Adam Radman

IRS Obamacare Power of the Day: Medical Device Tax


Posted by Adam Radman, Ryan Ellis on Friday, August 23rd, 2013, 4:02 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Manufacturers of medical devices like pacemakers, crutches, and prosthetics face a new 2.3% gross receipts tax under Obamacare.  That means they have to pay the tax even in a year where they lose money.

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IRS Obamacare Power of the Day: Saver Surtax


Posted by Adam Radman, Ryan Ellis on Thursday, August 22nd, 2013, 12:01 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Obamacare imposes a 3.8% surtax on investment income for super-saver families.  As a result, the top capital gains and dividends rate is now nearly 24%.

 

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IRS Obamacare Power of the Day: Slacker Mandate


Posted by Adam Radman, Ryan Ellis on Monday, August 19th, 2013, 4:40 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Obamacare says that health insurance companies are forced to cover “children” up to age 26.  Like Peter Pan, Jay and Silent Bob never have to grow up.

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IRS Obamacare Power of the Day: "Indoor Tanning Tax"


Posted by Adam Radman, Ryan Ellis on Wednesday, August 14th, 2013, 5:12 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review

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This Obamacare tax increase has the distinction of being the first to go into effect (July 2010). Slipped into the bill by Sen. Harry Reid (D-Nev.) behind closed doors in the middle of the night, this tax hike replaced the planned Obamacare "Botax" on cosmetic surgery.

This petty, burdensome, nanny-state tax affects both the business owner and the end user.  Industry estimates from the Indoor Tanning Association show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women. 

There is no exception granted for those making less than $250,000 meaning it is yet another tax that violates Obama's "firm pledge" not to raise "any form" of tax on Americans making less than this amount.

Making matters worse: According to a Treasury Inspector General for Tax Administration report, the Obama IRS didn't bother to issue compliance guidelines until three quarterly filing deadlines had passed:  "By the time [IRS] notices were issued, tanning excise tax returns had been due for three quarters." This is yet another sign that the Obama administration is ill-prepared for Obamacare implementation.

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IRS Obamacare Power of the Day: Payroll tax Hike


Posted by Adam Radman, Ryan Ellis on Tuesday, August 13th, 2013, 5:36 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Obamacare raises the top Medicare payroll tax rate from 2.9% to 3.8%.

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IRS Obamacare Power of the Day: High Medical Bills Tax


Posted by Adam Radman, Ryan Ellis on Thursday, August 8th, 2013, 12:24 PM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review. 

Americans have long been allowed to deduct out of pocket medical expenses as an itemized deduction on their taxes. They cannot have already benefited from other tax provisions for health care like tax-free employer-provided care or tax-free accounts like flexible spending accounts (FSAs) or health savings accounts (HSAs). A full list of qualified expenses can be found in IRS Publication 502.

After totaling all unreimbursed, out-of-pocket medical expenses, the taxpayer must then subtract from this figure an amount equal to 7.5 percent of the taxpayer's adjusted gross income (AGI). This subtraction amount is known commonly as a "haircut."

According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. They deducted $80 billion in medical expenses after applying the “haircut.” The Office of Management and Budget reports that this tax deduction saves these taxpayers upwards of $10 billion annually.

The Obamacare law made one change to this tax provision: it raised the "haircut" from 7.5 percent of AGI to 10 percent of AGI. Since virtually all taxpayers claiming this income tax deduction make less than $200,000 per year, the income tax hike falls almost exclusively on the middle class:

-Virtually every family taking this deduction made less than $200,000 in 2009. Over 90 percent earned less than $100,000.

-The average taxpayer claiming this deduction earns just over $53,000 annually.

-ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 - $400 per year.

-This income tax increase is focused on families with the largest medical bills that weren't covered by insurance. So the target population is low-and middle-income families with debilitating medical costs. That's a good definition of the opposite of “affordable” or “caring.”

According to the Joint Tax Committee, this tax increase is scheduled to raise between $2 billion and $3 billion annually. That may be a drop in the bucket in Washington DC, but try telling that to the $53,000 family with high medical bills that just saw a tax increase.

