The Affordable Care Act is looking less and less so as 2013 approaches. The adage that “Nothing is sure except death and taxes” is certainly applicable as the New Year gets closer. To pay for the PPACA, the government is requiring everyone to give up some of that revenue that came from some effort that “you didn’t build.”
In light of who pays more, it appears that all stakeholders involved with health care—including families, businesses, and medical providers—are going to have to tighten their belts come January.
According to Fox News, while the individual mandate tax gets most of the attention, the PPACA, also not so affectionately known as ObamaCare, actually contains 20 new or higher taxes on the American people.
John Kartch, director of communications at Americans for Tax Reform, reports that these taxes (there is even a 10 percent “tanning tax”) are gradually phased in over the next few years up to 2018 (when the tax on comprehensive health insurance plans kicks in.) In just a few months starting in 2013, five major taxes will come into force:
1. The medical device manufacturing tax. This 2.3 percent tax on medical device makers will raise the price of (for example) every pacemaker, prosthetic limb, stent, and operating table. Can you remind us, Mr. President, how taxing medical devices will reduce the cost of health care? The tax is particularly destructive because it is levied on gross sales and even targets companies who haven’t turned a profit yet.
These are often small, scrappy companies with less than 20 employees who pioneer the next generation of life-prolonging devices. In addition to raising the cost of health care, this $20 billion tax over the next 10 years will not help the country’s jobs outlook, as the industry employs nearly 400,000 Americans. Several companies have already responded to the looming tax by cutting research and development budgets and laying off workers.
2. The high medical bills tax. This onerous tax provision will hit Americans facing the highest out-of-pocket medical bills. Currently, Americans are allowed to deduct medical expenses on their 1040 form to the extent the costs exceed 7.5 percent of one’s adjusted gross income. The new ObamaCare provision will raise that threshold to 10 percent, subjecting patients to a higher tax bill. This tax will hit pre-retirement seniors the hardest. Over the next ten years, affected Americans will pony up a minimum total of $15 billion in taxes thanks to this provision.
3. The flexible spending account cap. The 24 million Americans who have flexible spending accounts will face a new federally imposed $2,500 annual cap. These pre-tax accounts, which currently have no federal limit, are used to purchase everything from contact lenses to children’s braces. With the cost of braces being as high as $7,200, this tax provision will play an unwelcome role in everyday kitchen-table health care decisions.
The cap will also affect families with special-needs children, whose tuition can be covered using FSA funds. Special-needs tuition can cost up to $14,000 per child per year. This cruel tax provision will limit the options available to such families, all so that the federal government can squeeze an additional $13 billion out of taxpayer pockets over the next ten years.
The targeting of FSAs by President Obama and congressional Democrats is no accident. The progressive left has never been fond of the consumer-driven accounts, which serve as a small roadblock in their long-term drive for a one-size-fits-all government health care bureaucracy. For further proof, note the ObamaCare “medicine cabinet tax” which since 2011 has barred the 13.5 million Americans with Health Savings Accounts from purchasing over-the-counter medicines with pre-tax funds.
4. The surtax on investment income, Under current law, the capital gains tax rate for all Americans rises from 15 to 20 percent in 2013, while the top dividend rate rises from 15 to 39.6 percent. The new ObamaCare surtax takes the top capital gains rate to 23.8 percent and top dividend rate to 43.4 percent. The tax will take a minimum of $123 billion out of taxpayer pockets over the next ten years.
And, last but not least, according to Americans for Tax Reform...
5. The medicare payroll tax increase. This tax soaks employers to the tune of $86 billion over the next ten years. As you can understand, there is a reason why the authors of ObamaCare wrote the law in such a way that the most brutal tax increases take effect conveniently after the 2012 election. It’s the same reason President Obama, congressional Democrats, and the mainstream media conveniently neglect to mention these taxes and prefer that you simply “move on” after the Supreme Court ruling.
Americans For Tax Reform has a full list of ObamaCare’s 20 new or higher taxes on American families and small businesses. So, if you are looking to save money on your health care expenses, you should consider options that actually provide value and savings, and that are affordable. There are several to choose from, but consider what purchases that interest you in light of giving more to Uncle Sam. After all, even he wants to be fed. Beware, the taxman cometh!