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INDEX

BREAKING: Comprehensive List of Net Tax Hikes in Health Reconciliation Bill

From Ryan Ellis on Tuesday, March 23, 2010 2:59 PM
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The U.S. Senate today will begin consideration of H.R. 4872, the “Reconciliation Act of 2010.”  It makes several changes to the healthcare law signed by President Obama today.  Below are the tax changes made by the reconciliation bill to current law:

1. 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 (Tax hike of $123 billion):  

  Capital Gains Dividends Other*
2010 15% 15% 35%
2011-2012 (current law) 20% 39.6% 39.6%
2011-2012 (Obama budget) 20% 20% 39.6%
2013+ (current law) 23.8% 43.4% 43.4%
2013+ (Obama budget) 23.8% 23.8% 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.

2. Increase the employer mandate tax from $750 per employee to $2000 per employee (disregarding the first 30 employees).  This tax would apply to any employer who does not offer insurance and who has at least one employee eligible for a tax credit to purchase insurance inside the exchange.  If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. (Tax increase of $26 billion when combined with individual mandate)

3. Increase the individual mandate tax from the greater of 2% of adjusted gross income (AGI) or a dollar amount to the greater of the following (See employer mandate score):

  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


4. Decrease Cadillac plan excise tax by delaying the implementation date from 2013 to 2018.  It also increases the threshold for this 40% excise tax from $8500 single/$23,000 family to $10,200 single/$27,500 family.  (Tax reduction of $117 billion)

5. Delays “Special Needs Kids Tax” (FSA Cap) until 2013.  Delays the $2500 FSA cap (2011 under current law) until 2013.  This provision delays the $2500 cap called for in the healthcare bill signed by the President.  It will fall most-heavily on parents who use their FSAs to pay for expensive special-needs tuition pre-tax. (Tax reduction of $1 billion)

6. Raises “PhRMA Tax” from $22.2 billion to $27 billion from 2010-2019 (Tax hike of $4.8 billion).  This is a simple money-grab from the pharmaceutical industry.

7. Changes medical device manufacturing excise tax from flat dollar amount to 2.9 percent excise tax (Tax hike of $800 million).  This switches the money-grab in this industry from a dollar amount to a more conventional excise tax.

8. Raises health insurance tax from $59.6 billion to $60.1 billion from 2010-2019 (Tax hike of $500 million). This is a simple money-grab from the health insurance industry.

9. Delays tax hike on employer-provided retiree Rx drug coverage from 2011 to 2013 (Tax cut of $900 million).  Under the bill the President signed, employers who provide retiree prescription drug coverage in coordination with Medicare would no longer be able to deduct their costs as a business expense.  This moves forward that tax hike.

10. “Black liquor” tax hike (Tax hike of $23.6 billion).  This is a tax increase on a type of bio-fuel.

11. Codification 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.

12. Exchange premium credits made more generous  (Tax cut of $1 billion).  This is more statistical scoring noise than anything else.

13. Associated effects on tax revenues (Tax cut of $11 billion). 

TOTAL Net Tax Hike Effect:     $52.3 billion/10 years

CBO Score

JCT Score

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Comments

So this would ultimately tax the same after tax income two and in some cases three times. No wonder they had a Tea Party. Seems like we are right back where we started. Oppressive Government practicing the Marxist principle.
>> kathleen F Wednesday, March 24, 2010 2:43 PM Report Comment

Wondering if the 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single) is indexed to inflation. If not we all will be paying in 10 years
>> Craig C Wednesday, March 24, 2010 5:13 PM Report Comment

I don't see how any of these taxes adversely affect regular, working class people. I don't mind that the pharmaceutical and insurance companies get taxed since there profit margins are too high. And, taxes are actually lower now that they were during the Reagan and first Bush administration. This web site does not seem to be for normal, working class people I think people just want to be angry about anything Obama tries to do to help regular folk.
>> Jenny Friday, April 2, 2010 11:45 AM Report Comment

