The Obamacare Taxes and Taxmageddon--Get to know what is coming...
Friday, August 3, 2012 at 02:36PM Obamacare imposes 18 new taxes that total $502 billion in the first 10 years. In later years, the cost dramatically increases to about $1.7 trillion per decade (triple the amount for the first decade).
7.07.12 INTRODUCTION
On 6.28.12, the Supreme Court ruled that Obamacare is a tax! The ruling was a huge disappointment but it clarified this one point.
In his signature health care legislation, Obama broke his promise not to raise taxes on the middle class.
Obamacare imposes 18 new taxes that total $502 billion in the first 10 years. In later years, the cost dramatically increases to about $1.7 trillion per decade (triple the amount for the first decade).
The Obamacare tax increases will have a chilling effect on our economy as the measure slows economic growth and destroys jobs. The higher tax rates in Obamacare decrease the incentives for individuals to work and save more.
Obama’s health care plan will soak the top-earning households in America – those earning more than $200,000 as single filers or $250,000 as married couples.
Our economy is sick and Obamacare is exacerbating the problem. Unemployment is high and economic growth is low. Businesses will not hire more workers in this uncertain economic environment. About 52% of likely voters favor repeal of Obamacare.
Obama's Broken Promises
Barack Obama repeatedly promised not to raise taxes on middle-class families. On Thursday, 6.28.12, the Supreme Court ruled that Obamacare is a tax! This means that Obama has already raised taxes.
Chief Justice John Roberts upheld Obama's health care law on the grounds that the “individual mandate” is a constitutionally permissible tax increase.
Obamacare imposes new taxes on our country; this violates Obama’s pledge. Middle-class families will pay the vast majority of these new taxes.
The Supreme Court’s interpretation puts Obama in a peculiar situation. In 2008, he promised not to raise taxes on the middle class and accused Republican nominee John McCain of wanting to tax health benefits. Presidential candidate Obama proclaimed:
And I can make a firm pledge: under my plan, no family making less than $250,000 will see their taxes increase…not any of your taxes. My opponent can’t make that pledge.… [H]e wants to tax your health benefits.
http://www.presidency.ucsb.edu/ws/index.php?pid=78612#ixzz1z6VUF5Uo
Throughout his presidential campaign, then-candidate Barack Obama promised the American people: “If you’re a family that’s making $250,000 a year or less, you will see no increase in your taxes.” After he became president, Barack Obama reiterated that pledge, even on national television.
Obama repeatedly insisted that Obamacare was not a tax but the Supreme Court is saying the exact opposite. What does this tell all of us about Obama’s integrity?
Obama grossly mischaracterized his health care plan, and now American citizens will pay the price. He has both attacked individual freedom and burdened millions in the middle class.
Now that the Supreme Court has deemed Obama's health care law a "tax," some people have suggested that we call Obamacare by a new name -- "ObamaTax." Is that label justified?
Obamacare Imposes 18 New Taxes
Obamacare (The Patient Protection and Affordable Care Act or PPACA) imposes numerous tax hikes that transfer more than $500 billion over 10 years from hard-working American families and businesses to Congress.
Obamacare contains 18 separate tax increases that will cost taxpayers $502 billion between 2010 and 2019. The 18 Obamacare tax increases are as follows:
[The revenue raised during the 2010-2019 period is in brackets.]
1. Increase Medicare Hospital Insurance payroll tax from 2.9 % to 3.8 % for couples earning more than $250,000 a year ($200,000 for single filers). [$210 billion]
2. Apply 3.8 % Hospital Insurance tax to investment income for couples earning more than $250,000 ($200,000 for single). [Amount included under #1]
3. Impose mandate to buy health insurance (individuals and employers). [$65 billion]
4. Impose an annual fee on health insurance providers. [$60 billion]
5. Apply a 40 % excise tax on "Cadillac" health insurance plans. [$32 billion]
6. Impose an annual fee on branded drugs. [$27 billion]
7. Exclude unprocessed fuels from cellulosic biofuel producer credit. [$24 billion]
8. Impose 2.3 % excise tax on certain medical devices. [$20 billion]
9. Increase corporate taxes through stricter enforcement on business activities. [$17 billion]
10. Raise the floor on medical expense deduction from 7.5 % to 10.0 %. [$15 billion]
11. Limit Flexible Spending Accounts (FSAs) to $2,500. [$13 billion]
12. Reduce number of medical products purchased from FSAs and Health Savings Accounts (HSAs). [$5 billion]
13. Eliminate corporate deduction for prescription expenses for retirees. [$4.5 billion]
14. Increase corporate taxes through changes in tax liability. [$4.5 billion]
15. Impose 10 % excise tax on indoor tanning services. [$2.7 billion]
16. Increase penalty to 20 % for purchasing disallowed products with HSAs. [$1.4 billion]
17. Increase taxes on health insurance companies. [$0.6 billion]
18. Repeal special deduction for Blue Cross / Blue Shield organizations. [$0.4 billion]
Total Revenue Raised = $502 billion
From the above list, you can see that five major tax hikes make up almost 75 % of the new revenue raised by Obamacare. The tax increases for Medicare Hospital Insurance (on payroll taxes and investment income) will raise $210 billion. The mandate to buy health insurance will raise $65 billion; the annual fee on health insurance providers will raise $60 billion; and the excise tax on "Cadillac" health insurance plans will raise $32 billion. Together, these five taxes will raise $367 billion (73 % of the $502 billion total).
