Tuesday , 25 June 2024

Obamacare is Coming: Here Are Some of the NEW Taxes You’ll Be Paying for It (+2K Views)

Now that President Obama has been  re-elected, Obamacare will become reality and that means that a lot more people in the United States will have health  insurance and, if the program works as it is supposed to, it also means that the growth of  healthcare spending overall will eventually slow. Both of those are good but, in the near term, Obamacare also means a lot of people will be paying  more taxes and higher insurance premiums. (You didn’t think Obamacare was free, did you?) Below are some of the new taxes you’re going to have to pay to pay for  Obamacare. Words:  565

So says Henry Blodget (www.businessinsider.com) in edited excerpts from his original article* entitled Check Out All The New Taxes You’re Going To Pay To Pay For Obamacare.

 Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.

Blodget goes on to list some of the new taxes you’ll be paying that will help pay for  Obamacare:

  1. A 3.8% surtax on “investment income” when your adjusted gross income  is more than $200,000 ($250,000 for joint-filers). What is “investment  income?” Dividends, interest, rent, capital gains, annuities, house sales,  partnerships, etc. Thanks to the expiration of the Bush tax cuts, taxes on  dividends will rise rise from 15% to a shocking 43.8% on January 1st, unless  Congress cuts a deal with respect to the fiscal cliff. [Read: Fiscal Cliff Would See Dividend Tax Rate Almost TRIPLE for Wealthy]
  2. A 0.9% surtax on Medicare taxes for those making $200,000 or more  ($250,000 joint). You already pay Medicare tax of 1.45%, and your  employer pays another 1.45% for you (unless you’re self-employed, in which case  you pay the whole 2.9% yourself). Next year, your Medicare bill will be 2.35%.
  3. Flexible Spending Account contributions will be capped at  $2,500. Currently, there is no tax-related limit on how much you can  set aside pre-tax to pay for medical expenses. Next year, there will be. If you  have been socking away, say, $10,000 in your FSA to pay medical bills, you’ll  have to cut that to $2,500.
  4. The itemized-deduction hurdle for medical expenses is going up to  10% of adjusted gross income. Right now, any medical expenses over 7.5%  of AGI are deductible. Next year, that hurdle will be 10%.
  5. The penalty on non-medical withdrawals from Healthcare Savings  Accounts is now 20% instead of 10%. That’s twice the penalty that  applies to annuities, IRAs, and other tax-free vehicles.
  6. A tax of 10% on indoor tanning services. (This has been in  place for two years, since the summer of 2010.)
  7. A 40% tax on “Cadillac Health Care Plans” starting in  2018. Those whose employers pay for all or most of comprehensive  healthcare plans (costing $10,200 for an individual or $27,500 for families)  will have to pay a 40% tax on the amount their employer pays. The 2018 start  date is said to have been a gift to unions, which often have comprehensive  plans.
  8. A”Medicine Cabinet Tax” that eliminates the ability to pay for  over-the-counter medicines from a pre-tax Flexible Spending Account.  (This started in January 2011.)
  9. A “penalty” tax for those who don’t buy health insurance.  This will phase in from 2014-2016. It will range from $695 per person to about  $4,700 per person, depending on your income. (More  details here.)
  10. A tax on medical devices costing more than $100.   Starting in 2013, medical device manufacturers will have to pay a 2.3% excise  tax on medical equipment. This is expected to raise the cost of medical  procedures.

Note that these taxes are both “progressive” (aimed at rich people) and  “regressive” (aimed at the middle class and poor people). The big ones–the 3.8%  investment income hike and the Medicare tax increase–only hit you if you’re  making more than $200,000 a year. The rest hit you no matter how much you’re  making.

Any big ones I’ve missed?

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*http://www.businessinsider.com/here-are-the-new-obamacare-taxes-2012-7#ixzz2CVcacVpa (Visit www.businessinsider.com to get Business Insider Emails & Alerts)

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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3. Forget About the Fiscal Cliff! Increased Taxes & Austerity Measures Are Coming to the U.S. Regardless! Here’s Why

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It’s easy to find analysts and investors who are certain that a deal [to avoid the fiscal cliff] will be reached, or at least that the can will be kicked down the road to buy more time. It’s also easy to find more pessimistic views that are based on the lack of cooperation in the past, and a deeply polarized country and political system. However, I think many are missing the point, which is that austerity is coming to America – taxes are going up and government spending will be reduced – [and. as such,] the United States is likely to face a recession and market correction in 2013, regardless of whether or not a compromise is reached over the Fiscal Cliff. Words: 970

One comment

  1. I’m waiting for someone to create a chart showing what different income groups have to pay along with what percentage of their total income it is; my guess is it will be a very low amount for everyone. To all those still looking for work and or seniors on Social Security getting 1.7% COLA, those making over $200,000 per year are RICH, so a tiny extra tax should not be a big deal since they are earning (and deducting) big bucks.