Obamacare (Obamatax) contains 20 new or higher taxes on American families and small businesses

By Nel­son Hack, Mt. Gilead -

Tax­pay­ers need to be reminded that the president’s health­care law cited as the ‘‘Patient Pro­tec­tion and Afford­able Care Act’’ (PPACA), is one of the largest tax increases in Amer­i­can his­tory. The Health Care and Edu­ca­tion Rec­on­cil­i­a­tion Act of 2010 (Pub.L. 111–152, 124 Stat. 1029) is a law that was enacted by the 111th United States Con­gress, by means of the rec­on­cil­i­a­tion process, in order to amend the Patient Pro­tec­tion and Afford­able Care Act (PPACA).

Arranged by their respec­tive effec­tive dates is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Oba­macare (Oba­matax), where to find them in the Act, and how much your taxes are sched­uled to go up as of today:

Taxes that took effect in 2010:

1. Excise Tax on Char­i­ta­ble Hos­pi­tals: $50,000 per hos­pi­tal if they fail to meet new “com­mu­nity health assess­ment needs,” “finan­cial assis­tance,” and “billing and col­lec­tion” rules set by HHS. — PPACA; Page: 1,961–1,971.

2. Cod­i­fi­ca­tion (sys­tem­ati­za­tion) of the “eco­nomic sub­stance doc­trine” (Tax hike of $4.5 bil­lion). This pro­vi­sion allows the IRS to dis­al­low completely-legal tax deduc­tions and other legal tax-minimizing plans just because the IRS deems that the action lacks “sub­stance” and is merely intended to reduce taxes owed. — Rec­on­cil­i­a­tion Act; Page: 108–113.

3. “Black liquor” (sup­port­ing home­grown renew­able energy) (Tax hike of $23.6 bil­lion). This is a tax increase on a type of bio-fuel. — Rec­on­cil­i­a­tion Act; Page: 105.

4. Tax on Inno­va­tor (inven­tor) Drug Com­pa­nies ($22.2 bil­lion /Jan 2010): $2.3 bil­lion annual tax on the indus­try imposed rel­a­tive to share of sales made that year. — PPACA; Page: 1,971–1,980.

5. Blue Cross/Blue Shield Tax Hike ($0.4 billion/Jan 2010): The spe­cial tax deduc­tion in cur­rent law for Blue Cross/Blue Shield com­pa­nies would only be allowed if 85 per­cent or more of pre­mium rev­enues are spent on clin­i­cal ser­vices. — PPACA; Page: 2,004.

6. Tax on Indoor Tan­ning Ser­vices ($2.7 billion/July 1, 2010): New 10 per­cent excise tax on Amer­i­cans using indoor tan­ning salons. — PPACA; Page: 2,397–2,399.

Taxes that took effect in 2011:

7. Med­i­cine Cab­i­net Tax ($5 billion/Jan 2011): Amer­i­cans no longer able to use health sav­ings account (HSA), flex­i­ble spend­ing account (FSA), or health reim­burse­ment (HRA) pre-tax dol­lars to pur­chase non-prescription, over-the-counter med­i­cines (except insulin). — PPACA; Page: 1,957–1,959.

8. HSA With­drawal Tax Hike ($1.4 billion/Jan 2011): Increases addi­tional tax on non-medical early with­drawals from an HSA from 10 to 20 per­cent, dis­ad­van­tag­ing them rel­a­tive to IRAs and other tax-advantaged accounts, which remain at 10 per­cent. — PPACA; Page: 1,959.

Taxes that took effect in 2012:

9. Employer Report­ing of Insur­ance on W-2: Pre­am­ble to tax­ing health ben­e­fits on indi­vid­ual tax returns. : PPACA; Page: 1,957.

Taxes that take effect in 2013:

10. Sur­tax on Invest­ment Income ($123 billion/Jan. 2013): Cre­ation of a new, 3.8 per­cent sur­tax on invest­ment income earned in house­holds mak­ing at least $250,000 ($200,000 sin­gle). This would result in the fol­low­ing top tax rates on invest­ment income. Cap­i­tal Gains 2012 — 15%, 2013 — 23.8%; Div­i­dends 2012 — 15%, 2013 — 43.4%; Other* 2012 — 35%, 2013 — 43.4%.

*Other unearned income includes (for sur­tax pur­poses) gross income from inter­est, annu­ities, roy­al­ties, net rents, pro­ceeds from the sale of sin­gle fam­ily homes, town­houses, co-ops, con­do­mini­ums, and even rental income, and pas­sive income in part­ner­ships and Subchapter-S cor­po­ra­tions. It does not include munic­i­pal bond inter­est or life insur­ance pro­ceeds, since those do not add to gross income. It does not include active trade or busi­ness income, fair mar­ket value sales of own­er­ship in pass-through enti­ties, or dis­tri­b­u­tions from retire­ment plans. The 3.8% sur­tax does not apply to non-resident aliens. — Rec­on­cil­i­a­tion Act; Page: 87–93.

