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Michele Bachmann mangles facts on health care tax

Rep. Michele Bachmann speaking to the press outside the Supreme Court
REUTERS/Jason Reed
Rep. Michele Bachmann speaking to the press outside the Supreme Court following the ruling.

Last night on CNN, in an interview with Piers Morgan on his eponymous program, Congresswoman Michele Bachmann spake thus:

"Just one of the taxes [in the Patient Protection Act, aka Obamacare] will be a tax on when people sell their homes. It's 3.8 percent. For many Americans, they'll have to pay, in addition to all the other costs at their closing when they sell their home, the seller will have to pay 3.8% of the closing cost to the government for Obamacare ... So if you have a $500,000 house, you'll be having to give something under $20,000 to the federal government for Obamacare."

This bogus "fact" has been circulating in emails since 2010 and every single reputable fact-checker who has looked at it has found it badly wanting. This includes snopes.com, which follows up on rumors circulating on the internet, and Politifact (which rated it as a "pants on fire" falsehood, and factcheck.org, which called it "utterly false."

The health care bill imposes no new tax specifically targeted at the sale of homes. The law does have several new taxes in it — very progressive taxes mostly that will hit primarily wealthy individuals and families. The biggest and most important of those taxes — and this is undoubtedly the one to which Bachmann was inaccurately alluding — is a 3.8 percent tax on "net investment income" of individuals with taxable incomes above $200,000 or families above $250,000. At today's levels of income distribution, 97 percent of Americans would be unaffected by the tax. Repeat: The tax to which Bachmann was presumably referring has no impact on 97 percent of Americans.

That's the really big whopper Bachmann told last night, by not referring to the provision that she described as a tax that would effect only the richest 3 percent of households.

Now, if you have an income that large, and you sell a home, and if you have made a capital gain (at today's housing prices, this clearly would not be everyone who sells a home),  that gain will be treated as investment income under this provision of Obamacare and you will be assessed this new 3.8% tax on the gain.

Of course, the lesser but still considerable whopper that Bachmann told in her little illustration on CNN, was the suggestion that the tax would apply to the entire sale price of the home. No, even these relatively few relatively wealthy folks who have high incomes and sell, in a given year, a home on which they have made a capital gain, will pay the tax ONLY ON THE GAIN. In her example of a $500,000 home (which is more than double the median home price), if the family sold a home for that amount, and if they had paid, let's say, $450,000 for the home when they bought it, will pay not "something under $20,000" as Bachmann said, but "something under $2,000."

The Affordable Care Act provides a lot of benefits, mostly to those who are poor (the Medicaid expansion), or have pre-existing conditions, or get very sick and can no longer be dropped by their insurers, or who do not get insurance from their employers and have to shop the market on their own (the "exchanges") and the architects of the bill determined that it would be "scored" as not adding to the deficit, which it is.

To achieve that, there are several new taxes in the bill including (by the constitutional logic of the Supreme Court majority) the penalty on those who can afford health insurance but decline to get it — which, of course, they can avoid by buying health insurance. And also including a new 3.8 percent tax on net investment income by families with incomes above $250,000. 

I have called the Bachmann re-election campaign to offer her a chance to defend the accuracy of her statement. If they reply to me, I will certainly update this post.

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Comments (42)

This doesn't make a lick of difference

Bachmann doesn't deal in facts, only "fear and anger". "Fear and anger" is what the republican leader, Rush Limbaugh, said the republicans have to keep going, which is right up Bachmann's alley. She doesn't have to have any facts. She just has to be loud and and look for the spotlight, both of which she excells at. You will notice Rush or Bachmann never talk about any goals for the country. They just spew the outrageous words that keep the "fear and anger" going.

lol

Rush Limbaugh is not the republican leader....LOL
Fear and anger? That sounds like a left wing slogan actually. In fact, the LEFT typically uses tactics such as "Republicans do not want Obamacare" so they must want people without insurance to die.
That is the logic and rhetoric of the left. It is shameful and wasteful and mostly lies.

Did Bachmann not articulate some facts around this legislation well? Sure! But, did she "mangle" things? And is the author looking at the micro (this one Bachmann speech) vs the macro, which is a major expansion of governement and an unprcedented allowance for government to further expand in other areas of our lives.

