As 2013 Begins, Get Ready For an ObamaCare Tax Onslaught
January 15, 2013
Given all the debate there has been over the fiscal cliff, many people have given little attention to the ObamaCare tax onslaught. The third wave of ObamaCare taxes began on January 1, the latest blitz before the tsunami of changes from the health overhaul law hits in 2014, says Grace-Marie Turner, president of the Galen Institute.
The most controversial tax is the medical device tax, which will affect firms that make important medical equipment.
- The tax will impose a 2.3 percent on profit from gross sales, even if the company has no profit at all.
- It is expected to collect about $29 billion over the next 10 years, which will hurt research and development.
- The medical device industry employs 400,000 people in 12,000 factories across the countries, but many companies say the tax will force them to relocate overseas.
Other ObamaCare taxes include:
- Surtax on investment income -- individuals making $200,000 or more annually, or couples making $250,000 or more, must pay a new 3.8 percent levy on income from investments, including profits from the sale of a home.
- Medicare tax -- The same group of people will have their Medicare payroll tax increased to 3.8 percent.
- Flexible Spending Account tax -- sets a $2,500 cap on how much workers can set aside for tax-free medical costs.
- Furthermore, itemized medical deductions will be tightened. The threshold for allowed deductions will increase from 7.5 percent to 10 percent.
Altogether, the tax increases amount to an approximate $1 trillion. Nearly every industry is affected as well, from health insurers and drug companies to even tanning salons.
As more of the regulations get implemented and taxpayers see how much they have to pay over the next couple years, there is hope that there will be new attempts to delay or get rid of the law altogether.
Source: Grace-Marie Turner, "As 2013 Begins, Get Ready For an ObamaCare Tax Onslaught," Forbes, January 1, 2012.
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