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Healthcare Bill Breaks Obama's Oft-Repeated Promise on Taxes
By Americans for Tax Reform | 10/22/09 | 01:22 AM EDT | 3 Comments
Over and over again, President Obama has promised not to raise “any form” of taxes on families making less than $250,000 per year. Yet, the U.S. Senate is getting ready to consider a government healthcare bill which does just that. Here’s how:
Health Insurance Mandate Taxes on Working Families
Individual Mandate Excise Tax. Americans who do not sign up for health insurance will have to pay an excise tax in the following range:
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Single
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Family
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100-300% of Federal Poverty Level
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$750
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$1500
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300+% of Federal Poverty Level
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$900
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$1900
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300 percent of the federal poverty line is well under $250,000. For a family of four, it’s $67,000. For an individual, it’s about $30,000.
Employer Mandate Tax. $400 per employee if health coverage is not offered. Note: this is a huge incentive to drop coverage, as $400 is much less than the average plan cost of $11,000 for families or $5000 for singles (Source: AHIP)
Small businesses pay their tax liability on their owners’ 1040 forms. This $400 employer mandate tax does not hold harmless business owners making less than $250,000
Tax Hikes on Healthcare Spending Accounts
·Cap on Flex-Spending Account (FSA) contributions at $2500: Currently, the contribution level is unlimited
Medicine Cabinet Tax : Americans would no longer be able to purchase over-the-counter medicines with their FSA, Health Savings Account (HSA), or Health Reimbursement Arrangement (HRA)
Increase in the Non-Qualified HSA Distribution Penalty from 10% to 20%: This makes HSAs less attractive, and paves the way for HSA pre-verification
There are 30 million Americans with FSAs. About 8 million Americans have an HSA. Virtually all of them make less than $250,000 per year. These are clear tax hike on these families
Denying a Tax Deduction for Medical Costs
Increase “haircut” of medical itemized deductions from 7.5% to 10% of adjusted gross income (AGI), further denying medical itemized deductions
There is no exemption made here for families making less than $250,000 per year.
If President Obama is serious about his tax pledge, he should immediately renounce the bill.
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3 Comments | Related Topics »National
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Comments
Our president had no intention of keeping this promise. Everyone's taxes will skyrocket if this legislation becomes law.
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|Most people have no idea just how much this will cost them. Government subsidies don't kick in until you have payed, big time. Be careful what you wish for.
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|This is about the most looney proposal I have read in a long time. We need to encourage more HSAs and not give people a reason to not open one. In particular we need to expand them so insurance premiums can be paid and move insurance to the individual level and abolish group plans.
For example, the above notes "Employer Mandate Tax. $400 per employee if health coverage is not offered."
We want to give our secretary insurance. But she does not work enough hours for the group plan consistently all year. So she goes on the plan, and then on COBRA thoughout the year. It is a royal pain. Then her doctors get payment reject notices and then she starts crying. We spend more of our time dealing with her health insurance than any other aspect of our practice. This problem would all go away if insurance was at the individual level!!
Andy Favor, Candidate for California State Controller
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