So what are Obama's goals for this country?
Also, is Bachmann in the presidential race any more? Is Limbaugh?

You responded to rhetoric with rhetoric. In other words, you're the same as Bachmann, just full of fear and anger and on the left wing rather than the right.

Speaking of whoppers ...

There's a vast difference between "did not articulate well" and "lied outright." Or is this another It's All Right If You're A Republican moment?

What are Obama's goals for this country?

Well, Todd, it's obviously Socialism.

Look, given the ideas in your post, that's the only answer you'll accept. We won't waste our breath actually discussing the real goals with you.

"Lol" always makes a fellow sound so eloquent

Let's look at all of the points you try to make:

The chair of the Republican Party had to beg Rush Limbaugh's forgiveness for daring to suggest that Republicans did not take their marching orders from him. He may as well be the leader.

No matter how you try to slice it, "fear and anger" were Limbaugh's words. It doesn't matter what they sound like.

Do Republicans want to repeal Obamacare? Yes. Do they have anything to replace it? No. Will people die if they don't have health insurance? Yes. In criminal law, there is a presumption that a defendant intends the natural and probable consequences of his acts. If we use that here, what do we presume about the Republicans' intentions?

Rep. Bachmann's speech may be a "micro." The "macro" is not "changing the subject with Republican buzzwords." The "macro" is her consistent lies and distortions and--just as important--the failure of the so-called liberal media to hold her to account. What would your ideological masters tell you that you thought about Democrats would said comparable nonsense?

Bachmann is not in the presidential race. She is, however, a member of the House of Representatives and a candidate for re-election. Does that give her immunity from having her public utterances scrutinized? Nice try.

Incidentally, I fail to see why you take "rhetoric" to be something bad. You're trying to draw one of those false equivalences that conservatives seem to dote upon, but it just isn't working. Rhetoric, as Aristotole tells us, is "the faculty of observing in any given case the available means of persuasion." Everyone uses "rhetoric" in some form, even if some have decided it's a bad word.

Don't hold your breath

Of course, Rep. Bachmann has no interest in correcting the record. Her whole M.O. is to tell whoppers so big that people will recognize that she's exaggerating, but assume that the exaggeration is 5-10% away from the actual numbers, not orders of magnitude.

Thank you for taking the time and effort to debunk her mischief.

When will these liars become accountable?

Surely there has to become a time when dangerous liars - such as this woman - face the consequences of their bare-faced lies? I say dangerous because making salacious comments about vaccinations or laws that may save lives are dangerous. Many politicians lie every day, few do it with such disregard for the consequences as Michele Bachmann.

The mass media has become such a monster that they will no longer call out liars in the political sphere, they merely revel in their narcissism so as to get more viewers or clicks. And while the good work of such blogs as above is commendable, unfortunately good reporting is no longer the norm for those outlets with the biggest, and most influential, megaphones. Michele Bachmann is a very rich woman because she lies and lies often, loudly.

As much as we all know politicians are, by and large, liars by profession surely there needs to be an example set when someone can be so clearly rebuked for her falsehood, as above, that it could become a legal issue? She's paid by the taxpayer to do an honest job, which she is patently not doing. Any other professional would be fired immediately for publicly airing facetious lies every day.

In front of any judge Bachmann would not be able to defend the above comment - her only plea would be ignorance of the law (which is available to all for free, in black and white and in English) and if her plea would be ignorance surely that would be enough to convince people she is unfit for office?

Fact checkers and websites can call "pants on fie" all they like, and honorable bloggers as such as Mr Black can put the lie in the light of day, but until these sociopathic liars are dealt a powerful blow through the law courts nothing will change and this country's political rhetoric will be drowned out by brainless drivel.

Accountability

Rep. Bachmann--and other fantasizers of her ilk--are not held accountable because the people who keep them in power don't want it. You cannot tell a Bachmann-cult member that she said something that was untrue. If you do, you will be told that the statement was taken out of context/is true, if one follows some hopelessly convoluted line of reasoning/was told to you by the biased liberal media, so therefore she probably never really said it. In extreme cases, sources will be altered to "prove" that the speaker was right all along (see, e.g., the editing of Wikipedia to "prove" that Sarah Palin was correct when she said Paul Revere rode to warn the British).

