Supreme Court Ruling on Health Care

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sharmin said:
I don’t understand where that figure is coming from. If people buy health insurance it won’t raise taxes at all.
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New ObamaCare Taxes - $500 billion

Arranged by their respective effective dates, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:

Taxes that took effect in 2010:
  1. 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 HHS. Bill: PPACA; Page: 1,961-1,971
  2. 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. Bill: Reconciliation Act; Page: 108-113
  3. "Black liquor" tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105
  4. 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 year. Bill: PPACA; Page: 1,971-1,980
  5. 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 services. Bill: PPACA; Page: 2,004
  6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399
Taxes that took effect in 2011:
  1. 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). Bill: PPACA; Page: 1,957-1,959
  2. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
Tax that took effect in 2012:
  1. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
Taxes that take effect in 2013:
  1. Surtax on Investment Income ($123 billion/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*

2012 15% 15% 35%

2013+ 23.8% 43.4% 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.
  1. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:
    Code: 
                                          First $200,000
                                      ($250,000 Married)       All Remaining Wages                                            
                                      Employer/Employee  /  Employer/Employee
Current Law 1.45%/1.45% 1.45%/1.45%
2.9% self-employed 2.9% self-employed

Obamacare Tax Hike 1.45%/1.45% 1.45%/2.35%
2.9% self-employed 3.8% self-employed

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12.** 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. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
  1. 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. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
  2. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/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 education. Bill: PPACA; Page: 2,388-2,389
  3. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994
  4. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000
Taxes that take effect in 2014:
  1. 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
    Code: 
       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
  1. 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. 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
  1. Tax on Health Insurers ($60.1 bil/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
Taxes that take effect in 2018:
  1. 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). 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
atr.org/tax-hikes-obamacare-scotus-rule-a6996#ixzz1z5dvWVRs​
 
rlg94086 said:
I’ve heard of this sort of “encouragement” before, but I can’t place it exactly.
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I think they’re referred to as “tax incentives” and you may have come across a few of them in the course of your tax filings. Perhaps you elected to purchase a house in the last few years or an eco-friendly vehicle? Now you can report to the IRS that you purchased or possess health insurance and receive a 1% deduction (in 2014).
 
EmperorNapoleon said:
I think they’re referred to as “tax incentives” and you may have come across a few of them in the course of your tax filings. Perhaps you elected to purchase a house in the last few years or an eco-friendly vehicle?
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Nope. A “tax incentive” is not a new tax that is charged if you don’t buy something. A “tax incentive” is when the government gives you a break on your current taxes if you do buy something…totally opposite.
 
sharmin said:
I don’t understand where that figure is coming from. If people buy health insurance it won’t raise taxes at all.
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Tale a look at Section 1401 of PL 111-148 (the affordable care act)

The “affordable premium credits” come from the US Treasury. That’s where the expense comes from. That expense will need to be paid for somewhere (unless you want the govt to print more money than it already does).

CBO Estimates (March 2012) predict that 509 billion in additional taxes will be collected in the 10 years from 2012-2021. See Table 2 on page 11 of their report.

Of course, that same CBO report estimates that 1,762 billion will be paid out as a result of this law. So that means that in the next 10 years, Obamacare will be responsible for 1.252 TRILLION in additional debt.

Hope they have fun with that.
 
rlg94086 said:
Nope. A “tax incentive” is not a new tax that is charged if you don’t buy something. A “tax incentive” is when the government gives you a break on your current taxes if you do buy something…totally opposite.
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Not at all. The tax is automatically assessed as part of your federal income taxes unless you to report the purchase to the IRS. It is part of your federal income tax rate that cannot be separated and removed unless the requirements of every other deduction are met.
 
catholicanne said:
My husband and I are uninsured and we sure as heck didn’t want this bill to pass. It’s cheaper to pay the $150 a pop for a doctor visit twice a year than it is to buy insurance.
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What if you were to get Cancer? What if one of you had a heart attack? Would it be cheaper then?
 
I recall Pelosi saying they would have to pass the bill to know what’s in it. Nobody did, of course; probably not even her. But they passed it.

Now, I think one could properly say people will have to live with Obamacare for quite some while to know what it does. I suspect the unforeseen consequences will, like the contraceptive/abortifacient mandate, contain many a surprise.

If, indeed, there are to be broader, massively more inclusive pools, premium increases will likely be a huge surprise to industries and industrial workers, who will find themselves “pooled” with the much more expensive white collar workers, all other things being equal. This is because the “well worker effect” is far more dramatic in keeping industrial healthcare costs down than it is for white collar workers.

So, will employers keep it and pass off more costs to the workers, or will they dump it and pay the fines? Nobody knows. If they dump it, those who will be hit the hardest will be the highest paid industrial workers, because a lot of them won’t be in the subsidized group for individual insurance. As I recall, exemptions for unions won’t last forever.

If states can opt out of the broadened Medicaid provision (and I would think many would because it’s an unfunded mandate) then there will be a lot of people who don’t qualify for standard Medicaid, thereby making the cost of Obamacare more expensive due to there being more subsidies than expected.