Taxes are lower now than during Reagan and Bush. First of all, Reagan brought the highest tax rate down to 28 % and Bush raised it to 31 %. Right now, the highest tax rate is 35 %. Jenny your argument is tenous and you surely are misinformed!! Ignorance is bliss!!
>> Frank C Thursday, April 8, 2010 9:18 PM Report Comment

Jenny if you think making 3 percent is making too much money you are believing the Obama baloney. The additional tax on the insurance companies will be passed along and ultimately the consumer will pay more. Since you are probably amongst the 47 percent who pays no federal income tax (the normal, working class people) I would remind you that your boss or the owner/owners of your business will pay more tax and will look to cut costs immediately. The way an employer cuts costs is to eliminate employees... you! And it was Reagan who revamped and lowered the ridiculously cumbersome tax structure that Carter put in place. If you are looking for a NANNY move to Cuba or Venezuela.
>> kATHLEEN Friday, April 9, 2010 8:24 AM Report Comment

Obama is not helping regular working folk. He is taking from some and giving to others. He is encouraging class warfare and making a villain out of the very tenets (capitalism) that makes this country great. He is punishing the responsible and rewarding the irresponsible. His goal is to get the majority of Americans on entitlements and let the minority pay for it thus securing a majority voting block. It is about socialism and power. This regime will cause a reverse in the American dream because if the government takes away my incentive to work by taking more of my income I will either move to the Bahamas or stop working. And then he will have to tax YOU more, Jenny.
>> KATHLEEN Friday, April 9, 2010 8:36 AM Report Comment

Frank-I think it depends on what specific taxes at which you are looking. Kathleen-I paid a lot of federal income tax last year. I made over 90000 and my husband is an attorney. I do not have major tax write-offs. I can not tell who you are angry at-poor people or people who do not pay taxes because they have tax shelters. The insurance companies have a choice---they already make such huge profits-they do not HAVE to lay people off.But of course they will, they would rather make more money--millions a year, than take care of people. Of course, instead of blaming the greedy insurance companies, you will blame the black man.
>> Jenny Friday, April 9, 2010 11:19 AM Report Comment

Kathleen-'looking for a nanny?' I do not want anyone to 'take care' of me. I just think that if you have enough money to have large dividends, then you have enough money to be taxed on it. I think we all forget that the services we all like and need come from taxes. -Capitalism is good, to a point, but unchecked capitalism led to our housing meltdown. I think freedom is what our country great, not Walmart and McNuggets. -Our country is so far from socialism-it is really at the opposite extreme right now. But if you would like to go even farther right, would you get rid of social security and medicare, too?
>> Jenny Friday, April 9, 2010 11:35 AM Report Comment

Kathleen Also-when insurance companies lay off, their stocks go up and that is all that matters to them. In response to your fear that Obama wants everyone on welfare: wouldn't that make him the worst president ever? How does that even make sense? Would he really want that to be his legacy? Is that why he worked to hard and went to Harvard. To put the majority of Americans on goverment assistance, hmmmm. That is a lot of people. Is he also the anti-christ? I seriously hope you do not believe that paranoid hype.
>> Jenny Friday, April 9, 2010 11:51 AM Report Comment

Jenny, you don't have a clue. It was the Community Reinvestment Act of 1977 under Carter that got this ball rolling. It was done to try and keep cities from crumbling and get residents to own something with the thought that if they owned it they would take better care of it. Folks who shouldn't have gotten mortgages got them any way. And because they had no skin in the game it didn't matter. ACORN and others harassed the banks to lend to those who were not worthy and Freddie and Fannie as well as the FHA guaranteed these risky subprime loans. So when it got tough these same folks just defaulted. Most were arms and when the rate went up these same folks had nothing to lose so they walked away. Get your facts straight.
>> KATHLEEN Friday, April 9, 2010 12:45 PM Report Comment

