Now that we really know “What’s in it”
Congressional Republicans have vowed that one of their first acts next year will be to send legislation repealing Obamacare to the desk of President-elect Donald Trump.
Doing so will not only repeal a failed law that has resulted in skyrocketing premiums, cancelled healthcare plans, and billions in new, wasteful spending, it will also provide a giant tax cut to middle class Americans.
Obamacare imposed roughly one trillion in higher taxes over ten years, including at least seven that directly hit middle class families. Repealing these taxes will provide much needed relief to the paychecks of families across the country.
Repealing Obamacare will also undo Barack Obama’s broken promise not to sign “any form of tax increase” on any American making less than $250,000.
Individual Mandate Non-Compliance Tax ($43.3 billion tax hike between 2016-2025)
Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services — must pay an income surtax to the IRS. In 2014, close to 7.5 million households paid this tax. Most make less than $250,000. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.
Starting this year, the tax was a minimum of $695 for individuals, while families of four had to pay a minimum of $2,085.
Households w/ 1 Adult
Households w/ 2 Adults
Households w/ 2 Adults & 2 children
A recent analysis by the Congressional Budget Office (CBO) found that repealing this tax would decrease spending by $311 billion over ten years.
Medicine Cabinet Tax on HSAs and FSAs ($6.7 billion tax hike between 2016-2025)
Since 2011 millions of Americans are no longer able to purchase over-the-counter medicines using pre-tax Flexible Spending Accounts or Health Savings Accounts dollars. Examples include cold, cough, and flu medicine, menstrual cramp relief medication, allergy medicines, and dozens of other common medicine cabinet health items. This tax costs FSA and HSA users $6.7 billion over ten years.
Flexible Spending Account Tax ($32 billion tax hike between 2016-2025)
The 30 – 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. This tax will hit Americans $32 billion over the next ten years.
Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap. Now, parents looking to sock away extra money to pay for braces find themselves quickly hitting this new cap, meaning they have to pony up some or all of the cost with after-tax dollars. Needless to say, this tax especially impacts middle class families.
There is one group of FSA owners for whom this new cap is particularly cruel and onerous: parents of special needs children. Families with special needs children often use FSAs to pay for special needs education. Tuition rates at special needs schools can run thousands of dollars per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax increase limits the options available to these families.
Chronic Care Tax ($35.7 billion tax hike between 2016-2025)
This income tax increase directly targets middle class Americans with high medical bills. The tax hits 10 million households every year. Before Obamacare, Americans facing high medical expenses were allowed an income tax deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income. This income tax increase will cost Americans $40 billion over the next ten years.
According to the IRS, approximately 10 million families took advantage of this tax deduction each year before Obamacare. Almost all were middle class: The average taxpayer claiming this deduction earned just over $53,000 annually in 2010. ATR estimates that the average income tax increase for the average family claiming this tax benefit is about $200 – $400 per year.
“Cadillac Tax” — Excise Tax on Comprehensive Health Insurance Plans ($87.3 million tax hike between 2016-2025)
In 2020, a new 40 percent excise tax on employer provided health insurance plans is scheduled to kick in, on plans exceeding $10,200 for individuals and $27,500 for families. According to research by the Kaiser Family Foundation, the Cadillac tax will hit 26 percent of employer provided plans and 42 percent of employer provided plans by 2028. Over time, this will decrease care and increase costs for millions of American families across the country.
HSA Withdrawal Tax Hike ($100 million tax hike between 2016-2025)
This provision increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Ten Percent Excise Tax on Indoor Tanning ($800 million tax hike between 2016-2025)
The Obamacare 10 percent tanning tax has wiped out an estimated 10,000 tanning salons, many owned by women. This $800 million Obamacare tax increase was the first to go into effect (July 2010). This petty, burdensome, nanny-state tax affects both the business owner and the end user. Industry estimates show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women. There is no exception granted for those making less than $250,000 meaning it is yet another tax that violates Obama’s “firm pledge” not to raise “any form” of tax on Americans making less than this amount.
