Analysis: Obamacare Will Trigger Huge Tax Increases

Tuesday, 16 Mar 2010 04:15 PM

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An analysis of the Obama healthcare bill reportedly shows there will be huge tax increases if Congress passes this legislation.

For starters, people who incur high medical costs won’t be able to deduct as many of them; the legislation increases the adjusted gross income threshold for claiming an itemized deduction from 7.5 percent to 10 percent, Boston.com recently reported.

High-income taxpayers will incur higher hospital insurance tax.

The Medicare tax on wages earned by individuals making in excess of $200,000 and married couples making over $250,000 will go up by 0.50 percent beginning Jan. 1, 2013.

Also, a 40 percent excise tax on high cost employer-sponsored health coverage for any health coverage plan that is costs over $8,500 per year for single coverage and $23,000 per year for family coverage.

After massive protests by government workers and union members, the Senate moved this levy from individuals who receive the tax-free benefit to the insurance company or plan administrators that provide the benefit.

Some of the other taxes are less direct, but certain to be passed on to consumers.

Examples: The bill calls for a $6.7 billion tax imposed on health insurance providers and a $2.3 billion excise tax on branded prescription pharmaceutical manufacturers and importers — as well as a $2 billion excise tax on the medical device industry that starts immediately and is non-deductible for the corporation being taxed.

Obamacare will require all Americans to maintain health insurance; non-compliers will be assessed an annual tax penalty that starts at $750 and escalates in subsequent years.

Consumers will also pay a five percent excise tax on elective cosmetic medical procedures.

Finally, the bill appears to provide no additional benefits to Massachusetts residents, who already have universal health insurance — just additional taxes.

A recent Rasmussen Reports poll found 53 percent of respondents oppose Obama's healthcare plan, 57 percent said they believe it will hurt the economy, and 81 percent said they believe it is at least somewhat likely the plan will cost more than advertised, the Washington Examiner reports.

© 2014 Moneynews. All rights reserved.

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