Yes, she is lying. No, she does not care. Why would she? Her people think it's true, and they are going to re-elect her, no matter what.

any excuse to sling the words "tax increase"

Except, it strikes me that this is only a "tax" if you choose to make it a tax. I mean, if you're so anxious to have a "tax increase" to complain about that you're willing to drop the health insurance coverage you and your family have in order to incur the penalty, you're really living in Bachmannistan.

Drop the health insurance coverage?

The notion that Michele Bachmann would ever drop her GOVERNMENT FUNDED health insurance as a matter of "principle" is so ludicrous as to be incomprehensible. For one thing, she has no principles.

Yes, indeed, presidential

Yes, indeed, presidential mien.

Imagine her finger on the big red button.

But she is only one of the many Republicans riding the crazy train these days.

Take a pill

Bachmann has been uncharacteristically quiet up til now, so she must need more campaign money. I suppose she is also upset because it will be harder for Marcus to get insurance coverage for his gay cure program. An entirely useless individual.

Lies

At what point does a 'mangled fact' become an outright lie?

I see three possibilities for Bachmannn:

First she's incredibly stupid.
Second, she's incredibly ignorant.
Third she's a cynical liar.

I doubt the first two, so I'd give the nod to the third.

Paul, I would lean to accept

Paul, I would lean to accept all three!

But, she's a

tax lawyer. Really.

But as I recall

she worked for the government, so she must have been incompetent.

I agree, who cares, it is only 2-3 percent of the people

I agree with Doug. Why should anybody be worried about offending such a minuscule part of our population?

Let us stick it to them.

It does concern me, however, that such an attitude does not bode well for the two to three percent of our population that would like the legal right to marry their same-sex partner.

Amen

…to Mr. Rovick, Mr. Western, et al. Mrs. Bachmann mangling the facts is almost not "news" in the way the term is normally understood, since gross exaggeration and outright lies are a standard part of her schtick. That she's been elected to ANY office, anywhere in Minnesota, does not speak well for the people who cast ballots for her.

She's an embarrassment to the 6th District, to Minnesota, to Congress, to our system of electing presidents, and to the United States. People in other countries might sometimes believe that a Congressional Representative is, even if ethically bankrupt, at least minimally knowledgeable about public policy. Mrs. Bachmann provides the evidence that that's not necessarily the case.

The real embarrassment

is that people voted for her.

Deja Vu

"Repeat: The tax to which Bachmann was presumably referring has no impact on 97 percent of Americans."

~ Eric Black 2012

"If you make under $250,000, you will not see your taxes increase by a single dime - not your income taxes, not your payroll taxes, not your capital gains taxes. Nothing. Because the last thing we should do in this economy is raise taxes on the middle-class."

~ Barack Hussein Obama, as published on www.barackobama.com, 31 October 2008

doesn't matter how much you make. . .

you have to CHOOSE to pay the government for nothing instead of paying an insurance company to get health coverage in return. I have no sympathy for this taxpayer, considering that those of us who pay health care insurance premiums have been paying for his or her health care all our lives.

There is a sales tax on home sales!

There is a sales tax on home sales! There is an exclusion of $250,000 for singles and an exclusion of $500,000 for couples. Therefore it hits retired seniors who bought a house cheap 40, 50 or 60 years ago.

Your article is a gross misrepresentation or half truths at best. Your article is aimed at your Kool-Aid drinkers who do not understand your bias.

Home prices

In October, 2011, the last month that has nationwide figures available, the average sales price for a new home in the US was $242,300, according to the Census Bureau. The median (half are more, half are less) was $212,300.

Few "retired seniors who bought a house cheap 40, 50 or 60 years ago" are going to be affected by this tax, except in the rantings of conservative commentators.

Taxation of capital gains on the sale of your home

You are incorrect, Mr. Downing.

There is no tax on the overall proceeds from the sale of a home, but on the profit made on the sale of a home.

Individuals can exclude up to $250,000 in profit from the sale of a main home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. In other words, the home must have been your principal residence.

You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main home. Generally, you can claim the exclusion only once every two years. Some exceptions do apply.