[Byline Alexander Hendrie]
12 December 2016
Americans for Tax Reform
The federal government issued sixty contracts from 2009 to 2014 in efforts to build Healthcare.gov, the federal insurance marketplace. According to a report issued today by the inspector general (OIG) of the Department of Health and Human Services (HHS), the government had already paid out just under half a billion dollars by February 2014, five months after the beginning of open enrollment. The government is already under obligation for another $300 million, and the estimated value of the sixty contracts totals $1.7 billion. —The Weekly Standard
(CNS News) “The ACA’s employment taxes create strong incentives to work less,” the study, The Affordable Care Act and the New Economics of Part-Time Work, states. “The health subsidies’ structure will put millions in a position in which working part-time (29 hours or fewer, as defined by the ACA) will yield more disposable income than working their normal full-time schedule.”
“In any month they work part-time or not at all, they can obtain subsidized coverage; in any month they work full-time, they do not qualify for these subsidies,” the study reports. “Members of this group would, on average, have to work an additional 5.5 hours per week to make up for the subsidies they forgo by working full-time.”
“the study’s results derive from the sheer size of the taxes that the ACA has created.”
–food stamp enrollments–paints a startling portrait of the “new normal” in the Obama economy.
According to the Department of Agriculture’s most recently released data, the number of individuals enrolled in the food stamp program (known officially as the Supplemental Nutrition Assistance Program, or SNAP) has remained above 45 million every single month for three years straight.
Still, despite historic levels of Americans now dependent on welfare, and with the middle class poorer now than it was in 1984, Obama continues to claim that his economic policies have made things better. —Big Government
The losses cost taxpayers at least $2.2 billion in upfront federal loans awarded by the Obama administration to 24 nonprofit co-ops under Obamacare. The co-ops were intended to help keep health care costs down by providing non-profit competition with commercial for-profit insurers.
The losses do not include statewide costs where the state or local governments were forced to cover doctor and hospital bills that the failed co-ops could not pay from remaining revenues.
The failed states, the amount of their loans and the number of enrollees who lost coverage are:
- Arizona – $93 million in a loan, 59,000 lost coverage
- Colorado – $72 million in a loan, 80,000 lost coverage
- Connecticut – $128 million in a loan, 40,000 lost coverage
- Illinois – $160 million in a loan, 49,000 lost coverage
- Iowa/Nebraska – $145 million in a loan, 120,000 lost coverage
- Kentucky – $146 million in a loan, 51,000 lost coverage
- Louisiana – $66 million in a loan, 17,000 lost coverage
- Maryland – $65 million in a loan, 9,000 lost coverage
- Maine – $132 million in a loan, a portion of 71,000 will lose coverage
- Michigan – $72 million in a loan, 28,000 lost coverage
- Nevada – $66 million in a loan, 63,000 lost coverage
- New Jersey – $109 million in a loan, 35,000 lost coverage
- New York – $265 million in a loan, 208,000 lost coverage
- Ohio – $129 million in a loan, 22,000 lost coverage
- Oregon – $61 million in a loan, 15,000 lost coverage
- Oregon – $57 million in a loan, 21,000 lost coverage
- South Carolina – $88 million in a loan, 67,000 lost coverage
- Tennessee – $73 million in a loan, 29,700 lost coverage
- Utah – $90 million in a loan, 56,000 lost coverage
- Vermont – $34 million in a loan – never licensed
Buried in a recent report by the Government Accountability Office (GAO) ’s appendices is a stunning statistic. Out of $5,509,074,183 in grants allocated to state-based exchanges, $1,453,766,433 was spent on actually building the IT infrastructure of Obamacare websites. More suspiciously still, nearly $2.4 billion was authorized for IT spending, and of the over $5.5 billion total, apparently only $3.2 billion was actually spent. However, despite the exchanges being $2.3 billion under budget, only a scant $300 million has been returned to the federal government so far.
The math is there in cold black and white. Now it’s time to see whether Obamacare truly ended in the black, or if it’s only the ultimate black mark on this administration’s already corrupt record.
“Congress is looking into the funding for several Obamacare programs for which no money has been directly appropriated.”
In April, a Mercatus Center study discovered that federal, state and municipal regulations have cost the U.S. economy $4 trillion.
The law itself is 2,700 pages, and it has spawned 20,000 pages of regulations.