Obamacare taxes -- Happy New Year

Thanks to my friend Fred for reminding me:

$1 Trillion Obamacare Tax Hike Hitting on Jan. 1

On January 1, regardless of the outcome of fiscal cliff negotiations, Americans will be hit with a $1 trillion Obamacare tax hike.

Obamacare contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1. In total, for the years 2013-2022, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.

The five major Obamacare taxes taking effect on January are as follows:

The Obamacare Medical Device Tax: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to artificial hips more expensive.

The Obamacare Flex Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the ten years. (Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)

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 several million 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. This Obamacare tax provision will limit the options available to these families.

The Obamacare Surtax on Investment Income: This is a new, 3.8 percentage point 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:

	Capital Gains	Dividends	Other*
2012	15%	15%	35%
2013+ (current law)	23.8%	43.4%	43.4%

The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.

The Obamacare “Haircut” for Medical Itemized Deductions: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.

The Obamacare Medicare Payroll Tax Hike: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:

	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

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Posted by John Kartch on Friday, December 28, 2012 5:10 PM ES

Obamacare -- what a political score!

http://hotair.com/archives/2012/12/15/obamacare-is-coming-to-town/

I don't think any of the geniuses in DC really thought this Obamacare deal all the way through. Obama and Democrats in Congress wanted a political score, and, as usual, they didn't take economic reality and unintended consequences into account. States are refusing to set up exchanges because they have to have every step approved by the feds -- if the exchanges don't work states get blamed, although they had no authority over the design, so about 25 states are telling the federal government to design the exchanges. Nothing is getting done but certain aspects of the ACA are going into legal effect. This is going to be the biggest federal debacle in our history. I don't see any way this will work.

States against the State

http://reason.com/blog/2012/12/03/states-should-opt-out-of-obamacare-excha

Individual states across the country might overload the federal government to the point it can't properly implement Obamacare. To properly design such a system with so many variables to consider is impossible, anyway, and what will happen is that Obama and the Democrats will become angry and insist that their healthcare program be implemented, so they will throw as much money as required to get it done. The result will be a Rube Goldberg concoction that for a period of time seriously damages US healthcare. Because government officials will be desperate to get the job done, corruption will be rampant and the costs exorbitant. I predict that Obamacare is what will get the nation's attention regarding interventionist government, as if we we haven't already experienced enough unintended consequences from government interventions -- but, healthcare is a serious matter that affects everyone. This will not turn out well.

And what about ACA?

http://www.businessweek.com/articles/2012-09-27/a-looming-u-dot-s-dot-doctor-shortage

It's almost impossible to find any media reporting on what's known as Obamacare. Perhaps it's because many states are not putting together their part of the plan. Right now, the lack of planning will overload the healthcare industry, especially with the shortage of doctors (see above link). In order to hustle and fix problems like this, I predict government will throw money at the ACA in a desperate move to make it work, thus costing taxpayers billions of dollars more than what many researchers already see as added costs not factored in during the marketing of Obamacare. Obamacare is supposed to answer the problem of rising healthcare costs, but from all initial indications, it's going to cost us more, at least for a good while. Maybe government will get it under control and we'll witness falling healthcare costs, but with 30 million people added to the number of the insured, it's not likely costs will go down. One might say that just insuring this 30 million is a noble result, and that might be true if the system doesn't collapse leaving everyone in a healthcare lurch. Being insured is one thing, but having access to good healthcare is an entirely different matter.

More deceit from Obama

http://www.nationalreview.com/articles/331091/obamacare-s-hidden-switcheroo-john-fund

Obamacare must be rolled back. If implemented, it will be the final nail in the coffin carrying a dead economy.