Posted on 12/22/2012 4:59:44 AM PST by Kaslin
In the standoff over the fiscal cliff, all the discussion has been about the Bush tax cuts. There has been no discussion about the ObamaCare tax increases. That's a mistake.
Five of the tax increases Americans will face on January 1 are new taxes created under the Affordable Care Act (ObamaCare). And they are not just for the very rich. Three of the five will hit people who are solidly middle class.
The new ObamaCare taxes will hit everything from dividends and capital gains to day care and services for special needs children. They will increase the tax bill for those who have extraordinary medical expenses ? at the very time when they can least afford to pay higher taxes. They will hike the tax burden for the chronically ill who have several thousand dollars of out-of-pocket prescription drug expenses every year. The taxes will fall on medical devices ranging from pacemakers and artificial hips to bedpans and stents.
All told, these new taxes will create a burden in excess of $250 billion over the next 10 years.
The case for delaying these taxes is strong. Clearly they will depress economic activity and slow the recovery. But there is also another reason: we don’t need the money. The new ObamaCare taxes are supposed to provide the revenue to furnish subsidized health insurance to millions of people who will begin buying it in health insurance exchanges in January 2014. But the subsidies won't be needed if the insurance is not available and it won't be if the exchanges are not up and running at that time.
Here is my prediction: aside from two states that already have exchanges (Massachusetts and Utah), only one other state (Maryland) will make the deadline. Maybe Colorado will make it if they are lucky. But that's it. No other state is going to have operational exchanges on time.
In fact, half the states aren't even planning to set up exchanges. That responsibility will then fall to the federal government. But no money has been budgeted to fund such a large federal operation. The full implementation of ObamaCare could actually take years. In the meantime, let taxpayers keep more of their income to meet their own needs.
Clearly, the White House doesn't want to talk about any of this. When President Obama says he wants to protect middle income families from January tax hikes, he's not talking about the ObamaCare taxes. But what's wrong with the Republicans? They have allowed Democrats and the mainstream media to pull off a gigantic bait and switch. Everyone is talking about tax rates for the rich. No one is talking about the middle class tax burden needed to fund health reform.
Here is a brief summary of the taxes that will kick in next month, courtesy of Americans for Tax Reform.
Medical device tax: $20 billion. This 2.3% tax on gross sales could amount to a very large percent of after tax profit ? thus encouraging an industry that is providing very good domestic jobs to relocate overseas. Meanwhile, the burden of the tax will be reflected in higher prices for anyone who needs an artificial knee or hip or a pacemaker.
Flexible Spending Account (FSA) limits: $13 billion. Roughly 35 million Americans use FSA accounts to pay medical expenses not paid by the employer's health insurance with pre-tax dollars. These accounts are especially important to chronic patients with substantial out-of-pocket drug expenses. FSAs can also be used to pay for day care and services for special needs children. Currently, there is no legal limit on how much an employee can deposit in the account, but many employers cap the annual contribution at $5,000. After January 1, however, contributions will be limited to $2,500 ? effectively cutting the tax advantage in half.
Surtax on investment income: $123 billion. Democrats often say they merely want to return to Clinton era tax rates for the highest-income taxpayers. They conveniently omit the fact that ObamaCare adds 3.8 percentage points to those rates ? bringing the highest marginal tax rate up to 43.4% for individuals making more than $200,000 and couples earning above $250,000. Add on a 13% state tax in California, and some taxpayers will be paying more than half of all they earn to the government. The new tax hits dividends, capital gains and other investment income.
Limits on itemized medical expense deductions: $15.2 billion. Currently, people can deduct medical expenses in excess of 7.5% of income if they itemize. Next year, that threshold will rise to 10%. This means a higher tax burden for those who have the misfortune to have large medical bills. It is literally a tax on the sick.
Higher payroll tax: $86.8 billion. The Medicare payroll tax is currently 2.9% on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 for a couple) will face a 3.8% rate instead. This is a direct tax hike for small business owners, who are liable for self-employment taxes in most cases.
Democrats are cruel masters. A rebellion is in order.
Not to mention the AMT fix, the Medicare Doc fix, and the Payroll Tax holiday. The House GOP only voted against defense cuts as a useless stall tactic on Thursday.
The House GOP is only tackling the Bush tax cuts. This is the most politically difficult portion of the “cliff” to address. Why that?
Obama is a spendaholic.
Republicans should have just made the Bush era tax cuts for EVERYONE permanent.
Then let Obama raise taxes.
Face it folks; no politician in either party thinks we can ever balance the budget again. If they did they would not be engaged in bitter battles about how to shave a mere $200 Billion off a deficit that totals $1002 Billion. What about the fiscal cliff which both sides fear like it was Armageddon? It only reduces the red ink by $464 Billion leaving a hole of more than half a Trillion dollars. If cutting spending and increasing revenues enough to reduce the deficit to $538 Billion will crash the economy and send us all to financial ruin how in the hell can we ever get it to zero?
A monkey with a dart board could do a better job of balancing the budget. Ansd he’d work for bananas.
Instead, we pay a bunch of ignoramuses $174,000 a year plus ridiculous benefits. These people would be in jail in real life were it not for their ability to lie, cheat and steal votes.
A monkey with a dart board could do a better job of balancing the budget. And he’d work for bananas.
Instead, we pay a bunch of ignoramuses $174,000 a year plus ridiculous benefits. These people would be in jail in real life were it not for their ability to lie, cheat and steal votes.
The sheep don’t read past the buzzword du jour coming from the white hut and the media.
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