Entire content is from KennethHennessey.com - very good analysis on hidden taxes
in Health Care "Reform" bill.
Major tax The follow
increases in the Reid health care bill
- 40% excise tax on health coverage
inexcess of $8,500 ( individuals) / $23,000 (families). Amounts are indexed for inflation by CPI-U + 1% – beg ins in2013 – $149 B tax increase
- Additional 0.5% Medicare (Hospital
Insurance) tax on wages inexcess of $200,000 ($250,000 for jo int filers) – beg ins in2013 – $54 B tax increase
- Impose annual fee on manufacturers and importers of branded drugs – beg
ins in2009 – $22 B tax increase
- Impose annual fee on manufacturers and importers of certa
inmedical devices – beg ins in2009 – $19 B tax increase
- Impose annual fee on manufacturers and importers of health
insurance plans – beg ins in2009 – $60 B tax increase
inhalf (to $500K) the amount of an executive’s compensation that a health plan can deduct from its corporate income taxes – beg ins in2013 – $600 million tax increase
- Impose 5% excise tax on cosmetic surgery and similar procedures – beg
ins for surgery in2010 – $6 B tax increase!
Here’s some reaction to these provisions. Updates s
With this proposal, Senator Reid is lead
I am not a fan of the social
Leader Reid’s bill would use new Medicare payroll taxes to f
Both of these are enormous precedents, long-term structural game changers
Excise tax on high-cost plans (§9001, begIt appears Leader Reid did, as rumored, raise slightly the limits
inn ing on page 1979)
From my perspective, this is crazy. Reid and Senate Democrats now have to defend themselves on two major tax
Medicare payroll tax Wow. It’s
increase (§9015, beg inn ing on page 2040)
- Wages up to $106,800
in2009 (and in2010) are subject to payroll taxes of 15.3%: 12.4% Social Security + 2.9% Medicare.
- Wages above $106,800 are subject to payroll taxes of 2.9%.
individuals, wages between $106,800 and $200,000 for individuals are subject to payroll taxes of 2.9%.
individuals, wages above $200,000 are subject to payroll taxes of 3.4%. That’s a 0.5 percentage po int tax increase. So for each $1K you make above $200K, you would pay $5 more inpayroll taxes.
- For jo
int filers, wages between $106,800 and $250,000 for individuals are subject to payroll taxes of 2.9%.
individuals, wages above $250,000 are subject to payroll taxes of 3.4%. That’s a 0.5 percentage po int tax increase. So for each $1K you make above $250K, you would pay $5 more inpayroll taxes.
- These threshold amounts of $200K and $250K are not
indexed for inflation or wages, so more real income ineach subsequent year will be subject to the 0.5 percentage po int tax increase.
- The additional 0.5 percentage po
int tax increase comes on the employee side, so you still pay income taxes on these additional amounts of taxes paid.
This provision is a big risk for moderate Senate Democrats.
Tax experts – it looks like they’re do
Taxes on branded drugs, medical devices, and health plans (§9008 on page 2010, §9009 on page 2020, and §9010 on page 2026)The drug tax is a tax on “Big Pharma.” Bigger drug companies would pay higher taxes. For
It is also applied only to brand name drugs, not generics. I would like to hear the policy rationale for this. The political rationale is simple: shaft the big brand-name Pharma companies. With exceptions, brand-name drug companies generally lean R, generic drug companies generally lean D.
There are also a bunch of report
I know of no legitimate policy rationale for any of these taxes. They are derived from the follow
- If the government spends more on health
insurance, these two industries would make more money.
- The government needs tax revenues.
- So we’ll tax these
industries to capture some of their increased revenues.
ShaftI’m torn between hat
ing the health plan executives (§9014 on page 2035)
It’s terrible policy to s
This is gratuitous political punishment of an unpopular constituency. The section is titled “Limitation on excessive remuneration paid by certa
How’s that political alliance work
Rather than try
Cosmetic surgery tax (§9017 on page 2045)The federal government would impose a 5% sales tax on cosmetic surgery. Late-night comedians will love this.
I can’t th
Update: Best guess is that it does not apply to braces, but would apply to teeth whiten
This tax would violate the President’s pledge not to raise taxes on those with annual
It would apply to surgery performed beg