BREAKING: Full List of Tax Hikes<br> In Senate Democrat Health Bill
Read the full bill
Read the tax revenue score from the Joint Committee on Taxation (JCT)
Read the budget and tax score from the Congressional Budget Office (CBO)
Individual Mandate Tax (Page 324/Sec. 1501/$8 bil/Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the following schedule (capped at 8 percent of income):
|Single||Single +1||Single +2|
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).
Employer Mandate Tax (Page 348/Sec. 1513/$28 bil/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 $750 for all full-time employees. Applies to all employers with 50 or more employees.
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).
Excise Tax on Comprehensive Health Insurance Plans (Page 1979/Sec. 9001/$149.1 bil/Jan 2011): Starting in 2013, new 40 percent excise tax on “Cadillac” health insurance plans ($8500 single/$23,000 family). Higher threshold ($9850 single/$26,000 family) for early retirees and high-risk professions. CPI +1 percentage point indexed.
From 2013-2015, the 17 highest-cost states are 120% of this level.
Employer Reporting of Insurance on W-2 (Page 1996/Sec. 9002/Min$/Jan 2011): Preamble to taxing health benefits on individual tax returns.
Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil/Jan 2011): No longer allowable 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)
HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil/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.
FSA Cap (Page 1999/Sec. 9005/$14.6 bil/Jan 2011): Imposes cap on FSAs of $2500 (now unlimited).
Corporate 1099-MISC Information Reporting (Page 1999/Sec. 9006/$17.1 bil/Jan 2012): Requires businesses to send 1099-MISC information tax forms to corporations (currently limited to individuals), a huge compliance burden for small employers
Excise Tax on Charitable Hospitals (page 2001/Sec. 9007/Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS.
Tax on Innovator Drug Companies (Page 2010/Sec. 9008/ $22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year.
Tax of Medical Device Manufacturers (Page 2020/Sec. 9009/$19.3 bil/Jan 2010): $2 billion annual tax on the industry imposed relative to shares of sales made that year. Exempts items retailing for <$100.
Tax on Health Insurers (Page 2026/Sec. 9010/$60.4 bil/Jan 2010): $6.7 billion annual tax on the industry imposed relative to health insurance premiums collected that year.
Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Page 2034/Sec. 9012/$5.4 bil/Jan 2011)
Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Page 2034/Sec. 9013/$15.2 bil/Jan 2013): Waived for 65+ taxpayers in 2013-2016 only
$500,000 Annual Executive Compensation Limit for Health Insurance Executives (Page 2035/Sec. 9014/$0.6 bil/Jan 2013)
Hike in Medicare Payroll Tax (Page 2040/Sec. 9015/$53.8 bil/Jan 2013): Current law and changes:
|Wages (Employer/Employee)||Self-Employment Net Income|
|Current Law and New Rate on First $200,000 ($250,000 MFJ)||1.45%/1.45%||2.9%|
|New Rate on Amount Which Exceeds $200,000 ($250,000 MFJ)||1.45%/1.95%||3.4%|
The 0.5% new rate addition is not deductible for the self-employment tax adjustment.
Blue Cross/Blue Shield Tax Hike (Page 2044/Sec. 9016/$0.4 bil/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
Tax on Cosmetic Medical Procedures (Page 2045/Sec. 9017/$5.8 bil/Jan 2010): New 5% excise tax on elective cosmetic surgery to be paid by the surgery patient.
Yet Another Obama Appointee<br> Is a Tax Hypocrite
It looks like yet another Obama Treasury Department nominee has tax problems: Lael Brainerd, who is nominated to be Assistant Treasury Secretary for International Affairs.
The tax flubs include:
- late payments on DC unemployment tax
- hiring a possibly illegal alien
- late property tax payments
- improperly claiming a home office deduction
Once again, we see an Obama nominee (at Treasury, no less) not paying her taxes. This is the same crowd who wants to raise our taxes by hundreds of billions per year.
Tax Pledge Alert:<br> Vote for Cloture on Motion to Proceed<br> Is Violation of Tax Pledge
Tomorrow at Noon, Senate Majority Leader Harry Reid (D-Nev.) is scheduled to release details of his health reform bill. This bill is widely expected to include tax provisions which shall result in a net income tax hike.
Failing to fight back against this tax-hike bill would be a violation of the Taxpayer Protection Pledge, which binds 33 United State Senators to “oppose any and all efforts” to raise net income taxes.
ATR considers the vote on cloture on the motion to proceed to Senator Reid’s government healthcare bill to be in direct violation of this Pledge. Any Pledge-signing senator who votes for this cloture motion will be considered a Taxpayer Protection Pledge violator.
A VOTE TO INVOKE CLOTURE ON THE MOTION TO PROCEED TO THE REID GOVERNMENT HEALTH BILL VIOLATES THE TAXPAYER PROTECTION PLEDGE
ATR Will Rate a Vote Against<br> Moving to Proceed to Reid Health Bill
This week, the United States Senate will be voting on a motion to proceed to consideration of Senate Majority Leader Harry Reid’s (D-Nev.) healthcare bill. This bill would increase taxes by hundreds of billions of dollars over the next decade, saddle future generations with another unfunded entitlement, and destroy private sector health insurance.
