As many U.S. citizens continue to rail against the ballooning budget deficit, the reality is that most Americans are unwilling to swallow the bitter pill it will take to tame it.
Perhaps that's because nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history, according to a report from The Wall Street Journal.
At the same time, the number of American households not paying federal income taxes has grown to an estimated 45% in 2010, up from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.
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More Americans Tapping Into Entitlement Programs Swells Budget Deficit
Taipan Daily: What Happens When Peter Wants His Money Back?
FedEx's unfunded pension problem gives us a clear look at the troubles lurking just around the corner for those who borrowed their way through the recession. Is the recession truly over? It may seem somewhat late to be asking that question. After all, haven't Washington and Wall Street already bragged as to how we have […]
Congressional Spat Over Doctor's Medicare Pay Threatens Obama's Healthcare Reform Effort
A Congressional stalemate over how to stave off a hefty pay cut to doctors treating Medicare patients threatens to undermine President Barack Obama's healthcare reform effort - even as the administration mails out a glossy brochure to reassure seniors the healthcare program is on solid ground. For the third time this year, Democrats and Republicans […]
How to Fuel Your Retirement with Dividend Cash
The financial crisis already put a major dent in your retirement portfolio... and the markets are acting crazy again. What can you do to protect - and grow - your wealth in these markets? Dividends are the way to generate real income - no matter where the market turns. Read this report to discover how to infuse your retirement with cash.
Healthcare Reform Losers: Companies Providing Retiree Benefits Face Multi-Million Dollar Tax Costs
After sending letters of protest to Congress in the months prior to the healthcare law's approval, U.S. companies are now facing multi-million dollar after-tax hits this year due to a tax provision in the new legislation, labeling them healthcare reform losers instead of winners.
Part of the new healthcare law places a federal income tax on government subsidies given to companies that provide retirees and their spouses with drug benefit plans. The 28% subsidy was created as Medicare Part D, adding a prescription plan for senior citizens to the Medicare Act of 2003. To encourage companies to continue offering retirees a drug plan, the tax-free subsidy reduced companies' costs. Fewer senior citizens then went through Medicare's prescription program - which would have cost taxpayers much more than the subsidy price.
Caterpillar Inc (NYSE: CAT) and Deere & Company (NSYE: DE) are just two of the businesses that fought the new stipulations. The manufacturers estimate the tax will cost them $100 million and $150 million this year, respectively. Other companies who will pay handsomely include AK Steel Corp. (NYSE: AKS) with $31 million in charges, and Honeywell International Inc. (NYSE: HON) with an estimated fee of $42 million.
Consulting firm Towers Watson & Co. (NYSE: TW) estimates these taxes could cost companies about $233 per person receiving drug benefits - a hefty price tag when a company gives benefits to 40,000 retirees, like Caterpillar.
Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. Although the tax won't be effective until 2011, accounting practices force companies to recognize the fees in the period in which the law is signed. That means the tax could nab $14 billion from corporate profits in a year when companies were hoping to recover from huge losses during the recession.
Part of the new healthcare law places a federal income tax on government subsidies given to companies that provide retirees and their spouses with drug benefit plans. The 28% subsidy was created as Medicare Part D, adding a prescription plan for senior citizens to the Medicare Act of 2003. To encourage companies to continue offering retirees a drug plan, the tax-free subsidy reduced companies' costs. Fewer senior citizens then went through Medicare's prescription program - which would have cost taxpayers much more than the subsidy price.
Caterpillar Inc (NYSE: CAT) and Deere & Company (NSYE: DE) are just two of the businesses that fought the new stipulations. The manufacturers estimate the tax will cost them $100 million and $150 million this year, respectively. Other companies who will pay handsomely include AK Steel Corp. (NYSE: AKS) with $31 million in charges, and Honeywell International Inc. (NYSE: HON) with an estimated fee of $42 million.
Consulting firm Towers Watson & Co. (NYSE: TW) estimates these taxes could cost companies about $233 per person receiving drug benefits - a hefty price tag when a company gives benefits to 40,000 retirees, like Caterpillar.
Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. Although the tax won't be effective until 2011, accounting practices force companies to recognize the fees in the period in which the law is signed. That means the tax could nab $14 billion from corporate profits in a year when companies were hoping to recover from huge losses during the recession.
Time Running Short for Social Security and Medicare
By Jason Simpkins Managing Editor Money Morning The U.S. Social Security and Medicare programs will run short of adequate funding faster than previously thought, according to a government report released earlier this week. The Social Security Fund will be exhausted by 2037, four years earlier than previously thought. And the Medicare hospital trust fund will […]