Obama is the worst president ever. He has not even run a candy store and now he is running the country. He was raised in Indonesia and is not a Capitalist. He is a socialist. He is a radical who hangs with the radicals of the 60s. He attended a Church for twenty years that was headed by a known racist. These are facts. He doesn't care about his legacy. He thinks so much of himself he thinks he can talk his way out of anything. He is a spineless bully dictator. He didn't pay for his Harvard education. A Palestinian radical paid for it. Medicare, Medicaid, food stamps housing rebates and subsidies,cash for clunkers and on and on -- they are all handouts. Get your head out of the sand.
>> KATHLEEN Friday, April 9, 2010 12:53 PM Report Comment

Insurance companies are interested in PROFIT. If they are forced to take on risk without reward and the premiums are not enough to cover their liabilities (their costs) they will go out of business. And that is Obama's plan.. on the march to single payer- the government runs all of the healthcare industry. And the banking industry. And AIG. And the student loan program (snuck into the reconciliation bill- did you READ IT? I did) and two car companies. And if Maxine Waters(D- CA) has her way the oil industry. I only believe the facts. He is Marxist. He wants to punish the responsible and reward the irresponsible. Forced charity is a marxist tenet. Look it up.
>> KATHLEEN Friday, April 9, 2010 12:59 PM Report Comment

Who gave these people mortgages? The mortgage brokers who made money and then bundled the mortgages and sold them. ARM should have never been allowed to exist. They don't exist in Canada and their dollar is worth more that ours now. Obama has only been in office for 15 months-he is cleaning up Bush's mess now. The lack of regulation over our free market and corporate greed, not to mention the irresponsibility of individuals caused the collapse. Where are you getting these 'facts' about Obama? Fox 'News'. Obama was in Indonesia from age 6-10 only. Four years.He lived in Hawaii until he graduated from high school. Take your meds, crazy.
>> Jenny Friday, April 9, 2010 1:00 PM Report Comment

Jenny I paid more in taxes than you earned last year. I am not angry at poor people. I am tired of my income being wasted on the lazy and the clueless. Democrats don't care about the poor... if they did they would give every poor child school vouchers. But they fight school vouchers because they are in bed with the teachers unions which help get them elected. It is about the power. I want to see every poor child have the same opportunity for a good education. Once these kids are educated they will realize that the Dems have held them down on purpose. The Dems have taken away the incentive to work hard with the buying of votes through entitlements.
>> KathleEN Friday, April 9, 2010 1:07 PM Report Comment

I read the bill, too. Don't be so proud of yourself, it wasn't all that long.Wow-you can read while hearing the voices. The reason student loans have been taken over by the government is because it is more efficient and better for the student in less fees. You know what, maybe you should take your skill whatever it is and move to the Bahamas.
>> Jenny Friday, April 9, 2010 1:07 PM Report Comment

Obama is not cleaning up anything. It is jobs he should be focused on and all he had to do was have a tax holiday for the working man but refused to do it. The Barney Franks pressured the banks. You need to do some serious research. And it was the Lawyer lobby that helped get Obama into office so I am not going to waste any more time speaking to someone who is in bed with a LAWYER. LOL. Bush tried to regulate this mess but Barney and Chris Dodd blocked it. I am done. You need to do your research because you sound like a puppet of the left spewing their talking points. Don't be a sheep. Do the research. I don't watch Fox. And just google it. God bless you.
>> kathleen Friday, April 9, 2010 1:13 PM Report Comment

Why are you so angry when you have so much? What is missing in your life? How could you not care about the poor? You are obviously very wealthy and educated. Why are you so angry? How much money would make you happy? You think people are poor and hungry because they are 'lazy and clueless'? Have you ever met a poor person? Or even a working class person? Or are they just numbers that work for you? They work very, very hard and get screwed anyway. Not everyone is smart enough to go to college. That doesn't mean they should make minimum wage with no benefits. It is just not right.
>> Stop being greedy Friday, April 9, 2010 1:15 PM Report Comment

Hey guys...so what? You want public services? You want the military to protect you? You like the fact that the FDA makes sure that the meat you eat and the Viagra and Cardizem you take won't kill you? You have to pay taxes to support these things. Obama inherited a war on two physical fronts and an unknown and unquantifiable third front. He inherited the worst financial crisis in the last 60 years. He inherited a government which has consistently taken liberties with your civil liberties. Remember Bush's "USAPATRIOT ACT?" That allows them to wire tap your house and look at your library records almost without judicial review.
>> Andrew Friday, April 9, 2010 1:19 PM Report Comment

