think Obamacare was free
ObamaCare was ruled constitutional Thursday, June 28,
2012. And yes, it’s still difficult to let that fact settle in. But today is the
4th of July. Today is our
Independence Day. As you celebrate, remember exactly what Americans all over the
country are fighting for.
Thomas Jefferson. Samuel Adams. Benjamin Franklin.
John Hancock. These brave Americans had the sheer audacity to declare their
independence from King George III. Facing isolation and probable death, they
went forward with their plan to declare that they would be their own masters,
rather than a single man in a distant capital.
They are rolling over in their graves now and are mad
as Hell at “We the People” for letting this happen. Because 236 years ago, these
Patriots declared that a long train of abuses committed against them would not
be tolerated and would not happen again.
Obamacare is now official, which means that a lot more
people in the
United States will
have health insurance. Sadly, it also means a lot more people will be paying
(You didn't think Obamacare was free, did you?)
Here are some of the new taxes you're going to have to
pay to pay for Obamacare:
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. Taxes on dividends will rise from 15% to 18.8%--if
Congress extends the Bush tax cuts. If Congress does not extend the Bush tax
cuts, taxes on dividends will rise from 15% to a shocking 43.8%. (WSJ)
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%. (WSJ)
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. (ATR.org)
The itemized-deduction hurdle for medical expenses is going up to
$10,000. Right now, any medical expenses over $7,500 per year are
deductible. Next year, that hurdle will be $10,000. (ATR.org)
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. (ATR.org)
A tax of 10% on indoor tanning services. This has been in place for
two years, since the summer of 2010. (ATR.org)
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. (ATR.org)
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. (ATR.org)
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
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. (Breitbart.com)
So those are some of the new taxes you'll be paying
that will help pay for Obamacare.
Any big ones I've missed?
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.
Here's How Much The Obamacare Penalty Tax Will Cost
Many Americans are furious that Obamacare will require
them to buy health insurance.
Most of these folks seem to hate the idea that Obama
is forcing them to do something more than they hate the idea of shelling out
But for those who also care about the money, here are
The good news is that, for most people, the "penalty
tax" for those who choose not to buy health insurance will cost a lot less than
As with everything tax-related, there's no simple
answer to "How much is the Obamacare penalty tax?" But here are some key points,
The penalty/tax will be phased in from 2014 to 2016.
The minimum penalty/tax in 2016 will be $695 per person and up to
3-times that per family. After 2016, these amounts will increase at the rate
The minimum penalty/tax per person will start at $95 in 2014 (and
then increase through 2016)
No family will ever pay more than 3X the per-person penalty,
regardless of how many people are in the family.
The $695 per-person penalty is only for those who make between
$9,500 and ~$37,000 per year. If you make less than ~$9.500, you're exempt.
If you make more than ~$37,000, your penalty is calculated by the following
The penalty is 2.5% of any household income above the level at which
you are required to file a tax return. That level is currently $9,500 per
person and $19,000 per couple. The penalty on any income above that is 2.5%.
So the penalty can get expensive quickly if you make a lot of money.
However, the penalty can never be more than the cost of a "Bronze"
heath insurance plan purchased through one of the state "exchanges" that
will be created as part of Obamacare. The CBO estimates that these policies
will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016,
with the costs rising thereafter.
So, basically, you're looking at penalties of
approximately the following at the following income levels:
Less than $9,500 income = $0
$9,500 - $37,000 income = $695
$50,000 income = $1,000
$75,000 income = $1,600
$100,000 income = $2,250
$125,000 income = $2,900
$150,000 income = $3,500
$175,000 income = $4,100
$200,000 income = $4,700
Over $200,000 = The cost of a "bronze" health-insurance plan
The IRS will collect the penalty-tax, a fact that will
no doubt further enrage those who hate Obamacare.
But here's some more good news for those folks:
The IRS will not have the power to charge you
criminally or seize your assets if you refuse to pay. The IRS will only have the
ability to sue you. And the most the IRS can collect from you if it wins the
suit is 2X the amount you owe. So if you want to thumb your nose at the
penalty-tax, the IRS won't be able to do as much to you as they could if you
refused to pay, say, income tax.
By the way, the following folks will be exempt from
Those who make less than $9,500
Employees whose employers only offer plans that cost more than 8% of
the employee's income
Those with "hardships"
Members of Indian tribes
Members of certain religions that don't pay Social Security tax,
such as Amish, Hutterites or Mennonites
"If You Don't Have Healthcare...You're Screwed"