I’ve been somewhat occupied this afternoon and there is a lot that’s happening. Let me offer a few quick observations on the Obama tax/healthcare proposals and give you some links to the other important items.

Details of the means that President Obama intends to employ to pay for his goal of extending health care to everyone are beginning to emerge. He plans to generate $634 billion in new revenues from upper income tax increases and cuts to government health spending. The estimates for the new health care plan’s cost run to $1 trillion, so there is still a big gap.

The income tax increases will restrict the amount of deductions that filers in the 33% and 35% bracket will be allowed to take. Instead of allowing deductions up to the amount of the marginal rate, these taxpayers will see their deductions limited to 28%.

There are no more details that I’ve seen so far so there are innumerable questions. What about capital gains, how are they going to treat fees in limited partnerships, are deductions from pass through entities aggregated or are we only looking at 1040 deductions. That’s just for starters. This has all the makings of a tax accountants dream and further complications to an incomprehensible tax code.

As for the cuts in health care, it looks like it comes out of Medicare Advantage. Here’s how the WSJ describes it:

The biggest chunk of money to be cut, $177 billion over 10 years, would come from changing the way that private managed care plans participating in Medicare are paid. Under current law, payments in the Medicare Advantage program are set by a formula. The result is that private companies, on average, are paid 14% more to care for a patient than the government would normally spend on that person’s care through the traditional Medicare program.

The Obama plan would have private plans bid to offer coverage in a given geographic area; insurers would then be paid based on an average of the bids. The administration estimates that the result would be that private plans would be paid about the same as the government normally spends per participant.

The administration will also propose a new measure to make generic drugs available more quickly. It would also change the formula for how brand-name drugs are paid for through the Medicaid program.

Mr. Obama will also propose new ways to tie payments to performance in Medicare for both hospitals and doctors, an initiative aimed at improving quality as well as reducing cost.

I’m no expert on health care so I can’t offer any thoughtful comment. I’ll wait until I can get the benefit of some pro and con opinions on this one.

I will probably weigh in later today with some further thoughts on these measures and the others that I’m linking to below.

more: WSJ Tax and Health Initiative, FDIC Stress Test FAQ and Criteria, Treasury Department Capital Assistance Program