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John Kartch

Michael Bloomberg: Raising taxes on the rich is "about as dumb a policy as I can think of."


Posted by John Kartch on Friday, November 2nd, 2012, 2:53 PM PERMALINK


New York mayor Michael Bloomberg, who endorsed President Barack Obama on Wednesday, announced on Oct. 8 his view that raising taxes on the rich was “about as dumb a policy as I can think of.”   

President Obama has been vague on what he would do if given a second term, but he’s been loud and clear about one thing: His desire to raise the top two marginal income tax rates. Obama’s plan would raise taxes on one million small businesses.

Bloomberg’s statement was in reaction to New York mayoral candidates’ advocacy for higher taxes on upper earners.  As quoted by Capital New York on Oct. 8:

"Well if you want to drive out the 1 percent of the people that pay roughly 50 percent of the taxes, or the 10 percent of the people that pay 70-odd percent of the taxes, that's as good a strategy as I know," he responded. "That's exactly the ways to do it, and then our revenue would go away, and we wouldn't be able to have cops to keep us safe, firefighters to rescue us, teachers to educate our kids."

According to the Oct. 13 New York Post Bloomberg also said:

“You saw in France people moving out when they raised the tax rates.  Whether you like it or not, the wealthy are mobile.”

Unfortunately for small business owners and their employees, President Obama disagrees. 

According to the IRS, most small business profits face taxation in households making more than $200,000 per year.  The Obama-Biden plan will raise taxes on a majority of small business profits and hit those companies which employ a majority of Americans who work for small businesses.

Even a Big Gulp-banning, gun-grabbing mayor can understand that, Mr. President.

View PDF here

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Biden's Tax Malarkey


Posted by John Kartch on Friday, October 12th, 2012, 12:39 PM PERMALINK


During Thursday’s debate, Vice-President Joe Biden engaged – in his words – in a fit of malarkey on the tax issue.  Below are the details of what he claimed and what the real truth is:

Biden:  “97 percent of the small businesses in America pay less - make less than $250,000. Let me tell you who some of those other small businesses are: hedge funds that make $600 million, $800 million a year. That's – that's what they count as small businesses, because they're pass-through.”

The Obama-Biden plan to raise the top two marginal income tax rates (from 33 and 35 percent today to 36 and 39.6 percent, respectively) is a hike in America’s small business tax rate.  Because small businesses pay taxes using the individual rates, a hike in these rates is a hike in the small business tax rate.  According to IRS data, a majority of small business profits face taxation in the top two brackets. 

Studies have shown that a majority of everyone in America who works for a small business works for one that will see its tax rate rise under the Obama-Biden plan.  A recent study by Ernst and Young projects that this tax hike will kill over 700,000 small employer jobs.  The study shouldn’t come as a surprise, as higher taxes on businesses often means layoffs.

Despite what Vice President Biden would have you believe, the one million small businesses burdened by this tax increase are not simply far distant financial pass-throughs – they are the Main Street businesses that Americans see every day.

Biden: “We went ahead and made sure that we cut taxes for the middle class.”

Obama and Biden have clearly broken their 2008 “firm pledge” not to sign “any form of tax increase” on families making less than $250,000.  As a conservative estimate, at least seven Obamacare tax hikes fall directly on middle class families, and many more will raise costs indirectly for these families.  Here is a list of the top five worst Obama-Biden taxes that hit the middle class.

Meanwhile the Romney-Ryan plan will cut taxes for lower and middle-income households. The lowest rate will drop from 10 to 8 percent.  The 15 percent rate (which most middle income families face at the margin) will drop from 15 to 12 percent. Furthermore, Romney will repeal Obamacare, including the 20 new or higher taxes in that law. 

Of recent note, Obama has altered his tax pledge: In a second term, he only promises not to raise income taxes on those making less than $250,000, and only for one year. After the one year has come and gone, all taxes are fair game, and at any income level. With nearly $7 trillion in projected deficits in President Obama’s budget, it’s pretty clear where this Administration is coming next for higher taxes—the middle class.

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Flashback: Biden Calls Paying Higher Taxes "Patriotic"


Posted by John Kartch on Thursday, October 11th, 2012, 6:16 PM PERMALINK


As reported by the Associated Press on Sept. 18, 2008 (“Biden calls paying higher taxes a patriotic act”) then-candidate Joe Biden, advocating for the Obama tax increase plan, said:

“It's time to be patriotic ... time to jump in, time to be part of the deal, time to help get America out of the rut.”

