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What Tax Hikes Will the Obamacare Tax Exemption Card Help You Avoid?


Posted on Monday, August 13th, 2012, 6:10 PM PERMALINK


Bearers of the Obamacare Tax Exemption Card are exempt from the following taxes:

  • Individual Mandate Tax: Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax.
  • Health Plan Tax: Starting in 2018, there will be a new 40 percent excise tax on “Cadillac” health insurance plans (Premiums of $10,200 single/$27,500 family).
  • Flex Account Tax: Imposes cap on Flexible Spending Accounts of $2,500 (now unlimited). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.
  • Health Savings Account Tax: 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.
  • Tanning Tax: New 10 percent excise tax on Americans using indoor tanning salons.
  • Wheelchair Tax: New 2.3 percent excise tax on medical device manufacturers for items selling for more than $100.
  • Medicine Cabinet Tax: Americans are 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).
  • High Medical Bills Tax: 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.
  • Religious Institution Tax: Requires employers to purchase “qualifying” health insurance for employees, even if doing so violates the employer’s deeply held moral convictions.

To learn more about the 20 new or higher taxes in Obamacare, click here.

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