Obamacare’s Chronic Care Tax is an income tax hike that hits 10 million households that happen to have high out of pocket medical expenses in a given year – the average income of households paying this Obamacare tax is $53,000
Though rarely if ever mentioned by the mainstream media, Obamacare is loaded with tax hikes on the middle class. Today we look at just one of these taxes, the Obamacare Chronic Care Tax:
The Obamacare Chronic Care Tax violated Obama’s middle class tax pledge. Obamacare imposed a $1 trillion tax hike on the American people, and violated President Obama’s own “firm pledge” not to raise any form of tax on any middle class American. One of the most widespread Obamacare tax hikes is the Chronic Care Tax.
The Obamacare Chronic Care tax is an income tax hike. Before Obamacare, Americans facing high out of pocket medical expenses were allowed an income tax deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this income tax deduction, it widens the net of taxable income.
The Obamacare Chronic Care Tax hits at least 10 million American households each year. According to IRS data, each year approximately 10 million households are hit with the Obamacare Chronic Care Tax, and nearly all were middle class. The average household income of those hit with this Obamacare tax: $53,000.
The Obamacare Chronic Care Tax is a $36 Billion Tax Hike over 10 years. By raising the threshold that Americans can claim the chronic care tax deduction to 10 percent, ATR estimates that the income tax increase for the average family claiming this tax deduction is $200 – $400 per year. The latest CBO score shows that the Obamacare Chronic Care tax hits these families with $36 billion in higher taxes over ten years.
The Senate’s Better Care Reconciliation Act abolishes the Chronic Care Tax, providing significant tax relief for low and middle income households. The Senate healthcare bill restores the pre-Obamacare 7.5 percent threshold, providing significant middle class income tax relief.
Photo Credit: Gage Skidmore