President Barack Obama has admitted his signature healthcare law raises some taxes — but a tax reform group said Wednesday he wildly understated their effect.
"So what we did, it's paid for by a combination of things. We did raise taxes on some things," Obama said of the Affordable Care Act during remarks Tuesday at the Clinton Global Initiative.
"We, for example, said that for high-end income individuals, you can pay a slightly higher Medicare rate — Medicare tax. So we bumped that up a little bit.
"We said that for employers who are currently providing a so-called Cadillac healthcare plan, where there are so many bells and whistles [and] there's no incentive to actually spend wisely when it comes to healthcare, we're actually going to penalize you for that. Not only to raise a little bit of money, but also to say you're encouraging the worst aspects of a healthcare system where you spend a lot of money [and] you don't get better outcomes."
"... So the bottom line is, through these various mechanisms, we raised enough money to pay for providing health insurance for those who don't have it, to provide these tax credits in the marketplace, and at the same time, because we're driving down costs, we actually end up saving a little money," the president said.
Americans for Tax Reform charged the "raise taxes on some things" remark was an "understatement."
The group outlined a partial list of Obamacare's new or higher taxes on Americans.
Included for this year, the group said, is a medical device tax of 2.3 percent 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 make everything from pacemakers to artificial hips more expensive," the group said.
Also, Americans for Tax Reform said, before Obamacare Americans were allowed a deduction if high medical expenses exceeded 7.5 percent of their adjusted gross income.
"Obamacare now imposes a threshold of 10 percent" of adjusted gross income, the group said. "Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income."
And the group noted the 30 to 35 million Americans who use a pre-tax Flexible Spending Account at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500.
"This will squeeze $13 billion of tax money from Americans over the next 10 years," the group said.
Starting in the 2014 tax year, the group said, anyone not buying "qualifying" health insurance, as defined by Obama's Department of Health and Human Services, must pay an income surtax to the IRS. The Congressional Budget Office recently estimated
6 million people will be subject to the tax.
And starting in 2018, Obamacare imposes a new 40 percent excise tax on high-cost or "Cadillac" health insurance plans.
"This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans," it said.
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