Obamacare Tax Hike Hitting on Jan. 1
Posted in the London Forum
#1 Dec 29, 2012
On January 1, regardless of the outcome of fiscal cliff negotiations, Americans will be hit with a $1 trillion Obamacare tax hike.
Obamacare contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1. In total, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.
The five major Obamacare taxes taking effect on January 1 are as follows:
The Obamacare Medical Device Tax: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care making everything from pacemakers to artificial hips more expensive.
The Obamacare Flex Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their familys basic medical needs will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the next ten years.(Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C.(National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.
The Obamacare Surtax on Investment Income: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:
The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.
The Obamacare Haircut for Medical Itemized Deductions: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.
The Obamacare Medicare Payroll Tax Hike: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:
#2 Dec 29, 2012
Firstly, Obamacare will not be fully implemented until 2014 in it's entirety.
Second - the Medical Device Industry. It appears you are worried more about it than they. First off, manufacturing in the USA of medical devices is concentrated largely in about 9 States housing technological advancement. Now stay with me here. ALL 9 of those concentrated states went with Obama in the Presidential election, being fully aware of Obamacare. The Medical Device industry is very optimistic due to their new product launches, and, the emerging markets of both Brazil and China.
FSA- Flexible Spending Account - HSA
Factually, these accounts are not as widely used by the average Joe at all. They are an asset to the employer to the benefit their contributions avoid them having to pay payroll taxes on the contribution. The downside to the employer is that they are usually funded, from the employers side, the beginning of the year and if that person becomes ill and uses all those benefits in the beginning of the year and later is fired, the employee doesn't have to payback the benefit. Employers who provide any contributions to these plans obviously have the benefits outweigh their risks. As for the little people, basically, an employer barely pays them enough to pay their bills, let alone contribute to an FSA. If anyone is hurt by this, it won't be the little people, trust me. Families who pay $14,000/yr. for a special needs child, again, isn't your "little families". I thought conservatives didn't like entitlements?
You're abit mixed up talking about dividends. Short term dividends have always been taxed at ordinary income tax rates if they aren't offset by losses. Long term dividends are taxed at capital gain rates and if the highest rate for qualified dividends goes to 20% and you add the 3,8% surtax, you're at 23.6% while in fact they were taxes higher under Republican President Ronald Reagan. Capital gain (qualified dividends) were taxed at a flat 28% for many years. Obama is just recapturing a portion.
Medical Floor for Medical Deductions - When Reagan took office, the floor was 3%. Reagan raised it
4 1/2% to the 7.5% you are noting. Stay with me here. That's a 4.5% increase. If Obama takes it from 7.5% to 10%, my Kmart calculator tells me that's a 2.5% increase only comparied to Reagan's 4.5%. So, what you are stating is. It was OK for Reagan to increase it by 4.5%, yet not ok for Obama's 2.5%? Am I correct about that?
Medicare tax - currently it is 1.45% for employee; 1.45% employer matching, the 1.45% employer matching being a deduction to the company which could bring their matching in reality down to .50% or less. A "marginal" income tax hike means...stay with me here, jack squat. It's not over until the fat lady sings and it's "taxable income" we concentrate on...NOT marginal by no means. Furthermore, if a "self employed" person profits that much money and prefer not to incorporated, well, let's put that under the letter "S" for ......stupid.
Is there anything else I can assist you with tonight? My turf might not be the best place for you.
#3 Dec 30, 2012
...and where's "truth" when you need him/her? lol
#4 Dec 30, 2012
I thought you were gone.What happened? Needed your fix to degrade your (so you Say)hometown people?
#5 Dec 30, 2012
It don't matter who is trying to run this country, they will be judged for something.
#6 Dec 30, 2012
That's true, Old Man Very true because it will never be possible to satisfy millions of people, but I do believe Obama has taken more criticism than about any President in American history. The real danger lies directly within the conservative party. They are truly the ones seeking slave labor and control.
And now these wanna-be cowboys want to run Piers Morgan out of the country for wanting a safer country. He said rather than petitioners wanting to deport him. the way this country is going with continuing to ignore carnages, he might just decide to deport himself. Can't say as I blame him for wanting to protect his child.
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