A vote to proceed with this deeply-flawed legislation is tantamount to a vote in support of the bill. A VOTE IN FAVOR OF THE MOTION TO PROCEED IS A VOTE IN FAVOR OF THE BILL.
For that reason, Americans for Tax Reform WILL RATE a vote against moving to proceed in our annual “Hero of the Taxpayer” Congressional scorecard.
ATR Supports H.R. 3905, <br>"The Estate Tax Relief Act of 2009"
Americans for Tax Reform sent the following letter today to Congressman Kevin Brady (R-TX):
On behalf of Americans for Tax Reform, I am pleased to support H.R. 3905, “The Estate Tax Relief Act of 2009.” While it falls short of our goal of full death tax repeal, it remains a tax cut relative to current law.
As you know, the death tax is scheduled to be reduced to a rate of “0” in 2010, only to shoot up to 55 percent in 2011. Full repeal of the death tax remains the goal. However, should full repeal not be possible, the next priority for taxpayers must be to avoid a tax increase relative to current law.
H.R. 3905 is a death tax cut relative to current law. The bill calls for a ten-year, phased in reduction of the death tax rate—from 45 percent in 2009 to 35 percent in 2019. Furthermore, the death tax exclusion rises from $3.5 million in 2009 to $5 million in 2019 (indexed to inflation after that). This would be a permanent cut in the death tax, and moves closer to full repeal than current law would.
H.R. 3905 would score as a net tax cut relative to current law, which assumes a 55 percent death tax rate and a $1 million exemption level—permanently. Repeal of the death tax would be preferable to H.R. 3905, but this bill is superior to current law after 2010.
I look forward to continuing to work with you and our other allies on Capitol Hill to fully repeal the death tax.
Outline of House GOP Alternative<br> To Pelosi-Rangel-Obama Health Bill
219 pages (compared to 1990 pages for House Democrat bill, H.R. 3926)
Uses the word “shall” 362 times (as opposed to 3,424 times in the House Democrat bill)
- HSA improvements, including:
- Saver’s credit can be used for HSA contributions
- HSA funds can be used to pay for insurance
- Greater coordination between HSA administrators and insurance companies
- HSA funds can be used for medical expenses incurred after insurance is bought but before HSA is opened
- Let individuals purchase health insurance across state lines (a.k.a. “Shadegg bill”)
- Association health plans (AHPs) to allow businesses and other groups to pool together across state lines to purchase coverage
- Medical malpractice tort reform
- Improve state high risk pools to give hard-to-insure people a place to buy affordable insurance
- Give cash rewards to states who find ways to lower health insurance premium cost growth
- Allow auto-enrollment for health plans at work
- Allows companies to incentivize wellness programs
- Ends federally-controlled comparative effectiveness research
- Beefs up fraud enforcement in Medicare and Medicaid
- Abortion funding restriction and conscience clause protection
- Gives increased patent benefits to follow-on biologics
JCT Says That Pelosi-Care Could<br> Send the Uninsured to Prison
This interesting nugget from the House Ways and Means Committee GOP staff:
Today, Ranking Member of the House Ways and Means Committee Dave Camp (R-MI) released a letter from the non-partisan Joint Committee on Taxation (JCT) confirming that the failure to comply with the individual mandate to buy health insurance contained in the Pelosi health care bill (H.R. 3962, as amended) could land people in jail. The JCT letter makes clear that Americans who do not maintain “acceptable health insurance coverage” and who choose not to pay the bill’s new individual mandate tax (generally 2.5% of income), are subject to numerous civil and criminal penalties, including criminal fines of up to $250,000 and imprisonment of up to five years.
When confronted with this same issue during its consideration of a similar individual mandate tax, the Senate Finance Committee worked on a bipartisan basis to include language in its bill that shielded Americans from civil and criminal penalties. The Pelosi bill, however, contains no similar language protecting American citizens from civil and criminal tax penalties that could include a $250,000 fine and five years in jail.
According to the Congressional Budget Office the lowest cost family non-group plan under the Speaker’s bill would cost $15,000 in 2016.
So if you're a working family struggling to make ends meet, you either have to come up with $15,000 or potentially face jail time.
Obama Endorses Healthcare Bill<br> That Breaks His Own Tax Pledge
During his campaign, President Obama made a “firm pledge” not to raise “any form” of taxes on families making less than $250,000 per year. Yet, he has just endorsed H.R. 3962, which does just that. Here’s how:
Payroll Tax Rate
Average Payroll Size
ATR Supports House GOP Alternative<br> To Pelosi-Rangel-Obama Health Bill
ATR sent a letter today to House Republican Leader John Boehner (R-Ohio) endorsing the House GOP alternative to Pelosi-care. Click here to read the full text of that letter. Click here for a CBO score of the proposal. Click here for talking points and other background on the alternative.
Here is an excerpt of our letter:
Congratulations on your introduction of an amendment in the nature of a substitute to H.R. 3962, the House Democrat government healthcare plan. Your plan doesn’t increase taxes, won’t saddle future generations with trillions in debt, and leaves the government out of the doctor-patient relationship.
In particular, I wanted to commend you for two aspects of the bill: letting families purchase health insurance across state lines, and the improvements made to health savings accounts (HSAs).
UPDATE: List of Tax Hikes in House Dem<br> Health Bill Updated for<br> Managers' Amendment
Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)