Government bureaucrats use the term "revenue raised" but we know that "ObamaTax" is imposing huge tax increases on hard-working American families and businesses.
Obamacare Taxes Will Increase Dramatically in Future
When Obamacare first passed, the Joint Committee on Taxation estimated that its tax hikes would total $502 billion over the next 10 years. However, most of the new, higher taxes do not kick in until later in the decade, which means that once all of the law is fully implemented, the taxpayers’ tab will be much bigger than originally estimated.
A 4.18.12 Heritage Foundation article provides a more accurate cost for Obamacare.
A new study by the Joint Economic Committee (JEC) revealed today that Obamacare will impose higher taxes totaling $4 trillion between now and 2035, with substantial hits on working Americans. That works out to more than $1.7 trillion over a decade—more than triple the original 10-year score.
Impact of Obamacare Tax Increases
These tax increases will have negative economic effects because they transfer resources from the private sector to government. A 3.25.12 Heritage Foundation article by Curtis Dubay provided this observation:
"As a result, the tax hikes in [the Patient Protection and Affordable Care Act] will slow economic growth, reduce employment, and suppress wages. These economy-slowing policies could not come at a worse time. PPACA tax increases will impede an already staggering recovery,” Dubay wrote in an analysis of the Obamacare taxes.
Mr. Dubay made these insightful comments about Obamacare's impact:
1. The Obamacare tax hikes will slow economic growth, reduce employment, and suppress wages. These economy-slowing policies could not come at a worse time. PPACA tax increases will impede an already staggering recovery.
2. Obamacare will slow economic growth and destroy jobs. The Obamacare taxes transfer money from productive private hands to the less efficient public sector. Unlike government, the private sector allocates resources where they will contribute the most to economic growth.
3. Obamacare will discourage work and savings. Higher tax rates decrease the incentives for individuals to work and save more, both of which are essential for economic growth. Additionally, high tax rates discourage individuals from working harder and saving larger portions of what they earn.
4. Obamacare will not reduce deficits. Higher taxes never close budget deficits because, in the short run, Congress will spend all of the extra revenue it receives from higher taxes. The only way to close deficits is to cut spending and align it with revenue (i.e., a balanced budget).
The economic damage from these tax hikes is one of many reasons Congress needs to repeal Obamacare and start from scratch to properly reform the health care system.
One of Barack Obama's biggest weaknesses is Obamacare! Most voters want to repeal Obama's signature healthcare law. According to the latest Rasmussen poll (7.02.12 report), 52% of likely U.S. voters favor repeal of Obamacare.
http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law
Obama Soaks the Job Creators
Obama’s plan is straightforward – soak the top-earning households in America – those earning more than $200,000 as single filers or $250,000 as married couples. According to IRS data, that “tiny, wealthy minority” encompasses more than 4.3 million households! When you count spouses, children, and other dependents, you are talking about 12.5 million Americans!
Also many of the small businesses fall into this $200,000 - $250,000 category. Roughly two thirds of small businesses are taxed at this rate. We know that small businesses create the majority of jobs in America, yet they are being targeted for tax increases.
Small business owners may fall into this $200,000 to $250,000 category, but they are far from "rich." Quite often, they are hard-working entrepreneurs who work 60 hours or more per week to run their businesses and provide for their families and employees. It is our overly complicated Tax Code that places them in the "rich" category.
Raising taxes during a recession has never been viewed as a sensible policy. The economy is stuck in neutral, and we need to put it in gear. A tax increase at this time would have a very chilling effect on the economy.
Tax relief across the full breadth of income levels is the needed approach; and along with that, our country must cut the spending.
