Here is a good list of the 20 new taxes from ObamaTax, and 7 middle class taxes, all equaling over $500B over the next 10 years.
“No family making less than $250,000 a year will see any form of tax increase.” President Obama
“If there ever was a reason for bipartisan rage about this law, it should be on the twenty – yes, twenty – hidden new taxes of this law. Making matters even more relevant is that seven of these taxes are levied on all citizens regardless of income. Hence, Mr. Obama’s promise not to raise taxes on anyone earning less than $250,000 is just another falsehood associated with this legislation.” (1) Robert Bonelli
Summarized by David Chaney: The Seven Middle Class Taxes (and 13 with indirect impact on Middle Class)
1. Individual Mandate Tax
“The first, and best known, of these seven taxes that will hit all Americans as a result of Obamacare is the Individual Mandate Tax (no longer concealed as a penalty). This provision will require a couple to pay the higher of a base tax of $1,360 per year, or 2.5% of adjusted growth income starting with lower base tax and rising to this level by 2016. Individuals will see a base tax of $695 and families a base tax of $2,085 per year by 2016.
2. Medicine Cabinet Tax
Next up is the Medicine Cabinet Tax that took effect in 2011. This tax prohibits reimbursement of expenses for over-the-counter medicine, with the lone exception of insulin, from an employee’s pre-tax dollar funded Health Saving Account (HSA), Flexible Spending Account (FSA) or Health Reimbursement Account (HRA). This provision hurts middle class earners particularly hard since they earn enough to actually pay federal taxes, but not enough to make this restriction negligible.
3. Flexible Spending Account (FSA) Cap
The Flexible Spending Account (FSA) Cap, which will begin in 2013, is perhaps the most hurtful provision to the middle class. This part of the law imposes a cap of $2,500 per year (which is now unlimited) on the amount of pre-tax dollars that could be deposited into these accounts. Why is this particularly hurtful to the middle class? It is because funds in these accounts may be used to pay for special needs education for special needs children in the United States. Tuition rates for this type of special education can easily exceed $14,000 per year and the use of pre-tax dollars has helped many middle income families.
4. Medical Itemized Deduction Hurdle
Another direct hit to the middle class is the Medical Itemized Deduction Hurdle which is currently 7.5% of adjusted gross income. This is the hurdle that must be met before medical expenses over that hurdle can be taken as a deduction on federal income taxes. Obamacare raises this hurdle to 10% of adjusted gross income beginning in 2013. Consider the middle class family with $80,000 of adjusted gross income and $8,000 of medical expenses. Currently, that family can get some relief from being able to take a $2,000 deduction (7.5% X $80,000 = $6,000; $8,000 –$6,000 = $2,000). An increase to 10% would eliminate the deduction in this example and if that family was paying a 25% federal tax rate, the real cost of that lost deduction would be $500.
5. Health Savings Account (HSA) Withdrawal Tax Hike
The fifth new tax on the middle class, and all Americans, is the Health Savings Account (HSA) Withdrawal Tax Hike. This provision increases the additional tax on non-medical early withdrawals from an HSA from 10% currently to 20% beginning in 2013. This provision actually sets these accounts apart from Investment Retirement Accounts (IRAs) and other tax advantaged accounts, all of which remain with a 10% early withdrawal tax.
6. Indoor Tanning Services Tax
Another regressive tax that is part of this law began in 2010 and that is the Indoor Tanning Services Tax, which places a 10% excise tax on people using tanning salons. While some may regard this as insignificant, the broader implication is that this act of taxation is a blatant move by the federal government to control the behavior of citizens. This provision, as does the Individual Mandate and as Justice Kennedy said during the oral arguments on the constitutionality of the law said, “….fundamentally changes the relationship between the federal government and the citizen.”
7. Excise Tax on Comprehensive Health Insurance Plans
The seventh new tax that directly impacts the middle class, along with all citizens, is the Excise Tax on Comprehensive Health Insurance Plans or the “Cadillac” Health Insurance Plan Tax. These are plans that provide extensive coverage and that are generally fully paid for, or largely paid for, by employers. This provision imposes a 40% excise tax on the employer-paid premium on taxpayers who are covered by such plans, beginning in 2018. The reason it begins in 2018 is because most unionized workers are covered by plans that fall under this definition and a deferral was made to spare union members from this tax for at least a period of time.
There are thirteen other taxes that apply to businesses and that apply to high income (over $250,000 per year) households. While these additional provisions will not impact the middle class directly, they can have serious indirect consequences for middle and low income earners. Beginning in 2014, the Employer Mandate Tax will impose an annual non-deductible tax on employers with more than 50 employees who do not provide health insurance for their employees.” (1)
(1) Middle Class Tax Breakout – http://www.breitbart.com/Big-Government/2012/06/29/Seven-new-taxes
(2) Full list of ACA Taxes – http://atr.org/full-list-obamacare-tax-hikes-listed-a7010”
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