To illustrate:

My parents bought a home in 1956 for $12,900.00 and invested substantial sums in captial improvements. For simplicity, let's say they spent another $12,900.00 on those, for a total investment of $25,800.00. It's one the market today (by someone else) for $249,000. If they had kept it and sold it for that amount, they would not be liable for capital gains tax. That would not be triggered unless and until the home sold for more than $525,800.00. They would then be liable for the 15% capital gains tax on the net sale proceeds about that amount.

To continue the example, if it sold for $600,000.00 and they paid $30,000 in sales costs, they'd net $570,000.00, for a taxable gain of $44,200.00. They'd pay a capital gains tax of $6,630 on that. If their income for that year exceeded $250,000 (exclusive of that capital gain?) they'd pay an additional 3.8% on that profit, or another $1,679.60. That's well under the $2,000 referred to in Mr. Black's piece and less than 10% of the $20,000 limit referred to by Rep. Bachmann.

Although a surviving spouse does not get the benefit of the $500,000 exemption from the capital gains tax, and is limited to the $250,000 exemption, he or she is protected to a large extent by the fact that his or her basis (the amount considered to be the cost of acquiring or improving the property) increases at the time of the co-owner's death, by almost 50%. Thus, if the example house was worth $500,000.00 when the first spouse died, the survivor's basis would increase by almost $250,000.00. The net effect would be that the taxable gain would be roughly the same whether sold by the couple or by a survivig spouse.

As I pointed out in my earlier comment, she's a tax lawyer. She knows or should know that what she said was a gross distortion of the facts.

You are correct

that a single retired senior with a capital gain on the sale of a principal residence of over $250,000 would have to pay a capital gains tax (NOT a sales tax) of 15% on the gain over $250,000 (not the entire gain).
So, if the capital gain was $50,000 (a total capital gain of $300,000), the tax would be $7,500. Do you think that this is unreasonable?
And note that this applies only if the total income (including capital gain income) places the seller in the twenty-five percent tax bracket or higher.

The End of the Article Is The Best

"I have called the Bachmann re-election campaign to offer her a chance to defend the accuracy of her statement. If they reply to me, I will certainly update this post"

Defend the accuracy? That's never happened before with Bachmann.

She's an embarassment, and you can't parse it any more with "pants on fire" or any other "both sides do it" meme. Ridiculous.

It's never happened before

No, she has never "defended the accuracy" of anything she has said. You can't defend something that does not exist.

As I said before, accuracy doesn't matter to her people. The most you will ever get from them is a little chuckle about Sister Shelly knowing how to stir up the libruls. "I see the haters are out today."

If You're Buying a New Home

Don't forget, if you're selling your old home to buy a new one, you have a certain amount of time to roll the sale price of the old into the buying price of the new. If the new home costs more than your old one, you owe no taxes whatever.

Michelle Bachamann's Comments

Served their intended purpose,...

They got her on TV and got the rest of us talking about her.

The reality seems to be that, whatever she says,...

in the end it's ALWAYS about Michelle, for the benefit of Michelle, in the service of Michelle's own purposes as a famous "conservative" woman.

Nothing she does is done in the interest of anyone but herself.

But of course she has a GREAT DEAL of company among well-known "conservatives."

Bachmann made this comment on

Bachmann made this comment on CNN's Piers Morgan program. Did Morgan just let her get away with that lie? Or, did he challenge her on the accuracy of it? Did he know enough about the law (in this case, a relatively simple case of what newly, under the ACA, happens to any capital gain above $250,00/500,000 on the sale of a primary residence that doesn't immediately get reinvested in like property) to challenge her? If not, why didn't he? Why is he doing interviews on CNN?

It is the media's responsiblity to inform the public of facts, not to simply give platforms to every blowhard who comes down the pike with whoppers like this.

Good to see a MinnPost challenge here.

James Hamilton is correct

Eric Black - your example in the 4th paragraph from the end is incorrect. A married couple has to have a PROFIT of over $500,000 AND a FAMILY INCOME of over $250,000 to be subject to the capital gains tax on their home (with a few conditions relating to the time lived in the home. See James Hamilton's comment.)

As you noted, 97% of Americans do not have the $250,000 in income to be affected by the 3.8% additional capital gains tax. But of the 3% of those who do have that level of income, virtually none have likely sold a house in the past year or will in the near future sell a house in this housing market for over a $500,000 PROFIT.

