Monday, October 11

ten tax increases of obamacare

  1.  A 10 percent excise tax on indoor tanning services (a boon to beach towns everywhere).
  2. Elimination of the tax deduction for employers providing Medicare prescription drug coverage. (This is a big part of why companies like 3M and McDonald's are dropping health coverage for their retirees.)
  3. Doubling the penalty for spending money from your tax-free health savings account for non-health-related purposes (as defined by PPACA), to 20 percent.
  4. Capping the amount that employers can contribute to your tax-free flexible spending accounts (employer-sponsored HSAs), at $2,500 a year (it was previously limited by your employer’s generosity).
  5. Banning the use of funds from HSAs and related accounts for the purchase of over-the-counter medications (now you will have to go to your doctor and get a prescription, a waste of precious health-care resources and doctors’ time).
  6. A 0.9 percent Medicare surtax to wages over $200,000 for individuals and $250,000 for married couples, along with a 3.8% Medicare tax on investment income of these individuals. (The 3.8 percent tax will actually apply to the lesser of unearned income or any excess income above $200,000/$250,000.) Because this tax is applied to pre-tax income, these taxes are equivalent to income tax rate increases of 2 percent and 8 percent respectively.
  7. The ability to deduct itemized medical expenses will begin after you spend 10 percent of your income on medical expenses, instead of 7.5 percent.
  8. The employer mandate, which requires that all business with more than 50 employees offer PPACA-approved health plans to all of their employees, or pay a tax of $2,000 per employee, excluding the first 30 employees.
  9. The “Cadillac tax” on high-value health plans: beginning in 2018, plans costing more than $10,200 for individuals, or $27,500 for families, will be assessed a 40 percent excise tax. Insofar as this tax mimics the elimination of the employer tax exclusion, it is the least offensive of Obamacare’s tax increases, but unfortunately that policy goal—harmonizing the tax treatment of individually-purchased and employer-sponsored health insurance—is neutered by the employer mandate described above.
  10. And last, but not least: the individual mandate, which requires everyone to purchase health insurance, or pay a tax: it starts in 2014 at $95 or 1 percent of gross income, whichever is greater; and maxes out in 2016 at the greater of $695 or 2.5 percent of income.
And people question whether or not this law is 'Constitutional'?

2 Comments:

Blogger Gramma 2 Many said...

We fought a war a little over 100 years ago to abolish slavery. Looks like we have to do it again.

10:28 AM  
Blogger Kent said...

We very well might.

10:55 PM  

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