The tax is a clear violation of President Obama's "firm pledge" in 2008 to not enact "any form of tax increase" on these families.

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IRS Obamacare Power of the Day: Red Tape Tax Credit


Posted by Adam Radman, Ryan Ellis on Wednesday, June 26th, 2013, 9:31 AM PERMALINK


Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Obamacare creates a tax credit for small employers to comply with Obamacare.  There’s only one problem—the tax credit is so complex, the IRS and CBO report that no one is using it.

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Taxpayer Protection Pledge Signers Boustany and Landry Prep for Runoff in Louisiana


Posted by Adam Radman on Wednesday, November 14th, 2012, 5:43 PM PERMALINK


In the wake of the election, there has been some confusion over whether Reps. Charles Boustany and Jeff Landry have signed ATR’s Taxpayer Protection Pledge. Both candidates have, in fact, signed the Taxpayer Protection Pledge for this election cycle.

The Pledge, sponsored by Americans for Tax Reform, commits signers to “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses … and oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates."
 
ATR confirms that Rep. Charles Boustany [Pledge] is a long-time supporter of the Pledge, and Rep. Jeff Landry [Pledge] has been a signer since he began his first term in 2010. Neither candidate has ever broken their Pledge to taxpayers.
 
“I want to once again congratulate Dr. Boustany and Mr. Landry for signing the Taxpayer Protection Pledge. Both Congressmen have proven their commitment to opposing higher taxes. Louisiana taxpayers can rest assured that they will continue to have a voice in Congress that stands up for their interests,” said Grover Norquist, president of ATR.

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Biden Should Be the Last Person to Mention Tax Pledges


Posted by Adam Radman on Thursday, October 18th, 2012, 5:56 PM PERMALINK


In a recent campaign stop in Nevada, Vice President Biden attacked Gov. Romney for signing the Taxpayer Protection Pledge to oppose and veto any tax increases. During his speech, Biden purposely distorted the meaning of the Pledge by saying:

“These guys signed a pledge to Grover Norquist, instead they should sign a pledge to you, the middle-class people.” [Quote]

As Americans for Tax Reform has repeatedly pointed out, the language of the Taxpayer Protection Pledge is quite clear. The Pledge is a personal, written commitment by an elected official to taxpayers. The Pledge is made in writing to voters before a politician is elected so that these voters can hold the politician accountable on the tax issue. Pledge enforcement is done by voters, not by Grover Norquist or Americans for Tax Reform.

Back in 2008, Obama and Biden made a tax promise of their own, which they have subsequently broken on numerous occasions.

During the Oct. 3, 2008 vice-presidential debate, in front of 70 million viewers, then-candidate Joe Biden made a promise to the American people:

 “No one making less than $250,000 under Barack Obama’s plan will see one single penny of their tax raised whether it’s their capital gains tax, their income tax, investment tax, any tax.” [Transcript]

Biden’s promise echoed that of then-candidate Barack Obama.  Speaking in Dover, New Hampshire on Sept. 12, 2008, Obama said:

“I can make a firm pledge.  Under my plan, no family making less than $250,000 a year will see any form of tax increase.  Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”  [Video]

The Obama-Biden promise was shattered when President Obama signed the Affordable Care Act into law.  Obamacare contains at least seven direct tax hikes that unquestionably violate the Obama-Biden pledge. The five worst are described below:

1. The Obamacare Individual Mandate Non-Compliance Tax:

Starting in 2014, 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. The Congressional Budget Office recently estimated that six million American families will be liable for the tax, and as pointed out by the Associated Press:  “Most would be in the middle class.”

In addition, 100 percent of Americans filing a tax return (140 million filers) will be forced to submit paperwork to the IRS showing they either had “qualifying” health insurance for every month of the tax year or they obtained an exemption to the mandate.

