Healthcare: New Bill Loaded with Taxes

Americans for Tax Reform (ATR) published a piece October 29 detailing all of the taxes found in the latest version of healthcare reform legislation to emerge from the U.S. House of Representatives. House Resolution 3962, otherwise known as the Affordable Health Care for America Act, was introduced by Speaker of the House Nancy Pelosi (D-CA), and is nearly 2,000 pages long.

ATR introduces their list by saying, "This gargantuan beast contains thirteen new tax hikes." The taxes are then detailed and referenced with the page number where they can be found in the House bill.

Tax #1: the Employer Mandate Excise Tax, found on page 275, says that an employer who does not pay 72.5 percent of an employee's health premium for single employees or 65 percent for a family employee will be subject to an excise tax equal to up to 8 percent of average wages. The tax rate increases with the success of the business, with those making less than $500,000 subject to 0 percent and those making over $750,000 subject to the 8 percent.

Tax #2: the Individual Mandate Surtax, found on page 296, says individuals who fail to buy qualifying coverage will be subject to an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income or the average premium.

Tax #3: the Medicine Cabinet Tax, found on page 324, says that non-prescription medications could not be purchased from health savings accounts, flexible spending accounts, or health reimbursement arrangements.

Tax #4: the Cap on Flexible Spending Accounts, found on page 325, imposes a cap of $2,500 where no cap existed before.

Tax #5: an Increased Additional Tax on Non-Qualified Health Savings Account Distributions, found on page 326, means non-qualified distributions from HSAs would have an additional 20 percent tax imposed, 10 percent more than the current tax.

Tax #6: a Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D, found on page 327, will reportedly erode private sector participation in Medicare.

Tax #7: the Surtax on Individuals and Small Businesses, found on page 336, says that an income surtax of 5.4 percent on modified adjusted gross income of over $500,000 or $1 million for those married and filing jointly will be imposed.

Tax #8: the Excise Tax on Medical Devices, found on page 339, says that an excise tax of 2.5 percent of the wholesale price will be imposed on medical device manufacturers. Don't you think this will be passed on in the price?

Tax #9: the Corporate 1099-MISC Information Reporting provision, found on page 344, requires that 1099-MISC forms be issued to corporations in addition to persons for trade or business payments. According to ATR, current law is limited to persons.

Tax #10: a Delay in Worldwide Allocation of Interest, found on page 345, puts off for nearly a decade the worldwide allocation of interest.

Tax #11: a Limitation on Tax Treaty Benefits for Certain Payments, found on page 346, raises taxes on American companies with operations overseas.

Tax #12: the Codification of the 'Economic Substance Doctrine,' found on page 349, allows the Internal Revenue Service to disallow a tax deduction if the IRS decides the motive of the taxpayer was not business related.

Tax #13: the Application of 'More Likely Than Not' Rule, found on page 357, says publicly traded partnerships and corporations who take in more than $100 million have raised standards on penalties.

Now, I wouldn't call all of these taxes, but Americans for Tax Reform seemingly deems as a tax anything that imposes an additional cost. Well, I've been wondering how Democrats planned on covering more people without adding to the deficit or debt. Now it's clear: tax everything under the sun.

http://www.atr.org/breaking-comprehensive-list-taxesbr-house-democrat-a4113