Obamacare – It’s a tax.
The media finally got around this week to report on how Obamacare will cause your taxes to go up.
Yahoo reported:
The Affordable Care Act, colloquially known as Obamacare,
completely changed how people get health care. With a big expansion of
health insurance through mandatory coverage requirements, tens of
millions of uninsured Americans will find themselves needing to get
enrolled…
…Going forward, though, Obamacare imposes additional Medicare taxes on certain individuals. In particular, two groups will be affected:
- Joint filers with wages or other work-related earnings greater than
$250,000 and singles earning more than $200,000 will have to pay an
additional 0.9 percentage points in Medicare tax, bringing their total
to 2.35% for employees or 3.8% for self-employed workers. Employers are
supposed to handle this requirement in their withholding, but for
two-earner couples, that may prove impossible, as your employer will
have no knowledge of what your spouse earns.
- Those with total adjusted gross incomes of more than $250,000 for
joint filers, or $200,000 for singles, will have Medicare taxes imposed
on their investment income as well. On whatever amount of investments
exceeds the $250,000 gross-income level, you’ll have to pay the full
3.8% surtax yourself.
The net effect on high-income earners will be
to bring total top tax brackets to 43.4% — the 39.6% regular tax amount
plus the 3.8% Medicare tax.
Hitting lower-income workers
Those who earn less than the $200,000 and $250,000 thresholds
shouldn’t assume that their taxes will be unaffected by Obamacare. New
limitations on flexible spending arrangements
will hit taxpayers of all income levels, limiting the amount you can
set aside tax-free in a flex plan to $2,500 per year. Previously, there
was no technical upper limit, although most employers imposed a $5,000
maximum. But for those who have high levels of predictable medical
expenses, the forced reduction in flex-plan use could cost you hundreds
of dollars in extra income, Social Security withholding, and Medicare
withholding taxes.
Moreover, those who rely on deducting medical
expenses won’t be able to get as big a tax benefit from them. Obamacare
raised the floor on itemized medical expenses from 7.5% of gross income
to 10%. That may not sound like much, but it could reduce your deduction
by thousands of dollars and thereby increase your tax bill
substantially.
Obamacare adds 17 new taxes or penalties on all Americans. (
Heritage)
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