John Kartch

140 Million Families Will Be Forced to Submit Obamacare Individual Mandate Compliance Forms to IRS


Posted by Ryan Ellis, John Kartch on Thursday, September 20th, 2012, 11:10 AM PERMALINK

The Congressional Budget Office on Wednesday announced that six million American families will be forced to pay the Obamacare individual mandate non-compliance penalty tax.

The six million families who will be forced to pay the tax understates the true compliance burden of the looming Obamacare individual mandate scheduled to take effect in 2014:

  • Every American required to file an income tax return must report to the IRS whether or not they have “qualifying” health insurance under Obamacare.

  • Thus, this tax will not just impact the six million American families having to pay the tax, but the 140 million U.S. households which file an annual income tax return.  Each of the 140 million households will be forced to complete and submit compliance forms to the IRS.

The compliance burden described above does not even take into account the other 19 new or higher taxes in the Obamacare law, which the IRS has determined for the Ways and Means Committee will increase tax preparation time by a collective 80 million hours per year.

The non-compliance penalty tax will hit middle-income Americans, a violation President Obama’s “firm pledge” not to raise “any form” of tax on families making less than $250,000 per year. There are at least seven Obamacare taxes that directly hit families making less than $250,000.

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Obama's Middle-Class Tax Pledge Shattered Two Years Ago Today


Posted by Ryan Ellis, John Kartch on Friday, March 23rd, 2012, 8:27 AM PERMALINK

President Barack Obama’s central campaign promise – a “firm pledge” against “any form of tax increase” on families making less than $250,000 per year – was broken two years ago today when he signed the Affordable Care Act into law. The healthcare law contains at least seven tax hikes that unquestionably violate Obama’s pledge.

Documentation of Obama’s promise is as follows:

Speaking in Dover, New Hampshire on Sept. 12, 2008, 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.”  [Video]

During a nationally televised Vice-Presidential debate in St. Louis on Oct. 3, 2008, candidate Joe Biden said:

 “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]

In an address to a joint session of Congress on Feb. 24, 2009, President Obama restated the promise in forceful terms:

“If your family earns less than $250,000 a year, you will not see your taxes increased a single dime.  I repeat: not one single dime.” [Transcript] [Video]

During a White House press briefing on April 15, 2009, spokesman Robert Gibbs was asked if Obama’s tax pledge applied “to the health care bill.”  Gibbs replied:

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

Yet Obama’s commitment to the American people was thrown out the window when he signed the healthcare bill into law. The seven Obamacare tax increases that break his “firm pledge” are:

1. The Obamacare Individual Mandate Excise 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.

None of the above tax increases contain any exemption whatsoever for families making less than $250,000 per year.

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Comprehensive List of Obama Tax Hikes


Posted by Ryan Ellis, John Kartch on Sunday, November 20th, 2011, 6:42 PM PERMALINK

Sign up for our email list to stay up-to-date on the looming tax fights in Congress!

Since taking office, President Barack Obama has signed into law twenty-one new or higher taxes:

1. A 156 percent increase in the federal excise tax on tobacco:  On February 4, 2009, just sixteen days into his Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents per pack.  The median income of smokers is just over $36,000 per year.

2. Obamacare Individual Mandate Excise Tax (takes effect in Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance 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

3. Obamacare Employer Mandate Tax (takes effect 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 $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/10 years

4. Obamacare Surtax on Investment Income (Tax hike of $123 billion/takes effect Jan. 2013):  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: Bill: Reconciliation Act; Page: 87-93

 

Capital Gains

Dividends

Other*

2011-2012

15%

15%

35%

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.

5. Obamacare Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/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

6. Obamacare Hike in Medicare Payroll Tax (Tax hike of $86.8 bil/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

7. Obamacare Medicine Cabinet Tax (Tax hike of $5 bil/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

8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 bil/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

9. Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Tax hike of $13 bil/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 educationBill: PPACA; Page: 2,388-2,389

10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 bil/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

11. Obamacare "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 bil/takes effect Jan. 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

12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion/took effect July 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994

14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 bil/took effect Jan. 1 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

15. Obamacare Excise Tax on Charitable Hospitals (Min$/took effect immediately): $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

16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2011): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

17. Obamacare Tax on Health Insurers (Tax hike of $60.1 bil/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

18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6 bil/takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000

19. Obamacare Employer Reporting of Insurance on W-2 ($min/takes effect Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion/took effect immediately).  This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion/took effect immediately).  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

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Conservative Coalition Letter to GOP Leadership: Keep Tax Hikes off the Table


Posted by James Paul, John Kartch on Monday, July 18th, 2011, 12:55 AM PERMALINK

Today, a broad coalition of center-right organizations released a joint letter calling on Republican leaders in Congress to block any attempt to raise taxes in the ongoing debt ceiling negotiations. The letter reminds lawmakers of the budget deals of 1982 and 1990 that raised taxes but failed to deliver on promises to cut spending. In part, the letter states:

“Our organizations represent millions of tea party and limited government activists and scholars from around America. We are all united in one opinion about the on-going debt limit negotiations—tax increases need to be ‘off the table,’ since Washington, D.C. has an over-spending problem, not an under-taxing problem.

Washington, D.C. already spends too much of our money.  The historical level of federal government spending has been 21 percent of economic output.  According to the non-partisan Congressional Budget Office (CBO), federal spending will be 23-24 percent of economic output each year for the rest of this decade, and then balloon to over 30 percent in the next few decades.  Higher taxes to fuel President Obama’s super-sized welfare state will only make this problem worse.