11. Hike in Medicare Pay­roll Tax ($86.8 billion/Jan 2013): Cur­rent law Employer and Employee 1.45% each, self-employed 2.9%. Oba­macare (Oba­matax) Tax Hike — 2013 the first $200,000 ($250,000 Mar­ried) — same as cur­rent law; all remain­ing wages over $200,000 ($250,000 Mar­ried) Employer 1.45%, Employee 2.35%, self-employed 3.8%. Rec­on­cil­i­a­tion Act; Page: 87–93

12. Tax on Med­ical Device Man­u­fac­tur­ers ($20 billion/Jan 2013): Med­ical device man­u­fac­tur­ers employ 360,000 peo­ple in 6000 plants across the coun­try. This law imposes a new 2.3% excise tax, exempts items retail­ing for less than $100. — PPACA; Page: 1,980–1,986

13. “Hair­cut” for Med­ical Item­ized Deduc­tion from 7.5% to 10% of AGI ($15.2 billion/Jan 2013): Cur­rently, those fac­ing high med­ical expenses are allowed a deduc­tion for med­ical expenses to the extent that those expenses exceed 7.5 per­cent of adjusted gross income (AGI). The new pro­vi­sion imposes a thresh­old of 10 per­cent of AGI, Waived for 65+ tax­pay­ers in 2013–2016 only. — PPACA; Page: 1,994–1,995

14. Flex­i­ble Spend­ing Account Cap – aka “Spe­cial Needs Kids Tax” ($13 billion/Jan 2013): Imposes cap on FSAs of $2500 (now unlim­ited) Indexed to infla­tion after 2013. There is one group of FSA own­ers for whom this new cap will be par­tic­u­larly cruel and oner­ous: par­ents of spe­cial needs chil­dren. There are thou­sands of fam­i­lies with spe­cial needs chil­dren in the United States and many of them use FSAs to pay for spe­cial needs edu­ca­tion. Tuition rates at one lead­ing school that teaches spe­cial needs chil­dren in Wash­ing­ton, D.C. (National Child Research Cen­ter) can eas­ily exceed $14,000 per year. Under tax rules, FSA dol­lars can be used to pay for this type of spe­cial needs edu­ca­tion. — PPACA; Page: 2,388–2,389

15. Elim­i­na­tion of tax deduc­tion for employer-provided retire­ment Rx drug cov­er­age in coor­di­na­tion with Medicare Part D ($4.5 billion/Jan 2013)- PPACA; Page: 1,994

16. $500,000 Annual Exec­u­tive Com­pen­sa­tion Limit for Health Insur­ance Exec­u­tives ($0.6 billion/Jan 2013). — PPACA; Page: 1,995–2,000

Taxes that take effect in 2014:

17. Indi­vid­ual Man­date Excise Tax: Start­ing in Jan. 2014, any­one not buy­ing “qual­i­fy­ing” health insur­ance must pay an income sur­tax of 1% of AGI, increas­ing to 2% in 2015, and increas­ing to 2.5% in 2016. Exemp­tions for reli­gious objec­tors, undoc­u­mented immi­grants, pris­on­ers, those earn­ing less than the poverty line, mem­bers of Indian tribes, and hard­ship cases (deter­mined by HHS). — PPACA; Page: 317–337

18. Employer Man­date Tax (Com­bined score of indi­vid­ual and employer man­date tax penalty of $65 bil­lion over 10 years/Jan 2014): If an employer does not offer health cov­er­age, and at least one employee qual­i­fies for a health tax credit, the employer must pay an addi­tional non-deductible tax of $2000 for all full-time employ­ees. Applies to all employ­ers with 50 or more employ­ees. If any employee actu­ally receives cov­er­age through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a wait­ing period to enroll in cov­er­age of 30–60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). — PPACA; Page: 345–346

19. Tax on Health Insur­ers ($60.1 billion/Jan 2014): Annual tax on the indus­try imposed rel­a­tive to health insur­ance pre­mi­ums col­lected that year, phases in grad­u­ally until 2018 fully-imposed on firms with $50 mil­lion in prof­its. — PPACA; Page: 1,986–1,993

Taxes that take effect in 2018:

20. Excise Tax on Com­pre­hen­sive Health Insur­ance Plans ($32 billion/Jan 2018): Start­ing in 2018, new 40 per­cent excise tax on “Cadil­lac” health insur­ance plans ($10,200 single/$27,500 fam­ily), higher thresh­old ($11,500 single/$29,450 fam­ily) for early retirees and high-risk pro­fes­sions. CPI +1 per­cent­age point indexed. — PPACA; Page: 1,941–1,956

Adding up all the dif­fer­ent spend­ing pro­vi­sions in the health care law, how­ever, (includ­ing clos­ing the Medicare ‘donut hole,’ imple­men­ta­tion costs, and other spend­ing) total gross spend­ing over the FY 2010–19 period is about $1.4 tril­lion, based on CBO estimates.

They don’t seem to miss any­one or any­thing that could be taxed. By the way, note how many of these new and higher taxes fall on peo­ple mak­ing less than $250,000 a year, despite Obama’s promise that Oba­macare (Oba­matax) would not cost any­one in the mid­dle class a dime.

Also remem­ber Obama say­ing that we need a “civil­ian army that is just as well trained and funded as the mil­i­tary”? Well, here it is, tucked away in the mid­dle of the over 2,000 page health care mon­stros­ity that nobody in Con­gress both­ered to even read. This is not just an expan­sion of the National Guard, no. This is a pri­vate health corps that is to be trained by the mil­i­tary and will be under the direct com­mand of the Pres­i­dent. — PPACA; Page 496.

Posted by Taylor Kaser on Jul 31 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.