At the time, the Obama-Biden ticket was running on a plan to raise the top two marginal income tax rates from 33 and 35 percent to 36 and 39.6 percent, respectively. According to IRS data, the majority of small employer profits face taxation at these marginal tax rates.

As noted by Samuel Johnson, appeals to false patriotism are “the last refuge of a scoundrel.”

Watch the Biden “patriotic” video clip here.

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Shattered: Biden Debate Promise Not to Raise "any tax" on Middle-Class


Posted by John Kartch on Thursday, October 11th, 2012, 4:10 PM PERMALINK


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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Top Five Obama-Biden Tax Hikes Burying the Middle Class


Posted by Ryan Ellis, John Kartch on Wednesday, October 3rd, 2012, 11:07 AM PERMALINK


The following are the top five tax increases on the middle class signed into law by the Obama-Biden administration:

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.

Follow the authors on Twitter: @RyanLEllis and @JohnKartch

 Click here for a PDF version of this document.

Photo Credit: 
Chuck Kennedy

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Obama's Altered Tax Pledge


Posted by John Kartch on Wednesday, August 22nd, 2012, 1:21 PM PERMALINK


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President Obama Alters Middle Class Tax Promise


Posted by John Kartch on Friday, August 10th, 2012, 12:27 PM PERMALINK


President Barack Obama has altered his 2008 “firm pledge” that no family making less than $250,000 per year would see “any form of tax increase.” Obama has now limited the pledge to merely “income taxes” – and only for “next year.”

On Sept. 12, 2008, speaking in Dover, New Hampshire, candidate 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.

But this Wednesday, August 8, speaking in Grand Junction, Colorado, President Obama said:

“So if your family makes under $250,000 -- which, by the way, 98 percent of Americans do -- 97 percent of small businesses do, you will not see your income taxes increase by a single dime next year.  That’s my plan.” 

Why the abrupt shift? It may have something to do with the fact that President Obama has already broken his “firm pledge” to the American people on two occasions:

On Feb. 4, 2009, just sixteen days into his presidency, President Obama signed into law a 156 percent increase in the federal excise tax on tobacco – a hike of 62 cents per pack.  The median income of smokers was just over $36,000 at the time of the bill signing.

When the tax increase took effect on April 1, 2009, the Associated Press rightly called out Obama for the broken promise, in an article titled PROMISES, PROMISES:  Obama Tax Pledge Up In Smoke.

In the article, White House spokesman Reid Cherlin tried to pull a fast one on AP reporter Calvin Woodward.  Cherlin falsely claimed President Obama’s tax pledge applied only to “income or payroll taxes”.  Cherlin said: "The president's position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000, and that's a promise he has kept." 

The AP noted the sudden shift from “any form of tax increase” to just “income or payroll taxes” and pointed out that Obama’s 2008 campaign used the $250,000 promise to defend against Republican allegations that Obama would raise taxes on electricity and home heating oil. From the AP article:

The Democratic campaign used such statements to counter Republican assertions that Obama would raise taxes in a multitude of direct and indirect ways, recalled Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania.

"I think a reasonable person would have concluded that Senator Obama had made a 'no new taxes' pledge to every couple or family making less than $250,000," she said.

Jamieson noted GOP ads that claimed Obama would raise taxes on electricity and home heating oil. "They rebutted both with the $250,000 claim," she said of the Obama campaign, "so they did extend the rebuttal beyond income and payroll."

President Obama’s tax increases on families making less than $250,000 didn’t stop with tobacco. The “any form of tax increase” promise was broken a second time when President Obama signed the healthcare bill into law, which contains at least seven new or higher taxes that hit families making less than $250,000 per year.

On April 15, 2009, when the healthcare push was getting underway, White House spokesman Robert Gibbs was asked if Obama’s “firm pledge” applied to the health care bill. Gibbs replied:

 “The statement didn’t come with caveats.”  [Transcript] [Video]

But the President’s March 23, 2010 signature on Obamacare made possible the following new or higher taxes – none of which exempts families making less than $250,000:

1. The Obamacare Individual Mandate Tax:  Starting in 2014, anyone not buying “qualifying” health insurance – as defined by Obama-appointed bureaucrats -- must pay an income surtax according to the higher of the following:

 

 

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 Medicine Cabinet Tax:  This tax took effect in January 2011 and prevents Americans from being able to use their 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).

3. The Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax”: Starting in January 2013, Obamacare imposes a cap on FSAs of $2500 (now unlimited under federal law). 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

4. The Obamacare "Haircut" to the Medical Itemized Deduction from 7.5% to 10% of AGI: 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).  Beginning in January 2013, this new Obamacare provision imposes a threshold of 10 percent of AGI. 

