It’s one tax increase after another from President Biden, Speaker Pelosi, and the rest of the Democrats in Washington.
The Treasury Department released its “green book” in late May detailing most of these tax hikes. But now, Democrats are sneaking in yet another: a 95% tax on the most common prescription medicines.
It’s amazing what controlling Congress with a tiny majority will do for confidence. The top personal income tax rate, which is also the tax rate paid by successful small businesses such as LLCs, sole proprietors, partnerships, and S corporations, would rise from 37% to 43.4%. The corporate tax rate would go up from 21% to 28%, close to the highest rate in the developed world. The capital gains tax rate would rise from 23.8% today all the way to 43.4% for higher earners. A second, “double death tax” would be created by taxing people on their unsold investments at death, assets that would then still be subject to the 40% death tax. Some Democrats are even grumbling that their leaders won’t try for even more tax increases on top of these, such as a gas tax hike or a carbon tax.
Then there’s H.R. 3, the crown jewel of healthcare legislation coming out of Pelosi’s slim majority. The bill imposes government price controls on 250 of the most common prescription medicines, including insulin. In order to make sure that the price control is adopted, the government gives an “option” for the drug to be subject instead to a brand new 95% drug tax. Since people ultimately pay taxes, the 95% Pelosi Drug Tax will fall directly on consumers of prescription medicines, notably seniors.
Behind door No. 1 is a price control that will lead to scarcity, government rationing, and less money for the next miracle vaccine. Behind door No. 2 is a 95% tax on prescription medicines, immediately doubling the price of drugs at your local pharmacy. Either of these bad options would immediately turn the pharmaceutical industry into a bought-and-sold subsidiary of big government, like the electric company or the post office or Amtrak.
The next time the world needs a miracle cure for whatever we’re calling the next COVID-19, or for diseases such as HIV and malaria? Well, we might have a problem.
There is hope, however. Centrist House Democrats, in numbers high enough to sink H.R. 3, are coming out against the bill. They sent a letter to Pelosi this month asking her to scrap the bill and start all over again with a bipartisan, bicameral agreement that they could sell back home. They’re thinking about the 2022 midterm elections.
Bottom line: This is bad legislation that will hurt your bottom line, and the future of American healthcare.