The coverage mandates will, of course, make insurance much more expensive than it is now. Those not entitled to subsidies will see their costs go up dramatically when individuals who prefer to pay minimal fines get sick and opt to take insurance only then.

The government doesn’t seem to know how many illegals there are in this country and will not send any of them home or guard the borders, so again, the costs will be greater than anticipated because coverage will be a magnet additional to non-enforcement, and particularly for those who are already ill. Likely all will be subsidized.

Looks like a mess to me. A bizarre, but not improbable outcome would be middle class people dropping coverage because, while they might be (barely) able to afford it now, they won’t be able to carry all the mandated coverage. So, the middle class might now turn out to be the group with the most uninsureds. Of course, they will be able to get insurance when faced with a catastrophic illness, thus pushing premiums even higher and further reducing the number who carry insurance all the time, sick or well. At a point, coverage is going to cost more than the fines unless the fines are made very high. Right now, as near as I can tell, it’s cheaper for a middle class person to pay the fine and sign up for insurance only when it’s needed. At a point, “unaffordable” is simply unaffordable.

Since many middle class people will not be subsidized by the government, the pools of insureds could very well shrink, collapsing the whole enterprise with the insurers.

A strange outcome could be that employers, particularly small employers, could simply offer to increase workers’ incomes sufficient to pay the workers’ fines and let the workers sign up for individual insurance when they get sick.

Getting rid of Medicare Advantage will shove more seniors out into the secondary insurance market, but how many will actually buy it unless they get sick?

And, of course, nobody would have guessed that Obama would impose the contraceptive/abortifacient mandate. What else does he have in store?
 
Ridgerunner said:
So far, as i understand it, the Obama tax (exclusive of the “fine”) is $1300 per person due to increased premiums. That’s for the people and/or their employers who are not subsidized in some manner.
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Do you have a source for this? Everything I read said 2.5% of income, minimum of $695.
 
InSearchofGrace said:
Ergo,

while the Supreme Court ruled that ObamaCare is constitutional, it established that the President is a prevaricator.
,
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And Obama can then join his opponent, Romney, who is a master of the art. Politicians all prevaricate, to a greater or lesser extent. If it’s not in their blood, they learn fast that their political survival depends on it as well as incessant fund-raising.
 
7_Sorrows said:
i also am uninsured. if i can’t afford insurance now, how i am i going to be able to pay for it under obamacare or how will i be able to afford the tax i will have to pay if i don’t have insurance. not sure what the benefit is supposed to be with obamacare.
i broke my ankle last year and was able to get on the state health program for 5 months.
i have not had insurance since last august and have been employed for 3 months, but will not be able to affford insurance because i am not making enough. i am already living with my son and daughter-in-law. i think obamacare will make me poorer - not sure it wiill make me healthier.
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The benefit is that as of 2014, you can buy cheaper plans (income based) through a state exchange program. This should make it more affordable to you than it is now.
 
EmperorNapoleon said:
Not at all. The tax is automatically assessed as part of your federal income taxes unless you to report the purchase to the IRS. It is part of your federal income tax rate that cannot be separated and removed unless the requirements of every other deduction are met.
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Ah…so it is a new tax on everyone. Got it. I thought it was a tax that was assessed only if you didn’t purchase. Thanks.

I’m sure everyone is going to be thrilled with an across the board tax increase. They didn’t even target “the wealthy” this time…
 
Point taken 🙂
EmperorNapoleon said:
The point Roberts made was that the State doesn’t have the Constitutional authority to compel commerce even if the affected persons are engaging in directly linked transactions. The fact that driving is a privilege doesn’t change that. I don’t believe his line of logic is sound on this issue but it is the standard by which such things will be judged moving forward. Just because you possess a body that will inevitably require medical care doesn’t mean that the State can compel you to purchase medical insurance. Likewise, just because you possess a car and will inevitably drive it does not mean that the State can compel you to purchase car insurance.
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sharmin said:
That means if you can’t afford to buy health insurance, you will have to pay a tax at tax time of $650. If you get a refund currently, it will be deducted off that. Not too bad considering if you or your children need to go to the ER for anything, they have to treat you.
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Now my question is: how are they going to collect the $650? With almost 40% of Americans paying no federal tax, the only reason to file is for a refund. A good portion of those aren’t even required to file.

If you “can’t afford to buy health insurance”, how does this new plan help? Most lower income families, living paycheck to paycheck, would surely choose to pay $650 that would (maybe) be collected next year on tax day rather than the $2000 to $5000 it would cost to buy insurance through the exchanges.

It seems to me that the group of people that this law is supposed to bring into the ranks of the “insured” are those most likely to opt out - the same as many of them have been opting out already.
 
rlg94086 said:
So, it isn’t a tax being assessed on everyone?
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Sure it is, but I’m certainly not sad or upset about the fact that a 1% tax two years from now will be deducted. I’ve never known anyone who doesn’t like tax deductions.
 
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