America has a fiscal crisis because Washington spends too much, not because it taxes too little.  According to CBO, tax revenues will reach or exceed the historical average of 18 percent of economic output by the end of this decade, even as spending continues to careen out of control.  Raising taxes would kill jobs, wreck any hope of an economic recovery, and simply serve to enable an out of control spending elite in Washington, D.C.

Grand compromises to cut spending and hike taxes have failed in the past.  In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes.  The tax increases happened, but President Reagan was still waiting for the promised spending cuts when he left office.  In 1990, President George H.W. Bush was promised $2 in spending cuts for every $1 in tax hikes.  He broke his “Read My Lips” tax pledge at Andrews Air Force Base, but CBO numbers prove that not a single penny of the promised spending reductions was realized.  Putting tax increases on the table now will only result in real tax hikes on American employers and families, and phony spending cut promises that never get realized.  The focus must be on spending, and spending alone.”

Signatories to the letter include (organizational affiliations listed for information purposes only):

Jim Martin of 60 Plus Association

Dick Patten of American Family Business Institute

Tim Phillips of Americans for Prosperity

Grover Norquist of Americans for Tax Reform

Duane Parde of National Taxpayers Union

Susan Carleson of The Carleson Center for Public Policy

Brian Burch of CatholicVote.org

Mario Lopez of Hispanic Leadership Fund

Timothy Lee of Center for Individual Freedom

Andrew Quinlan of Center for Freedom and Prosperity

Chuck Muth of Citizen Outreach

Chip Faulkner of Citizens for Limited Taxation

Richard Viguerie of Conservative HQ

Gary Marx of Faith and Freedom Coalition

Rick Watson of Florida Center-Right Coalition

Jimmy LaSalvia of GOProud

Nicole Neily of Independent Women’s Forum

Tom Giovanetti of Institute for Policy Innovation

Bob Adams of League of American Voters

Colin Hanna of Let Freedom Ring

Seton Motley of Less Government

Amy Ridenour of The National Center for Public Policy Research

William Shaker of Republican Pac

William Greene of RightMarch.com

Karen Kerrigan of Small Business & Entrepreneurship Council

Rick Hendrix of ClearWord Communications Group

Sam Slom of Smart Business Hawaii

David Williams of Taxpayer’s Protection Alliance

Mattie Corrao of Center for Fiscal Accountability

Lisa Miller of Tea Party WDC 

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Obamacare's Medicine Cabinet Tax to Hit Millions on Jan. 1


Posted by Ryan Ellis, John Kartch on Thursday, December 23rd, 2010, 3:18 PM PERMALINK

[PDF Version]

Due to an Obamacare provision taking effect on January 1, Americans will no longer be able to use their Flexible Spending Account (FSA) and Health Savings Account (HSA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (with the exception of insulin).

Under current rules, health consumers may use these pre-tax accounts to purchase non-prescription, over-the-counter medicines.  But on New Years Day 2011, the 40 million Americans who use FSAs and HSAs will no longer be able to use their accounts to buy simple, everyday medicines like the following:

--Aspirin
--Antacids
--Laxatives
--Menstrual pain relievers
--Antihistamines
--Stimulants
--Anti-Ulcer Medicines
--Athlete’s Foot Cream
--Cough Medicine
--Motion Sickness Medicine
--Anti-Diarrheal Medicine
--Decongestants
--Hemorrhoid Cream
--Anti-Flatulence Medicine

The provision is just one of Obamacare’s two dozen new or higher taxes totaling nearly $600 billion over this decade. 

The tax increase will affect any family that has an HSA or FSA.  Therefore, it is clear violation of President Obama’s oft-repeated promise not to raise “any form of taxes” on any family making less than $250,000 per year.

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Baucus Lies About Tax Hikes in Senate Health Bill


Posted by Ryan Ellis, John Kartch on Wednesday, December 2nd, 2009, 10:23 AM PERMALINK

Speaking on the U.S. Senate floor on Monday, Max Baucus falsely claimed that the health bill under consideration does not raise taxes:

“I have also heard it argued that health care reform will raise taxes.  That, too, is false. In fact, health care reform will provide billions of dollars in tax relief to help American families and small businesses afford quality health insurance—tax cuts.  The Joint Tax Committee—again bipartisan and which serves both the House and the Senate—tells us, for example, that our bill would provide $40 billion in the tax cuts in the year 2017 alone—$40 billion in tax cuts in the year 2017.”
 
In fact, the net tax increase (that is, taking into account the tax cuts Baucus mentions) in 2017 alone is a staggering $132.5 billion. Over the first decade of the tax increases taking effect, the net tax increase easily exceeds $1 trillion. 
 
“Senator Baucus needs to explain how a ten-year, trillion-dollar net tax increase is actually a tax cut,” said Grover Norquist, president of Americans for Tax Reform.
 
The official tax score for the bill is provided by the Joint Tax Committee (JCT) and the Congressional Budget Office (CBO). In 2017 alone, they report a net tax hike of $132.5 billion – not a tax cut as Sen. Baucus claims. Over the ten-year scoring window, they report a net tax hike of $857.9 billion.
 
Americans for Tax Reform (ATR) has compiled a comprehensive list of all the tax increases in the Senate health bill. (To view the complete list, click here) Among other things, the bill raises taxes on current health insurance plans, families lacking health insurance, and small employers.
 
“After Senator Baucus is through actually reading the official tax score, he might want to read ATR’s list detailing the eighteen separate tax increases in this bill,” said Norquist.

Click here for a printable PDF of this document

 

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