Kathleen, Obama is TRYING to clean up Bush's mess. Your second sentence runs on, I can't make any sense of it. What do you mean, 'it is jobs he should be focused on and all he had to do was have a tax holiday for the working man'. Is that 2 thoughts or one? Is a tax holiday going to create jobs because people will buy crap from Walmart? Bush gave us a tax rebate and look how that fixed the economy. Or did it?
>> Jenny Friday, April 9, 2010 1:26 PM Report Comment

You are right! We should dismiss the military, close the FDA, Federalend Medicare, Medicaid, food stamps, WIC, funding for public schools and universities. Let the poor and less financially able wallow in their own poverty! What? Your parents are blue collar workers who lost their jobs at a subsidiary parts manufacturer when GM went belly up? They don't deserve unemployment, funding for job retraining and you CERTAINLY don't deserve Pell Grants or Federally subsidized loans so you can go to college.
>> Andrew Friday, April 9, 2010 1:32 PM Report Comment

Oh... focus on jobs right? But that means you like the relief act of 2009 where the federal government gave grants to states to fund public works projects? Oh no, he should have just eliminated taxes "for the working man" and then they'd pay less taxes on jobs they...don't...have anymore.
>> Andrew Friday, April 9, 2010 1:36 PM Report Comment

Face the facts, we are a far better society and a far better nation when we behave as if we have a responsibility to each other-rather than just to our stock portfolio. If you truly paid more money that the above poster made last year-that's wonderful. I'm sure you did that all on your own without any help from the social network we are all a part of. Now perhaps you would see fit to throw the peasants a bit of largess and pay a slightly higher tax rate on your dividends.
>> andrew Friday, April 9, 2010 1:39 PM Report Comment

Oh and those Student Loan reforms? They take the 2-6% "origination fee" away from the private banks which issue loans and returns that money to the students who need it to pay for their education and related expenses. Sorry about that if you held stock in Chase, Wachovia or CITIGroup...they'll survive and your portfolio won't drop too far I'm sure.
>> Andrew Friday, April 9, 2010 1:44 PM Report Comment

So I guess most of you think it is okay for someone else to pay for your healthcare. Why? Should someone else help you pay your mortgage? Should they pay for your food? And your clothing? How about your beer? Your cell phone? Your new flatscreen TV? Somehow I think that the crowd here is very generous with other people's money. I bet I can guess who gave what. And why can't those of us who don't want it just opt out? Then the rest of you charitable souls can pick up the slack. Heh, heh.http://www.youtube.com/watch?v=19v5Kjmc8FI
>> Roger Friday, April 9, 2010 4:20 PM Report Comment

The comments you make are so greedy and rabid. Who is getting flat screen TVs and free beer in your world? I pay my taxes: property,local wage, income and sales. I don't complain when the fire truck, police or ambulance arrive at my neighbor's house and it's MY tax dollars that paid for that service. I'm glad I've paid my taxes all these years so it's there when it's needed. I'd also like to know that if my neighbor gets sick-they have health insurance so they can see a doctor. That's what being a RESPONSIBLE citizen is about.
>> andrew Friday, April 9, 2010 4:33 PM Report Comment

The u-tube sound byte promotes racial stereotyping and does no one any good at all. You should be ashamed of yourself for promoting such propaganda.
>> Jenny Friday, April 9, 2010 4:37 PM Report Comment

What are all you lefties doing on a tax reform site? Daily Kos too busy for you? Huff is too boring? Go see what that leftie Mahr guy is up to. Or just go to the DSA site. Why don't you all just move in together, pool your money, share your cars? Heh, heh.
>> Roger Friday, April 9, 2010 4:43 PM Report Comment

