Does Obamacare Raise Any Federal Taxes? – YES
General Reference (not clearly pro or con)
[Editor’s Note: In the June 28, 2012 5-4 US Supreme Court decision to uphold the constitutionality of the PPACA, Chief Justice John G. Roberts in his majority opinion wrote, “the mandate… [is] just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may well be within Congress’s constitutional power to tax.” The “penalty” in the PPACA for not having health insurance is, therefore, a new federal tax. Additional taxes in Obamacare are listed below.]
The Health Care and Education Reconciliation Act of 2010 (HR4872), Section 4980I, “Excise Tax on High Cost Employer-Sponsored Health Coverage,” page 730, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“(a) IMPOSITION OF TAX.-If- ‘(1) an employee is covered under any applicable employer sponsored coverage of an employer at any time during a taxable period, and ‘(2) there is any excess benefit with respect to the coverage, there is hereby imposed a tax equal to 40 percent of the excess benefit.'”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
The Health Care and Education Reconciliation Act of 2010 (HR4872), Section 4959, “Taxes on Failures by Hospital Organizations,” page 739, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“If a hospital organization to which section 501(r) applies fails to meet the requirement of section 501(r)(3) for any taxable year, there is imposed on the organization a tax equal to $50,000.”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
The Health Care and Education Reconciliation Act of 2010 (HR4872), Section 5000B, “Imposition of Tax on Elective Cosmetic Medical Procedures,” page 754, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“(a) IN GENERAL.-There is hereby imposed on any cosmetic surgery and medical procedure a tax equal to 5 percent of the amount paid for such procedure (determined without regard to this section), whether paid by insurance or otherwise.”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
The Health Care and Education Reconciliation Act of 2010 (HR4872), Section 5000B, “Imposition of Tax on Indoor Tanning Services,” page 902, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“(a) IN GENERAL.-There is hereby imposed on any indoor tanning service a tax equal to 10 percent of the amount paid for such service (determined without regard to this section), whether paid by insurance or otherwise.”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
The Health Care and Education Reconciliation Act of 2010 (HR4872), Section 9015, “Additional Hospital Insurance Tax on High-Income Taxpayers,” page 752-753,signed into law on Mar. 23, 2010, available at the Library of Congress website, states:
“(2) ADDITIONAL TAX.–In addition to the tax imposed by paragraph (1) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) a tax equal to 0.5 percent of wages which are received with respect to employment (as defined in section 3121(b)) during any taxable year beginning after December 31. 2012, and which are in excess of—
(A) in the case of a joint return, $250,000, and
(B) in any other case, $200,000.”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
PRO (yes)
Pro
Lori Robertson, Managing Editor at Fact Check.org, stated in her June 28, 2012 article “Romney, Obama Uphold Health Care Falsehoods,” available at its website:
“It’s certainly true that the health care law would raise taxes on some Americans, particularly those with higher incomes. The law includes a Medicare payroll tax of 0.9 percent on income over $200,000 for individuals or $250,000 for couples, and a 3.8 percent tax on investment income for those earning that much. The Joint Committee on Taxation estimated that the biggest chunk of revenue — $210.2 billion — comes from those taxes.
There are other taxes in the health care law — including an excise tax on the manufacturers of certain medical devices and on indoor tanning services. The health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation’s calculations. Republicans tend to add in fees on individuals who don’t obtain health insurance (which the Supreme Court now agrees can be considered taxes) and businesses that don’t provide it to bump that up to about $500 billion.
Some taxes, such as those on medical devices, may or may not be passed on to consumers in the form of higher prices, but a large majority of Americans would not see any direct tax increase from the health care law.”
Pro
William Perez, MA, tax accountant, in a July 3, 2012 article, “Tax Impacts of the Supreme Court’s Health Care Decision,” available at about.com, stated:
“The Supreme Court’s decision leaves all the tax provisions in PPACA intact. Those tax provisions include:
- the requirement for individuals to maintain health insurance coverage beginning in 2014 or else pay a tax penalty;
- individual premium assistance tax credits to help low- and middle-income families purchase health insurance on state-run insurance exchanges;
- an increase in the threshold for deducting medical expenses as an itemized deduction from the current 7.5% to 10% starting in 2013;
- an increase in the tax penalty to 20% for non-qualifying distributions from Health Savings Accounts, Flexible Spending Accounts or Archer Medical Savings Accounts;
- an additional 0.9% Medicare hospital insurance tax on wages and self-employment income over $200,000 for unmarried persons and over $250,000 for married couples starting in 2013;
- an additional 3.8% Medicare hospital insurance tax, also starting in 2013, on investment income or modified adjusted gross income over $200,000 for unmarried persons and over $250,000 for married couples;
- an increase in the adoption tax credit and making this credit fully refundable, effective for the years 2010 and 2011;
- an excise tax of 10% on indoor tanning services;
- the requirement that health insurance plans cover dependents up to age 26 on their parent’s plan;
- a tax exclusion for student loan repayment assistance programs for health professionals to work in underserved localities;
- a shared responsibility payment on large employers who fail to provide adequate health insurance plans for their full-time employees effective starting in 2014;
- a tax credit for small employers ranging from 25% to 50% for providing health insurance coverage to their employees, effective for the years 2010 through 2015;
- a decrease from $5,000 to $2,500 in the amount that can be saved pre-tax through a healthcare flexible spending account, effective starting 2013 and with the amount inflation-indexed for subsequent years;
- restriction of the definition of qualified medical expenses for healthcare flexible spending accounts, health savings accounts, health reimbursement accounts and Archer medical savings accounts so that only prescribed medications and insulin are eligible for tax-qualified disbursements, effective since 2011;
- a business tax credit of 28% of covered drug costs for employers who provide health plans offering prescription coverage for retired employees, effective beginning in 2013;
- limitations in the amount that health insurance companies can deduct for any one employee’s compensation to $500,000 effective beginning in 2013;
- a new economic substance penalty of either 20% or 40% for tax transactions after March 30, 2010, that do not involve a substantial change in a person’s economic situation or have a substantial business purpose;
- a new excise tax of 40% on high-cost health insurance plans offered by employers starting in 2018;
- an annual fee on manufacturers and importers of brand-name prescription medicines;
- an excise tax of 2.3% on medical devices starting in 2013.”
CON (no)
Con
[Editor’s Note: Based upon a neutral reading of the Patient Protection and Affordable Care Act and bi-partisan third party analysis, this question seems to have a clear and obvious Pro (yes) answer, and ProCon.org has therefore presented the responses in a single column with no opposing perspective.]
