Fiscally conservative, outspoken, and a believer in the Constitution of the United States.
Friday, December 7, 2012
Bend Over This Won't Hurt a Bit
As we begin a new year, and enter intothe new era of socialized medicine, lets take a look just at how it is going to be funded, well at least at first....
Individual Mandate Excise Tax(Jan 2014): Starting in
2014, anyone not buying “qualifying” health insurance must pay an income surtax
according to the higher of the following
for religious objectors, undocumented immigrants, prisoners, those earning less
than the poverty line, members of Indian tribes, and hardship cases (determined
Employer Mandate Tax(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. This
provision 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).
score of individual and employer mandate tax penalty: $65 billion/10
Surtax on Investment Income ($123 billion/Jan. 2013):
This increase involves the 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
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.
Excise Tax on Comprehensive Health Insurance Plans($32 bil/Jan
2018): Starting in 2018, new 40 percent excise tax on “Cadillac”
health insurance plans ($10,200 single/$27,500 family). For early retirees and
high-risk professions exists a higher threshold ($11,500 single/$29,450
family). CPI +1 percentage point indexed.
Hike in Medicare Payroll Tax($86.8 bil/Jan
Medicine Cabinet Tax($5 bil/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)
HSA Withdrawal Tax Hike($1.4 bil/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.
Flexible Spending Account Cap – aka“Special
Needs Kids Tax”($13 bil/Jan 2013): Imposes cap of $2500
(Indexed to inflation after 2013) on FSAs (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. 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
Tax on Medical Device Manufacturers($20 bil/Jan 2013):
Medical device manufacturers employ 360,000 people in 6000 plants across the
country. This law imposes a new 2.3% excise tax. Exemptions include items
retailing for less than $100.
Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of
AGI($15.2 bil/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; it is waived for 65+
taxpayers in 2013-2016 only.
Tax on Indoor Tanning Services($2.7 billion/July 1,
2010): New 10 percent excise tax on Americans using indoor tanning
Elimination of tax deduction for employer-provided retirement Rx drug coverage
in coordination with Medicare Part D($4.5 bil/Jan
Blue Cross/Blue Shield Tax Hike($0.4 bil/Jan 2010): The
special tax deduction in current law for Blue Cross/Blue Shield companies would
only be allowed if 85 percent or more of premium revenues are spent on clinical
Excise Tax on Charitable Hospitals(Min$/immediate):
$50,000 per hospital if they fail to meet new "community health assessment
needs," "financial assistance," and "billing and collection" rules set by
Tax on Innovator Drug Companies($22.2 bil/Jan 2010): $2.3
billion annual tax on the industry imposed relative to share of sales made that
Tax on Health Insurers($60.1 bil/Jan 2014): Annual tax on
the industry imposed relative to health insurance premiums collected that year.
The stipulation phases in gradually until 2018, and is fully-imposed on firms
with $50 million in profits.
$500,000 Annual Executive Compensation Limit for Health Insurance
Executives($0.6 bil/Jan 2013)
Employer Reporting of Insurance on W-2(Min$/Jan 2011):
Preamble to taxing health benefits on individual tax returns.
Corporate 1099-MISC Information Reporting($17.1 bil/Jan
2012): Requires businesses to send 1099-MISC information tax forms
to corporations (currently limited to individuals), a huge compliance burden for
“Black liquor” tax hike(Tax hike of $23.6 billion). This
is a tax increase on a type of bio-fuel.
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.