5. The Obamacare HSA Withdrawal Tax Hike: This provision, which took effect in January 2011, increases the 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.

6. The Obamacare Tax on Indoor Tanning Services:  Since July of 2010, Americans using indoor tanning salons face a new 10 percent excise tax.

7. Obamacare Excise Tax on Comprehensive Health Insurance Plans: Starting in 2018, this provision imposes a new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher thresholds exists for early retirees and those in high-risk professions.

On Wednesday, President Obama also added a curious time conditional to his revised promise, saying he would not raise income taxes “next year” on families making less than $250,000.

Taxpayers may be asking themselves what other tax increases await them if President Obama is given a second term.

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Coburn to GOP: Hike Taxes or Find Another Country to Live In


Posted by John Kartch on Monday, July 16th, 2012, 2:22 PM PERMALINK


As a guest on C-SPAN's Washington Journal on December 14, 2011, Senator Tom Coburn said:

"I would tell every Republican out there: if you think in this time of divided government that we're not going to be able to come to an agreement without some revenue increases, than you might as well go find another country to live in.  There is no way we're going to solve our problems without compromise.  And part of that compromise is that we are going to have to have more revenues."

See also Coburn's Top Five "Let Hike Taxes" Quotations

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Flashback: Deer-in-Headlights Goolsbee Dodges Questions about Obamacare Tax Hikes


Posted by John Kartch, Ryan Ellis on Sunday, July 1st, 2012, 4:17 PM PERMALINK


During his testimony at a Jan. 26, 2011 House Ways & Means Committee hearing on the new healthcare law, Austan Goolsbee -- then-chairman of the White House Council of Economic Advisers -- squirmed and obfuscated while repeatedly denying an inconvenient truth about Obamacare: the law contains at least seven tax hikes on those making less than $250,000 per year -- a violation of President Obama’s central campaign promise not to sign into law “any form of tax increase” on these families.

Rep. Pat Tiberi (R-Ohio) simply asked Goolsbee whether a series of tax hikes in Obamacare were indeed tax hikes.

Below are the cryptic and dishonest replies from Dr. Goolsbee when asked whether each of the provisions in Obamacare were indeed a tax increase (Click here to watch the video clip):

Rep. Tiberi: A new tax on individuals who did not purchase government approved health insurance?

Austan Goolsbee: uh- I don’t think that’s an accurate way to describe it, no.

Tiberi: Not a new tax?

Goolsbee: I don’t think that’s an accurate way.

(Americans for Tax Reform:  The individual mandate excise tax takes effect in 2014, and when fully phased in two years later will require those not purchasing “qualifying” health insurance – as defined by the government – will have to pay a tax equaling 2.5% of AGI or $695, whichever is greater).

Tiberi: A new ban on the use of flexible savings accounts, HSAs, HRAs, on using pre-tax income to purchase over the counter drugs?

Goolsbee: uh I-I don’t, that’s not a tax increase of a normal form and that’s part of a broader reform effort obviously.

(Americans for Tax Reform: Under Obamacare, an individual may no longer use Flexible Savings Accounts (FSAs), Health Savings Accounts (HSAs), or Health Reimbursement Accounts (HRAs) to purchase over-the-counter medicines. The 40 million Americans using these accounts can no longer purchase items such as aspirin, cold and flu medicine, menstrual cramp pain relievers, antihistamines, and antacids).

Tiberi: An increase from 7 and a half percent to 10 percent of income the threshold after which individuals can deduct out of pocket medical expenses?

Goolsbee: . . . (shakes his head)

Tiberi: Not a tax increase?

Goolsbee: uh, I, as I’m saying, the, I do not consider the affordable care act as a whole to be a tax increase on people less than $200,000.

(Americans for Tax Reform: This provision puts a tough burden on individuals with particularly high medical expenses. Currently, an individual can deduct any amount of income they spent on medical expenses to the extent those expenses exceed 7.5 percent of AGI from their income. The Obamacare law raises that threshold to 10 percent. As a result families will be able to deduct less in medical expenses than they can currently. By shrinking this deduction, Obamacare increases (again) the total amount of taxable income. This means those individuals are going to have to pay more in taxes).

Tiberi: There are two more. Impose a new $2500 cap on family’s ability to use pre-tax dollars to fund an FSA?

Goolsbee: I twen- could you—

Tiberi: $2500 cap on—

Goolsbee: $2500 cap; I don’t, I don’t consider that a tax increase.