I would bet that in Minnesota, over the next few years, this 3.8% capital gains surcharge on home sales will affect a handful of people at most.

Michele Bachmann mangles facts on health care tax

Instead of pandering to your own inner-child may I suggest next time expanding on the huge tax burden imposed on the folks earning 120,000 or less.

Less than 3% more than likely

You have to remember, the group we're talking about, that top 3%, typically have very good lawyers and accountants who's only job is decreasing their clients taxes, any loop holes regarding these home sales will just a few amongst many being exploited in any given circumstance. People with those income levels actually structure their income is such a way as to minimize their taxes, they don't use Turbo-Tax. Most of us live off of paychecks, for this group a paycheck is a fraction of their income.

Why do people keep electing this crazy person?

If she is so against people with insurance or the taxpayers having to pay for people to have insurance, why doesn't she give up her government "taxpayer" paid insurance?

And, since she is a member of congress, and should know better, should know the answers and should know the truth, why doesn't she ever tell the truth, instead of constantly making up barely true statements? As a member of congress, I would want my reputation to be above reproach, and to make sure that what I say is as factual as can be, but I guess the people of Minnesota expect less.

I see you're from Texas

Ed, there are plenty of us here in Minnesota with the same question - why do people keep electing this crazy person?

But it's not that the people of MINNESOTA expect less. Rather, it is - apparently - that the people of the 6th District - where she keeps getting re-elected - have been willing to accept less. For an example, look no further than the comment of Todd Jesse above. Who - if he is not a 6th District voter - sure sounds like a lot of them!

Bachman's health care comments

Mangled ideas produce mangled facts

What the NRA has taught me

Mangled *ideas* don't mangle facts.

Mangled *people* mangle facts.

ACA overall

First off, if Obamacare is so wonderful, why then has Obama allowed many states, unions and themselves (political elites) to opt out? How is that fair to the masses? Do any of you question this? And, how has this bill lowered the cost of medical care? It hasn't nor will it ever. Our personal insurance coverage has been cut in half since this monstrosity passed, many seasoned physicians are no longer accepting medicare or medicaid patients, many great doctors are saying they will quit and no longer practice AND many bright and talented people will no longer pursue a medical career. All these things have happened sinced this bill was signed. The rich and well to do will continue to get the best medical care money can buy while we, the peons of society, the lowly tax payors, will be left with crappy care, denial for care and no care at all. I suggest all of you do your homework and find out for yourselves exactly what this bill is doing to our medical system. Just remember that nothing is free and "if it's too good to be true it isn't".

Sue, I would be interested in specifics

to back up what you've said here. How can a law that won't be fully implemented for more than a year have cost you half your personal insurance coverage? Do you know of specific students who are passing on medical school because of the ACA? The last I heard, there were many more qualified students clamoring to get into med school than there were places to accommodate them. (I have friends with highly talented children who have been repeatedly denied admission). I'm not being snarky, I'm genuinely interested in the evidence for these claims.

It's not ever snark

No one should ever feel apologetic in asking for cites or evidence to back up statements which have been presented as established fact. A big part of the reason we're in the mess we're in is because of how rarely such support is insisted upon (especially by our media).

There would be so much more integrity in the public discourse if people knew they would be held accountable when making "statements of fact".

Bachmann's Facts

Isn't it interesting that Bachmann normally mangles her facts or speaks lies. But the press keeps publishing her stories and she continues to have a following. She is clever enough to keep her name on the radar by speaking outlandish rhetoric that appeals to a segment of our population. But who speaks for those of us who truly care about this country, its citizens, and its future? Where is the justice? Where are those in power who could make a difference but have retreated from public view? Until they surface or we elect politicians that carry the ideals of this nation forward we will continue to read about Bachmann and those of her ilk.

There have been several law

There have been several law that are applicable to protect the interest of many employees and employers in regarding health tax pay; after Obamacare or Affordable Health Care Act finalized there would a cut off in health care tax which provides beneficial results to the victims or the people whom are unable to afford expensive health care programs. So certain tax policies are being introduced to protect the interest of the poor people or people whom are suffering under various health care acts.
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