Monday, March 22, 2010

My Taxes Aren't Going Up - O RLY? Health Care edition

Now that the House has passed the Senate's health-care bill (H.R. 3590), let's revisit once again the idea, stated very clearly by President Obama, that your taxes won't go up if you make less than $250,000 a year.  Was that true?  Well, let's take a look at the bill, as analyzed by Americans for Tax Reform.  Per their analysis, there are "seven taxes that unquestionably violate Obama’s pledge".  And they are:

Individual Mandate Excise Tax (Page 324/Sec. 1501/Jan 2014*): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following (page 71 of manager’s amendment updates Reid bill):
2 People
3+ People
$495/0.5% AGI
$990/0.5% AGI
$495/1.0% AGI
$990/1.0% AGI
$495/2.0% AGI
$990/2.0% AGI
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).
Employer Mandate Tax (Page 348/Sec. 1513/Jan 2014*):  Small business owners pay their business taxes on their personal 1040 forms.  This tax does not exempt startup small business owners even if they make less than $250,000. If the 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 $750 for all full-time employees.  Applies to all employers with 50 or more employees.

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).

Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil/Jan 2011): Americans would no longer be 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 (Page 1998/Sec. 9004/$1.3 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 – akaSpecial Needs Kids Tax” (Page 1999/Sec. 9005/$14 bil/Jan 2011): Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2011 (added on page 363 of manager’s amendment). 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.

Medical Itemized Deductions Cap (Page 2034/Sec. 9013/$15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction if the total cost of the expenses reduces the filer’s income by 7.5%. The new provision would impose a threshold of 10%. This new tax will most adversely affect early retirees and the catastrophically ill. Waived for 65+ taxpayers in 2013-2016 only.

Tax on Indoor Tanning Services (Page 373 of Manager’s amendment/$2.7 billion/July 1, 2010): New 10% excise tax on Americans using indoor tanning salons

It just blows me away that a Facebook friend just praised President Obama for keeping his promises.  If these seven taxes do not totally represent the breaking of a fundamental campaign promise to the American people, I don't know what does.


Anonymous said...

Unfortunately, the Republican Party had multiple chances to contribute and shape the bill. Instead, they chose an obstructionist tactic, and now you got what you got.

BTW, I'm sick of people whining that they want everything for free. Guess what, nothing is free. Everyone wants health care (ER care) on demand even though many don't have high paying jobs or insurance. That is an unsustainable system. Yes, this bill raises taxes. But, the Republican party didn't provide alternative solutions.

Obama Care is a first step. This is the first step to fixing the system. Health care expenses were the cause of over half of the bankruptcies in America.

I've always been fortunate. I went to college under my parents insurance, then got a good engineering job. My employer provides good insurance. Jobs like mine are harder and harder to come by. Eventually, companies like mine won't consider US workers unless they have Master or Doctorate degrees.

At the same time, my employer hires people in countries around the world. None of my peers around the world have to worry about health care coverage. It is all taken care of.

The American people need to drop the rage and think through what they want their nation to become. A nation of "if you get sick or in an accident and you don't have insurance, you die" or "lets focus on business and innovation and let the government take care of health care."

We are not even close to the second statement. People like you will never let us get there.

Snowed In said...

Catching up on comments I haven't answered yet:

But, the Republican party didn't provide alternative solutions.

Yeah, they did. Don't rely on Dem talking points for your arguments.

The American people need to drop the rage and think through what they want their nation to become. A nation of "if you get sick or in an accident and you don't have insurance, you die" or "lets focus on business and innovation and let the government take care of health care."

It's cute how you think that those are the only two alternatives. Furthermore, the second statement will never work, as a government-run health care system, toward which we are still trending, will inevitably stifle medical innovation as other costs rise.