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Sunday, 13 October 2013

Obamacare tax increases add up to around $100bn a year

Posted on 08:49 by Unknown

  • +.9% Increase in Medicare Tax Rate  
  • New Annual Fee on health insurance providers = $60 billion (For calculation - Sec 9010 (b) of the PPACA.)[1]
  • 40% New Tax on health insurance policies which cost more than $10,200 for an individual or $27,500 for a family, per year = $32 billion (inland tax as opposed to an importation tax)
  • New Annual Fee on manufacturers and importers of branded drugs = $27 billion (For calculation - Sec 9008 (b) of the PPACA)[2]
  • 2.3% New Tax on manufacturers and importers of certain medical devices = $20 billion
  • +2.5% Increase (7.5% to 10%) in the Adjusted Gross Income floor on medical expenses deduction = $15.2 billion
  • Limit annual contributions to $2,500 on flexible spending arrangements in cafeteria plans (plans that allow employees to choose between different types of benefits) = $13 billion
  • All other revenue sources = $14.9 billion
  • 10% New Tax imposed on each individual for whom “indoor tanning services” are performed.

Total $178bn - but the source of this article has probably over stated the revenue on these items, so the total tax increase take is likely to be nearer $100bn a year as other articles have stated.

The tax take from a 0.9% increase in Medicare Tax is unknown and is on top of the $100bn.

And the tax increase that GOP leaders are probably most concerned about in order to protect the top 0.1%.
A 3.8% New Tax on investment income above $200,000 for individuals and $250,000 for married couples.
How many people earn more than $200,000 a year just from investment income? Very few.
The tax take from this is likely to be relatively small - large amounts of investment income will be hidden in trust funds or offshore to avoid the new tax.

Investment income Includes:
gross income from interest, dividends, royalties, rents, and net capital gains. Investment income does not include interest on tax-exempt bonds, veterans’ benefits, excluded gain from the sale of a principle residence, distributions from retirement plans, or amounts subject to self-employment taxes. 
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