done by January 1.
-- -- I wouldn't foreclose on on any possibility here but do remember.
The speaker -- the house Republicans are not sidelined.
We actually did our work so many months ago that most people don't remember it we sent a tax bill over to the senate for them to take up -- before the August recess.
-- the fact that they've refused to work on it this extend all tax rates for another twelve months while we work on fundamental tax reform.
Which really is the sensible way to go about doing this if if you just stop and think about it flee the actual money delivered under the president's proposal is is really pretty paltry and here's a chance to actually change the tax go to -- He just had Donald Trump -- -- said.
You need growth in this economy if you're really going to look -- look at economic recovery.
Here's an opportunity to do that it's it's a shame the president doesn't want to undertake that activity but.
I -- I wouldn't foreclose any possibility.
You got to see a lot on the spending side because let's be honest we've got an inauguration coming up and a few days national debt will be over sixteen.
Trillion dollars but the time the next president is inaugurated it could be a staggering 22.
Trillion dollars and that's what.
We could have to tackle.
That spending is what I wanna talk to you next about because we're hearing more this morning that could be at least one of the major sticking points for Republicans in these negotiations is that.
Democrats while asking for higher tax revenues -- aren't going to balance that approached with using that revenue to cut spending.
In fact we're hearing from some Republicans John Kyle and others who have said the Democrats won't use that then for increased spending in other areas.
We don't know all the details of yet because behind closed doors what are you hearing.
And do you agree with that.
Well of the historic.
-- perspective when Ronald Reagan agreed to a tax increase.
Believe they got the -- -- never got the spending cuts.
Bush same thing back in the early ninety's so that -- historical precedent is the taxes -- and right away the spending cuts never materialize and you know we've seen that movie and the problem that he knows that this situation is so dire now with the amount of debt and deficit that.
If we don't get our arms around that.
That's what's gonna -- the fabric of our republic.
I'm not the fact that when wanna punish successful people in the tax code.
And that's that's tinkering around the edges let's get serious about the spending side no one can tell me that every penny out of every dollar the federal government Sam stands.
Goes to some good -- the there are plenty of place -- It you know the fact the matter is if this were all -- in congressional committees on C span in an open and transparent process.
People wouldn't tolerate the amount of waste that goes on in federal agencies but because it's hidden.
And no one knows about it it it it just continues on.
Congressman what the president has said as if no deal comes out of the senate he's going to propose legislation.
That goes over the house that simply says.
Extend the tax rates for those making 250000.
Dollars or less how politically perilous might it be.
For the Republican controlled house to vote no on such a bill.
The look the president is a constitutional scholar.
So he knows better than I that all tax bills.
Must originate in the House of Representatives not of the White House so there so there's a fatal -- -- his logic even.
Right at the beginning but.
But look at it again I'm not gonna foreclose any possibility.
If I can see some serious movement on spending.
I'll look -- it at whatever the tax pieces.
But the president says he was reelected to raise taxes on the rich.
Guess what I won an election and I won that election not by raising taxes on the top 2% the middle 2% for the bottom.
I was elected to cut spending and that's where my -- This is that you only fifteen of the 234.
Are in districts worn by the presidents -- to your point that makes a lot of sense congressman thanks so much for being with us we appreciate -- happy new year to you hopefully you.
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