Jake, How many of us have an (AGI) adjusted gross income (income after deductions) of more than $200,000 ($250,000 for joint-filers).
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.
It is interesting to me how many of my small business acquaintances the last four weeks of the year buy new cars, trucks, etc. to increased their deductions in order to reduce their adjusted gross income for the year. This is true whether the individual is a farmer or small or large corporation. Even some of the farmer receive welfare subsidies (crop land set aside, tax credits, etc.) To me these approaches which work the tax system to the individuals advantage is no different than individuals who work the system by having excess children to receive government subsidies.
- 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)
How many of us will be impacted from the capital gains taxes from the highs we earned in the late 90's when compared against our losses?
- 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)
Again this will be AGI (Adjusted Gross Income), and not impact many of us.
- 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)
I have no problem with this since my wife and I have great supplement healthcare policies
- 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)
No problem. But, what will we receive for preexisting condition clauses, and other benefits under the ACA. The gains exceed the loss.
- 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)
No problem. This will force individuals into the government exchange programs.
- A tax of 10% on indoor tanning services. This has been in place for two years, since the summer of 2010. ( ATR.org)
This should not have be a deduction in the first place.
- 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)
Should we have Cadillac Health Care Plans at all? If individuals want the Cadillac Plans they should pay extra.
- 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)
Many State Employees had a State Cafeteria Plan which enable individuals to us pre-tax dollars to pay for some medical expense. Yes, I bargained such plans of union members. But, it made less money available for the State revenue.
- 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.)
Pain avoidance (penalties) is a way to motive individuals to get with the program - it works!!!
- 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)
This method will deter medical device manufacturers from scamming the medical system where medical heads (profit and non-for-profit) doctors, etc. can continue ordering un-nessary equipment, test, and procedures.
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