Friday, June 29, 2012

ObamaCare Taxes on The Poor & Middle Class Stands

Instead of striking down ObamaCare on the basis that the Individual Mandate was an unconstitutional expansion of the Commerce Clause by forcing people to buy something they didn't want, the United States Supreme Court validated the Individual Mandate as a tax; and, the imposition of taxes is a constitutional right of Congress.   So, in effect, the U.S. Supreme Court just validated a whole host of new taxes that will be imposed on all Americans -- rich or poor -- under the guise of ObamaCare.

First of all, every individual who refuses to buy health insurance will be taxed $695 a year by 2016; phased in from $95 in 2014.  Families without insurance in 2016 will pay a $2085 penalty; not to exceed 2.5% of gross income.  Employers with 50 or more employees who are not providing health insurance will be assessed a tax of $2000 per employee with the first 30 getting a pass.  So, for a company with 49 employees, the choice is (1) don't hire another worker or (2) only hire temps from that point forward.  Employers with 200 employees or more cannot opt out of providing health care insurance; they are mandated to provide it under the law.

As of 2013, individuals making $200,000 per year and families making $250,000 a year will be assessed an additional 0.9% on their normal Medicare payroll tax. People and families in this same income bracket will be hit with a 3.8% surtax on investment incomes. But, prior to that surtax, the capital gains tax and dividends for all individuals will be raised from 15% to 20% in 2013.

For the last two years, there has been a 10% tanning tax and that will remain under this week's court ruling.  On January 1, 2013, a medical device tax of 2.3% will be applied to any device costing over $100.  This will effect the cost of manual and motorized wheel chairs; artificial hips; stents used in heart patients; defibrillators; and whole host of other products.  In effect this 2.3% tax will just be added to the cost of almost every device you can find in a hospital.  And, that cost will only wind up being passed onto all of us in the form of higher insurance rates.

If you have, what Congress defines as a "Cadillac" health plan -- a plan costing more than $8500 per individual or $23,000 per family -- you will be assessed a 40% surtax on that plan.  So, in effect, an individual with an $8500 a year plan will see that cost rise to 11,900 or, at least $32,200 a year for a "Cadillac" family.  Now, while it is true that most of those Cadillac plans involve the wealthy, some middle class families that include someone who is seriously ill, have chosen Cadillac plans because the cost under normal insurance would be a lot higher.  Also, like a lot of what Congress does, there's no automatic annual cost of living increases on the definition of what is a Cadillac plan; meaning that, eventually, normal plans will become Cadillac plans without a Congressional "fix" every year.

ObamaCare also imposes a sales tax (called the Premium Tax) on all health insurers to pay for the new health insurance exchanges.  In doing so, it is estimated that premiums for the average family will go up by 1.9% in 2013 and 2.4% in 2014..  Eventually, the tax could add as much 3.6% to the average annual cost of health care insurance; driving up the 10-year costs by $5,000.

Lastly, ObamaCare greatly expands Medicaid.  About 57% of the cost of Medicaid is picked up by the federal government.  The balance is paid for by state programs (basically, some form of taxes).  The expansion of these programs will only force many cash-strapped states to raise taxes on its citizens to pay the increased cost of Medicaid.

All these taxes, all over the place, were imposed intentionally by the Democrats so that no voter could specifically look at one tax for ObamaCare as being targeted  to them. Instead, they might see their health insurance premiums go up over here and dividend taxes going up over there; making it difficult to connect the dots and blame ObamaCare for the two tax increases.

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