Our Economy Is Sick
Unemployment has been persistently high and economic growth is quite weak. The Bureau of Labor Statistics (BLS) issued the latest unemployment figures on 7.06.12 in its Employment Situation Summary. The report shows that the June unemployment rate remains unchanged at 8.2 % (12.749 million people). This means that unemployment has stayed above 8 % for Obama's full time in office (41 months).
http://www.bls.gov/news.release/empsit.nr0.htm
The number of long-term unemployed (those jobless for 27 weeks and over) was essentially unchanged at 5.4 million; those individuals accounted for about 42 % of the unemployed. Only 80,000 new jobs were created during June. Because it takes about 150,000 new jobs per month just to keep up with population growth, unemployment will remain high.
If you want to know how the economy is doing, you need to ask the 12.7 million unemployed or the 5.4 million long-term unemployed persons. You might also ask the 8.2 million workers who are working part time for economic reasons.
When Obama rammed through the $787 billion Stimulus measure two weeks after taking office in January 2009, he promised that unemployment would not go above 8 %. This is one more broken promise.
Our economy is not growing and the economic recovery is stuck in neutral. According to the 6.28.12 report from the Bureau of Economic Analysis (BEA), the Real Gross Domestic Product (GDP) grew at an annual rate of 1.9 % in the first quarter of 2012. A GDP growth rate of 1.9% is quite anemic! It takes a much higher GDP expansion rate to bring new jobs and a better economy. Gross Domestic Income (GDI) increased 3.1 % in the first quarter. Our economy is sick!
http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp1q12_3rd.pdf
Obamacare has frozen business hiring across America as businesses wait to see how the law will be applied. Obamacare encapsulates the kinds of harmful regulatory policies the Obama Administration has favored at the expense of economic growth. Higher tax rates on working and investing will discourage economic growth both now and in the future.
IRS Enforcement of Obamacare
Even before the Supreme Court issued its ruling, the Obama administration was hard at work to ensure that the health care law was enforced. According to a 4.09.12 article in The Hill:
The Obama administration is quietly diverting roughly $500 million to the IRS to help implement the president’s healthcare law.
The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process. The tax agency is responsible for several key provisions of the new law, including the unpopular individual mandate.
How will the IRS spend the money? In addition to enforcing the individual mandate, the IRS is responsible for collecting new taxes and fees. The Hill reports that the agency wants to hire 300 new employees next year, and it requested funding for another 537 new employees to administer Obamacare’s new subsidies for low- and middle-income individuals to purchase insurance.
CONCLUSION
Throughout his presidential campaign, candidate Barack Obama promised the American people: “If you’re a family that’s making $250,000 a year or less, you will see no increase in your taxes.” After he became president, Barack Obama reiterated that pledge, but he broke this promise under his signature health care bill.
In case there was any doubt, the Supreme Court ruled that Obamacare is a tax! Chief Justice John Roberts upheld Obama's health care law on the grounds that the “individual mandate” is a constitutionally permissible tax increase.
Obamacare contains 18 separate tax increases that will cost taxpayers $502 billion between 2010 and 2019. In later years, the cost dramatically increases to about $1.7 trillion per decade (triple the amount for the first decade).
Five major tax hikes make up almost 75 % of the new revenue raised by Obamacare. The two largest tax increases in Obamacare (Medicare Hospital Insurance and taxes on investment income) account for $210 billion; this is 42 % of the $502 billion total.
Obamacare is a huge liability for Barack Obama. According to a recent poll, 52% of likely U.S. voters favor repeal of Obamacare.
Obamacare is already having a very negative impact on the economy. Unemployment is high and the economy is not growing. The latest figures show that the unemployment rate remains stuck at 8.2 % and the Gross Domestic Product (GDP) is expanding at an anemic 1.9 % growth rate. Our economy is sick!
What is Obama's answer for this lousy performance? The Obama administration is funneling $500 million into the Internal Revenue Service and hiring more IRS agents to enforce the Obamacare nightmare!
The solutions are obvious: We must ensure the full repeal of Obamacare; we must retire Barack Obama; and we must replace many of the Democrat Congressmen and Senators with conservative Republicans. The November election is extremely important!
Bio for Henry W. Burke
Henry Burke is a Civil Engineer with a B.S.C.E. and M.S.C.E. He has been a Registered Professional Engineer (P.E.) for 37 years and has worked as a Civil Engineer in construction for over 40 years.
Mr. Burke had a successful 27-year career with a large construction contractor.
Henry Burke serves as a full-time volunteer to oversee various construction projects. He has written numerous articles on education, engineering, construction, politics, taxes, and the economy.
Henry W. Burke