(Americans for Tax Reform:  Taking effect in January 2013, this is another provision in Obamacare that leads to a substantial amount of pre-tax income spent on medical expenses becoming taxable income; again raising taxes by raising the amount of income that an individual is taxed on.

Currently, families can put their pre-tax income into a Flexible Savings Account (FSA) without a federally imposed cap to pay for various medical expenses. This greatly helps with parents trying to pay for expensive prescriptions for their children or parents who put money into the account to pay tuition for special needs schools or tutoring. By placing the $2500 cap on the amount of pre-tax income that can be used in this way, families will see their taxes potentially skyrocket depending on how much over that amount that they currently put in their FSAs. This cap has no exceptions of any kind, not for special needs children, not for Americans making less than $200,000 per year, and not for families making less than $250,000 per year).

Tiberi: A new ten percent tax on indoor tanning services?

Goolsbee: (chuckles) uh. . .

Tiberi: Not a tax increase?

Goolsbee: Well, that seems like a strictly voluntary, uh, thing that one could choose.

Tiberi: But not a tax increase?

Goolsbee: . . . (shrugs)

(Americans for Tax Reform:  Goolsbee’s laughter shows his cluelessness as to how this tax has been impacting Americans since it went into effect July 1, 2010.  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).

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Full List of Obamacare Tax Hikes: Listed by Size of Tax Hike


Posted by John Kartch on Friday, June 29th, 2012, 3:43 PM PERMALINK


WASHINGTON, DC -- Obamacare contains 20 new or higher taxes on American families and small businesses. Arranged by their respective sizes according to CBO scores, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, their effective dates, and where to find them in the bill.

$123 Billion: Surtax on Investment Income (Takes effect Jan. 2013): 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

Dividends

Other*

2012

15%

15%

35%

2013+

23.8%

43.4%

43.4%

 

*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, 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. (Bill: Reconciliation Act; Page: 87-93)

$86 Billion: Hike in Medicare Payroll Tax (Takes effect Jan. 2013): Current law and changes:

 

First $200,000
($250,000 Married)
Employer/Employee

All Remaining Wages
Employer/Employee

Current Law

1.45%/1.45%
2.9% self-employed

1.45%/1.45%
2.9% self-employed

Obamacare Tax Hike

1.45%/1.45%
2.9% self-employed

1.45%/2.35%
3.8% self-employed

 
Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93
 

$65 Billion: Individual Mandate Excise Tax and Employer Mandate Tax (Both taxes take effect Jan. 2014):

Individual: Anyone not buying “qualifying” health insurance as defined by Obama-appointed HHS bureaucrats must pay an income surtax according to the higher of the following

 

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

 
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337

Employer: 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). Bill: PPACA; Page: 345-346

(Combined score of individual and employer mandate tax penalty: $65 billion)

$60.1 Billion: Tax on Health Insurers (Takes effect 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. Bill: PPACA; Page: 1,986-1,993

$32 Billion: Excise Tax on Comprehensive Health Insurance Plans (Takes effect 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. Bill: PPACA; Page: 1,941-1,956

$23.6 Billion: “Black liquor” tax hike (Took effect in 2010) This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

$22.2 Billion: Tax on Innovator Drug Companies (Took effect in 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

$20 Billion: Tax on Medical Device Manufacturers (Takes effect 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 <$100. Bill: PPACA; Page: 1,980-1,986

$15.2 Billion: High Medical Bills Tax (Takes effect Jan 1. 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. Bill: PPACA; Page: 1,994-1,995

$13.2 Billion: Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Takes effect 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. Bill: PPACA; Page: 2,388-2,389

$5 Billion: Medicine Cabinet Tax (Took effect 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). Bill: PPACA; Page: 1,957-1,959

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

$4.5 Billion: Codification of the “economic substance doctrine” (Took effect in 2010): 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. Bill: Reconciliation Act; Page: 108-113

$2.7 Billion: Tax on Indoor Tanning Services (Took effect July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

$1.4 Billion: HSA Withdrawal Tax Hike (Took effect 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. Bill: PPACA; Page: 1,959

$0.6 Billion: $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Takes effect Jan. 2013): Bill: PPACA; Page: 1,995-2,000                                                                                                                 

$0.4 Billion: Blue Cross/Blue Shield Tax Hike (Took effect in 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. Bill: PPACA; Page: 2,004

$ Negligible: Excise Tax on Charitable Hospitals (Took effect in 2010): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971

$ Negligible: Employer Reporting of Insurance on W-2 (Took effect in Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

[PDF of Press Release]

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AZ BOB

YOU HEARD, would you be interested in buying the Golden Gate Bridge, I can make you a sweet deal, no money down???


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