Oh and Roger-go ahead and opt out. Then, please don't send your kids to public school, don't go to the local publicly funded hospital when you have a heart attack, don't file for Medicare, don't call the police, fire company or ambulance when you have a problem. Also, don't drive on any state or federally funded roads. (That should leave you making one big circle in the Walmart parking lot!) Don't flush your toilet-if you have sewer service. Don't drink a glass of water, eat meat which is federally inspected, take any medications which undergo FDA testing, don't turn on the cable TV, don't listen to the radio, don't get on a plane and don't get on a train. All of these are federally (tax)funded or federally controlled.
>> andrew Friday, April 9, 2010 4:45 PM Report Comment

Roger-the nation that I believe in and will continue to serve as a soldier was founded on open discourse. I like to hear the opinions of those who don't agree with me-when they make sense, I'm swayed by them. I don't have a problem calling out those which are ignorant, insane or racist. I'd move in with all the leftists, but I'm not leftist-I'm centrist. I believe there is a middle ground between all out tax and spend policies and knee jerk race based greed. You can call 50% of the population of the US all the names you want-but they are still there and they (believe it or not) respect your opinion. Of course you are probably right, we're not real Americans, we're commie socialist fascists. Impossible as that might be.
>> andrew Friday, April 9, 2010 4:54 PM Report Comment

Oh and Roger, it's not really a "tax reform site." This site is sponsored by: Lynde and Harry Bradley Foundation, Carthage Foundation, John M. Olin Foundation, Sarah Scaife Foundation, R.J. Reynolds, Philip Morris, The Tobacco Institute and Jack Abramoff's clients, the Chiefs of the Kickapoo Traditional Tribe of Texas and the Coushattas tribe of Louisiana (both gave $25,000 in 2001 and AATF received a cut of funds for laudering the money). Sure sounds like a grassroot movement with no hidden agenda to me. Good thing you are smart enough to see through all that huh? Support your corporate masters boy...
>> Andrew Friday, April 9, 2010 5:05 PM Report Comment

Roger-that sound byte you sent a link to is actually from a satirical video that was made around the time Obama was elected. IT WAS A JOKE, but someone took it out of context to make it seem real. I know this because a friend sent me the video in 2008.
>> Jenny Saturday, April 10, 2010 11:07 AM Report Comment

Ryan, Do some research on the "Black Liquor Tax Credit" and then let me know if you still feel it's a "tax hike". I don't think closing a loophole that allowed paper companies to bilk $5 billion++ of taxpayer money in 2009 is a "tax hike". You embarrass yourself for including this on your list.
>> Paul Monday, April 19, 2010 12:43 PM Report Comment

Paul, maybe this helps people understand the issue better: http://www.nytimes.com/gwire/2009/11/04/04greenwire-black-liquor-tax-credit-restriction-rides-on-h-15986.html Ryan is obviously well educated in the fine art of inflaming people by providing only partial information. Look into the background of this website and you'll discover that he is in good company. Seems like one way people push their own secret or open agenda is by only giving partial facts...If you are looking for a tutor, Goebbels was the master of this.
>> Andrew Monday, April 19, 2010 1:25 PM Report Comment

For people who want to understand this issue, check out http://www.prlog.org/10604836-black-liquor-tax-credits-the-end-of-loophole-for-the-pulp-paper-industry.html Also, the idea that the Obama administration would "save" $20+ billion to help pay for the health plan in the future is a flippin' crock! The "black liquor tax credit" ran out at the end of 2009, and the so called "closing of the loop" in the future is moot, considering the EPA has all but said that "black liquor" will not qualify moving forward until the Cellulosic Biofuel Producer Credits run out in 2012. Both sides, and their peons, provide partial information. How else can our voters continue down the path to extreme polarization???? Word
>> Paul Monday, April 19, 2010 5:18 PM Report Comment

Yea you are right. What ever it was you were trying to say. I learned on this website and others like it that it is impossible for the Obama administration to do anything which might benefit anyone who isn't black, Muslim, poor and a terrorist. You might also want to use smaller words and full sentences if you want the other posters on this thread to be able to understand what you are trying to say. But I digress...
>> Andrew Monday, April 19, 2010 5:33 PM Report Comment

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