Essay on "Affordable Care Act and the Tax Reform Issues of 2013"
Essay 7 pages (2106 words) Sources: 7
[EXCERPT] . . . .
Affordable Care ActOver the last several years, the U.S. has been dealing with tremendous economic challenges. This is because of the stagnant economy, rising inflation and fiscal problems impacting all levels of government. The results are that these factors have been compounded to make life more difficult for the average American. ("Number of Uninsured," 2012) ("Obama Care Adds Trillions," 2012)
Evidence of this can be seen with the fact that there are 48 million people who have no health insurance. This is from the large number of unemployed losing coverage when they were furloughed. To make matters worse, there is little support from government programs (which have been cutting back on funding in the areas). This is in order to address the budgetary shortfalls they are facing from rising deficits. The net effect is that the majority of people are realizing a decline in their standard of living and quality of life. ("Number of Uninsured," 2012)
To address these challenges, the federal government has been implementing different provisions from the Affordable Care Act. This is designed to provide the public with greater choices for health insurance. The idea is that the increased competition will result in lower premiums and better service. Moreover, the law makes it difficult for insurance companies to cancel coverage (based upon: preexisting conditions and other factors). Many proponents argue that this is the perfect solution, in dealing with one of the biggest challenges impacting consumers and businesses. ("Affordable Care Act," 2013)
However, the fiscal issues in Washington have forced a number of individuals to question t
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Synopsis the Affordable Care Act
The Affordable Care Act is designed to directly address many of the challenges inside the health care system by imposing a number of mandates. These include: guaranteed coverage, shared responsibility, the creation of health exchanges, subsidies and minimum standards in the underwriting of policies. The combination of these factors is supposed to address the rising number of uninsured and control the spiraling costs of coverage. When this happens, businesses and consumers will not feel as much financial pressure from addressing these challenges. ("Affordable Care Act," 2013)
Guaranteed coverage is when insurance companies cannot refuse to provide protection to an individual. This is based upon a number of factors to include: the denial of preexisting conditions, age or geographic location. The only exemption is for those who are tobacco users. ("Affordable Care Act," 2013)
Shared responsibility occurs with the individual using the government programs in conjunction with private insurance policies. This will prevent any gaps in coverage and it will allow everyone to receive the support they need. In the event that someone does not purchase health insurance, they will be assessed penalty at the end of the year in the form of a tax. The only exemptions are for select religious organizations and those who receive hardship waivers. Moreover, those firms that have over 50 employees will also be subject to this provision. This is designed to prevent corporations from passing on their entire health care costs to the federal government. ("Affordable Care Act," 2013)
The creation of health exchanges is when each state will have a central marketplace. This is where consumers and businesses can buy insurance policies or compare premiums / options with other carriers. To help keep the costs down at least one nonprofit organization (which is subsidized by the government) will compete against private carriers. ("Affordable Care Act," 2013)
Subsidies will be provided to the states to help run and offset the cost of the health exchanges. Moreover, low income individuals and families can qualify for federal assistance with their insurance premiums. In this case, the rate will be set at 3% to 4% of their annual income. This designed to ensure that there is some kind of shared responsibility among this segment of the population. ("Affordable Care Act," 2013)
Minimum standards in underwriting are when the federal government will conduct annual reviews of health care policies. The basic idea is to prevent abuses and ensure that consumers being treated fairly. Furthermore, practices such as lifetime coverage caps are banned under these provisions. ("Affordable Care Act," 2013)
Synopsis Tax Reform Issues of 2013
The fiscal challenges impacting the federal government; means that there will be some kind of tax reform. This is because the current system is filled with loopholes which allow large corporations and the wealthy to avoid paying their fair share. Evidence of this can be seen with a report conducted by Citizens for Justice. They found that the majority of corporations paid no income tax from 2008 to 2010. This is because they are using numerous write offs to reduce their marginal rates. ("Facebook Paid No Income Taxes in 2012," 2013)
In response to these reports, there have been greater calls for these firms and the wealthy to pay higher amounts. At the same time, there is an emphasis on reducing corporate loopholes. The basic idea is that if these people and entities paid what they owe, many of the budgetary challenges would not be as extreme. ("Facebook Paid No Income Taxes in 2012," 2013)
As a result, there are a number of issues surrounding the tax system and the way different rates are applied to the wealthy. For example, recently the Simpson Bowles Debt Reduction Commission reiterated their recommendations to reform the tax code. They called for enacting a $1.3 trillion increase in taxes over the course of ten years. This includes a number of changes with: the elimination all capital gains write offs, it phases out employer related deductions for health insurance and it raises the gas tax by $.15 cents. (Klein, 2013)
At the same time, the commission proposes deep spending cuts which are much larger than the White House or Congress are proposing. The problem with many of these recommendations is that they are alienating select Democrats and Republicans. This hurts their ability to create a viable plan that will responsibly raise taxes and have prudent spending cuts. (Klein, 2013)
Evidence of this can be seen with a similar proposal that went before the full House of Representatives for of vote in 2010. The measure failed by a margin of 382 to 38. This is because the changes were so extreme that they alienated both sides. In Washington, these tactics will result in many good ideas being ignored due to the fact that they could not win bi partisan support. (Klein, 2013)
These issues are demonstrating the delicate balancing act that must take place when it comes to taxes. As the far left is concerned, they want to impose higher rates with reduced loop holes. While the right wants to see fewer increases that are a part of larger spending cuts. This has led to political infighting based largely along ideological lines. (Klein, 2013)
The results are that the federal government receives a temporary fix to their fiscal challenges. For example, on January 1st the spending limit of $16.4 billion was reached. This set up a showdown between the White House and Congressional Republicans. They were demanding that the President propose deeper spending cuts as a part of any extension. In 2010 and 2011, this was effectively used to force Obama to give in to their concessions. ("The Federal Debt Ceiling," 2013)
However, this time a different approach was being taken by the White House. What happened is the President refused to negotiate with Congress on this issue. This set up a last minute deal with Republicans giving in to Obama's demands. The problem is that this solution is only temporary. ("The Federal Debt Ceiling," 2013)
This means that in March a similar showdown will occur over spending cuts, taxes and the federal debt ceiling. These issues are demonstrating how in 2013 there will be challenges directly related to possible changes in the tax code. It will focus on the amounts the wealthy and large corporations have to pay. ("The Federal Debt Ceiling," 2013)
The recent position taken by the White House is that higher taxes will be imposed with responsible spending cuts. This means that Republicans will be forced to accept these terms or deal with the possibility of the federal government shutting down. The last time this happened (in the 1990s), is when Congress was viewed unfavorably. While at the same time, President Clinton's approval ratings soared. Politically speaking, Obama will take a similar position and force Republicans to meet most of these guidelines. This will result in tense standoffs and showmanship which is settled with last minute solutions. ("The Federal Debt Ceiling," 2013)
What was learned from this assignment and how… READ MORE
Quoted Instructions for "Affordable Care Act and the Tax Reform Issues of 2013" Assignment:
APA format
Double space
1*****" margins all around
Arial 12 pt font
1st five pages are a synopsis of the Affordable Care Act and Tax Reform/Issues of 2013.
Page 6-7 are to explain what is learned from this assignment and how issues discussed can impact the nation strategically.
References on page 8
How to Reference "Affordable Care Act and the Tax Reform Issues of 2013" Essay in a Bibliography
“Affordable Care Act and the Tax Reform Issues of 2013.” A1-TermPaper.com, 2013, https://www.a1-termpaper.com/topics/essay/affordable-care-act/7269644. Accessed 3 Jul 2024.
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