Americans liable for the surtax will pay according to the following schedule:

 

1 Adult

2 Adults

3+ Adults

2014

1% AGI/$95

1% AGI/$190

1% AGI/$285

2015

2% AGI/$325

2% AGI/$650

2% AGI/$975

2016 +

2.5% AGI/$695

2.5% AGI/$1390

2.5% AGI/$2085

 

2. The Obamacare Tax on Union Member and Early Retiree Health Insurance Plans:

Obamacare imposes 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.  This Obamacare tax will be levied on insurance policies whose premiums exceed $10,200 for an individual and $27,500 for a family.  Middle class union members tend to be covered by such plans in states like Ohio, Pennsylvania, Wisconsin, and Michigan.

3. The Obamacare Flexible Spending Account Tax – a.k.a. “Special Needs Kids Tax”:

The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will, starting in 2013, face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set their own cap). 

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 several million middle class families with special needs children in the United States, and many of them use pre-tax FSA dollars 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. This $13 billion Obamacare tax hike will severely limit the options available to these families

4. The Obamacare Medicine Cabinet Tax: 

This $20 billion Obamacare tax increase prevents Americans from being able to use their pre-tax health accounts to purchase non-prescription, over-the-counter medicines. 

According to a study by the Kaiser Family Foundation, 11 percent of Americans who receive health insurance from their workplace are enrolled in a Health Savings Account qualifying health insurance plan.  This amounts to an estimated 16 million covered lives.

Using data from the Employee Benefit Research Institute, it is estimated that 30-35 million Americans take advantage of FSAs at work.

The Obamacare Medicine Cabinet tax prevents these tens of millions of middle class families from being able to purchase everyday medicines using these accounts. Examples of items no longer able to be purchased with pre-tax dollars without a prescription include pain relievers, cold and flu medicines, antacids, nasal sprays, and children’s vitamins.

5. The Obamacare High Medical Bills Tax:

Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  Beginning in 2013, this $15 billion tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans.  This tax provision will most harm near retirees and middle class families with modest incomes but high medical bills.

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Nick Lampson Falsely Attacks Randy Weber Over the Taxpayer Protection Pledge


Posted by Adam Radman on Friday, October 12th, 2012, 4:48 PM PERMALINK


In a blatant attempt to mislead the voters of TX-14, the Nick Lampson campaign recently released a false attack ad against Randy Weber for signing the Taxpayer Protection Pledge. Lying about the Taxpayer Protection Pledge isn’t a new tactic for the Democrats, nor is ignoring the fact that independent organizations have called them out on their fallacious claims.

The TV ad suggests that as a Pledge signer, Randy Weber has signed a pledge to “protect special tax breaks for corporations that send American jobs overseas.” Unfortunately, when the same claim was levied against Pledge signers in 2010, the Associated Press labeled the attack as “one of the wildest claims of the 2010 campaign.” Adding insult to injury, the non-partisan FactCheck.org rated the attacks against the Pledge as “blatantly false.”

The Taxpayer Protection Pledge that Randy Weber signed reads as follows:

I, Randy Weber, pledge to the taxpayers of the 14th District of the state of Texas, and to the American People that I will:

ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and

TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing taxes.

As FactCheck.org has noted, “[The Pledge] leaves ample room for the elimination of any number of special tax breaks so long as the overall level of taxation is not increased. To claim that this ‘protects’ a particular provision is simply untrue.” The overall goal of Pledge signers is to reduce the size of the government by focusing on spending alone.

When the DCCC continued with the same attack against Republicans in 2010, another independent fact-checking organization weighed in. To the accusation that the Pledge “protects” companies who ship jobs overseas, Politifact noted that the claim about the Pledge included a “spurious connection” that requires a “huge leap of logic,” concluding that the DCCC’s claim was “False.”

“I applaud Randy Weber for making a personal, written commitment to oppose efforts to increase taxes on Texas taxpayers. Taxpayers everywhere are fed up with the tax-and-spend policies coming out of Washington, DC” said Grover Norquist, president of Americans for Tax Reform. “The most recent false claims by Lampson further demonstrate the difficult time Democrats are going to have defending the Democrat ‘plan’ for economic recovery: higher taxes and more government spending,” continued Norquist.

 

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