The Obama administration is firing back against claims that the healthcare law will cost companies billions in taxes.
Commerce Secretary Gary Locke in a Thursday op-ed in The Wall Street Journal called out companies for being "disingenuous" in arguing that the rescission of a particular healthcare tax deduction would cause their taxes to jump.
"Critics have seized on this accounting adjustment to suggest these costs — as much as $1 billion in one company's case — are going to place immediate and substantial cost burdens on America's businesses. This is disingenuous," Locke wrote.
Boeing on Wednesday announced the accounting change would make it take a $150 million tax hit.
AT&T recently announced a $1 billion tax charge because of the accounting rule change. Caterpillar and John Deere expect tax increases of $100 million and $150 million, respectfully. 3M claimed the accounting change would boost its tax payments by roughly $87 million.
Locke wrote that the actual cash flow impact of the provisions would begin in 2013 and would only represent a tiny fraction of the accounting charge-offs.
He also pointed to a story in the Journal that said that one company that had calulated a $100 million hit to its first-quarter earnings would actually see closer to a $7 million hit each year. Locke said that was less than 1 percent of the company's profits.
Under the healthcare law, businesses still receive the tax-free subsidy, but they can no longer deduct it from their taxes as they did in the past. In most cases, companies cannot deduct tax-free subsidies from their taxes.
"This is how virtually every other federal subsidy for businesses and individuals is treated by the IRS," Locke wrote, adding, "When you look past the hype and the overheated rhetoric, the benefits of the health reforms for America's businesses large and small far outweigh the impact of this small provision."
Republicans are pressing the argument that the healthcare law is a jobs-killer that will raise taxes, and reports from the companies have bolstered their public case.
Locke's op-ed is a sign of Democrats trying to push back.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
2 comments:
Obama want's them to complain and lower employee wages so when he comes in with a government take over he looks like the hero .
So who are we to believe the goverment who has yet to run one successeful program ,(social security , Medicaid ,postal office etc: ) or the private companies such ad John deer ,AT&T that MAKE millions of dollars every year?
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