Tuesday, when President Barack Obama was speaking at the Clinton Global Initiatives, he actually admitted his health care law, the Affordable Care Act, or Obamacare as it has become known, raises taxes.
Here’s the quote:
“So what we did – it’s paid for by a combination of things. We did raise taxes on some things,” Obama said.
Ah yes, the master of understatement has struck again. So just for grins, let’s list “some things” on which the law raises taxes, according to Americans for Tax Reform.
Let’s start with the Medical Device Tax, an issue dear to our community. Medical device manufacturers employ 409,000 people in 12,000 plants across the country. According to OrthoWorx, right here in Warsaw, orthopedic manufacturing represents approximately 45 percent of Kosciusko County’s employment – nearly 13,000 total jobs. Obamacare imposes a new 2.3 percent excise tax on gross sales. That’s sales. That means the government gets its cut even if a company doesn’t earn a profit in a given year.
This tax is likely to kill jobs in small businesses and will have a negative impact on research and development across the medical device business sector.
High Medical Bills Tax. If you have high medical expenses, you can claim a deduction on your income taxes. The expenses have to reach 7.5 percent of your adjusted gross income. Obamacare ups that to 10 percent. So it makes it harder to claim the deduction while simultaneously making more of your income taxable. Brilliant, eh?
ATR points out that 10 million families took advantage of this tax deduction in 2009, the latest year of available data from the IRS. Almost all are middle class. The average taxpayer claiming this deduction, earned just more than $53,000 annually. ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 to $400 per year
Flexible Spending Account Tax.
Some 30 to 35 million Americans have a Flexible Spending Account. That’s where you divert some of your earnings – pre-tax – into an account to pay for basic medical needs. Obamacare caps this at $2,500 a year. ATR calculates this will squeeze $13 billion of tax money from average Americans over the next  10 years.
ATR also notes that there is one particular group of flex-spending users who will be hit hard – parents of special needs children. Nationwide, several million families use the accounts to pay for special needs education, where tuition rates can exceed $10,000 a year. Under current rules, flex-spending dollars can be used for this type of special needs education. Still can, but only up to $2,500 a year.
Super Saver Surtax.
There will be a new 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). Eh, who cares. Those people can afford it, right?
Medicare Payroll Tax Increase.
Currently, everybody pays a Medicare payroll tax of 1.45 percent on all earned income. Beginning in 2013, this tax will be increased by 0.9 percent to 2.35 percent on earned income more than $200,000 for individuals and $250,000 for married filing joint.
Medicare Contribution Tax.
A new Medicare contribution tax of 3.8 percent imposed on investment income, which includes interest, dividends, capital gain, net rental income and all other passive income. This is in addition to the ordinary income or capital gain tax that investment income is already subject to. The new tax will only be imposed on individuals with adjusted gross income more than $200,000 ($250,000 for joint filers).
Individual Mandate Non-Compliance Tax.
Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services – must pay an income surtax to the IRS. According to ATR, the Congressional Budget Office recently estimated that 6 million American families will be liable for the tax, and as pointed out by the Associated Press: “Most would be in the middle class.”
(Everybody filling a tax return in 2014 will be required to show the IRS they carried qualifying health insurance every month for the whole year or show they had an exemption.)
Employer Mandate Tax.
This is the one that was delayed to 2015. 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 $2,000 for all full-time employees. This provision 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 $3,000. If the employer requires a waiting period to enroll in coverage of 30 to 60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).
Tax on Health Insurers.
Annual tax on the industry imposed relative to health insurance premiums collected that year. The tax phases in gradually until 2018. Fully imposed on firms with $50 million in profits.
Cadillac Insurance Plan Tax.
A new 40 percent excise tax on high cost or “Cadillac” health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans.
To be clear, this isn’t all the “things” that are getting taxed because of Obamacare. And despite all of this, the program is still expected to run $3 trillion in the red over 10 years.
It’s not like we aren’t being taxed to death as it is.
The U.S. Census Bureau reports that revenue from state and local income, sales, motor fuel, motor vehicle and alcohol beverage taxes hit an all-time high in the second quarter this year.
In no quarter of any year since the Census Bureau first started tracking state and local tax revenues in 1962 have state and local governments fleeced the taxpayers more than from April to June of this year.
Americans paid a record of $114.032 billion in state and local individual income taxes in the second quarter of this year, the Census Bureau reports. That was $7.787 billion – or 7.3 percent – more than the previous all-time record of $106.245 billion in state and local individual income taxes that Americans paid in the second quarter of 2008.
That’s just the state and local income taxes. For space considerations, I’m not delving into the motor fuel, motor vehicle and alcohol beverage taxes. Or property taxes.
And you have to consider the fact that this happened in a wage-depressed, stagnant economy with high unemployment.
So fewer of us are working, we’re making less money, and they still collected record amounts of taxes.
As any fool can plainly see, the fix for this – as President Obama is so quick to point out – is that we all just need to pay our fair share.
Just ask a liberal politician, he’ll tell you – government doesn’t spend too much, we’re just taxed too little.