The trillion dollar ObamaCare program gets funded roughly half through MediCare cuts — mostly elimination of Medicare Advantage — and half from tax hikes, including …
- A .9% increase in Medicare payroll taxes on couples with income of more than $250,000 a year.
- Extension of Medicare payroll taxes (3.8%) to unearned income: dividends, interest, and capital gains.
- A 10% excise tax on customers of indoor tanning salons.
- Additional fees on insurance companies, pharmaceutical companies and medical device manufacturers, including $33 billion over ten years on fees on drug makers
- A tax on individuals without qualifying coverage, maximum penalty set at 2.5% of income
- An excise tax on high-premium insurance plans, equal to 40% of premiums paid on plans costing more than $27,500 annually for a family, starting in 2018
http://online.wsj.com/public/resources/documents/st_healthcareproposals_20090912.html
* * * * *
Ken’s Qs:
1) Since I’ve been TurboTaxing my 2009 taxes, I’m curious: Is the magic $200,000 / $250,000 Gross Income, Adjusted Gross Income, or Taxable Income ? That makes a big difference, and I haven’t seen a single reference clarifying it. Anybody know ?
2) If some body hits the $200,000 / $250,000 kill point, is is all income taxed at the higher rate, or just marginal income above that rate ? Anybody know ?
3) How can a serious piece of legislation single out tanning salons for extinction — and let the Beverly Hills facelift doctors run free ? (Rhetorical question)
4) I’m still eager to see the 15,000 new IRS agents running around repo’ing big screens from folks who don’t have health insurance ?
5) If the reconciliation bill doesn’t get thru the Senate — does Obama’s deal with the unions — giving them a pass on the Cadillac plans — vaporize ?
This is going to get very interesting as folks understand the implications …
The Homa Files 
March 22, 2010 at 10:14 am |
The next “ten days” are critical since the ratified bill must be signed as stated in the Constitution Article 1, Section 7 states:
“If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.”
I’m not sure the Senate will move through the recon package and get realigned with the House by next Thursday. This would force the President into signing the bill with no assurance that an amended bill will follow. There is a very real possibility that the Senate bill that “nobody [wanted] to vote on” will be Pres. Obama’s crowning achievement.
March 22, 2010 at 10:41 am |
A couple of points:
#1: I believe another way they are paying for the bill is to lower the contribution limits on Health Savings Accounts associated with High Deductible Health Plans. This affects me personally, as I’m already maxing out my HSA, and also hoses the millions of Americans whose employers switched to HDHP’s in recent years. Those people are stuck paying after-tax dollars for their own health care…
#2: My understanding is that it is just marginal income that is taxed above the $200/$250k threshold. I also read somewhere it is the LOWER of marginal income above that rate, or unearned income. If this is the case, someone with little to no unearned income (but high earned income) could effectively avoid paying it?…
#3: Since this is effectively raising the long-term capital gains tax, I bet you’re going to see a rush of people selling investments, then repurchasing after 30 days (to avoid the wash rule) to raise their cost basis before this is signed into law. Should be a nice little short-term bump in tax revenue for the government.