According to the bi-partisan Joint Committee on Taxation, Harry Reid’s 2000-page Health Care Debacle (Senate Version) Contains a few interesting goodies therein:
1. 40% excise tax on health coverage in excess of $8,500/$23,000 ($149.1 billion)*
If I read this right, if your individual health care coverage is worth more than $8,500, you’ll pay a 40% tax on the value over $8,500 that the government determines it is. Ultimately, it’s an attempt to limit the amount of health care coverage an individual would be willing to get (or business for its employees)… I mean, sure you COULD get that nice health care plan with tons of benefits, but you’re going to have to pay a 40% tax on it.
2. Employer W-2 reporting of value of health (negligible revenue effect)*
No real revenue effect, but this means that employers are going to have to compile numbers and report them to the government so that the government can tax you that extra 40%. I wonder if accountants would do this research for free?
3. Conform definition of medical expenses ($5.0 billion)*
This would force things like Archer MSA’s, health savings accounts, flex accounts, and medical reimbursements to conform to the same definitions of medical expenses. By increasing revenues, this means that they expect the government to get more money (and therefore, you would get less money). In other words: it’s a penalty for being a thrifty consumer.
4. Increase penalty for nonqualified health savings account distributions to 20% ($1.3 billion)*
They expect more folks to be caught using their health savings for things the government doesn’t believe should count. If only there was someone else who could make such a tough decision about how to spend money that belongs to a consumer! Say, like a consumer!
5. Limit health flexible spending arrangements in cafeteria plans to $2,500 ($14.6 billion)*
Do you use a cafeteria plan or flex account to cut back on your taxes every year? Do you have an insurance plan that doesn’t kick in 100% coverage until your out-of-pocket expenses hit $4000, and so you budget that amount every year? Do you have children and thus have increased medical expenses? Well, Harry Reid would like to say, “Screw you and the horse you rode in on” while he limits your cafeteria plan to $2,500. Right now, there is no statutory limit. It’s all driven by the employer or the Flex Plan administrator company.
6. Require information reporting on payments to corporations ($17.1 billion)
All I know is that they expect to get 17 billion bucks out of this, so someone’s losing money to the government somewhere.
7. Additional requirements for section 501(c)(3) hospitals (negligible revenue effects)
So hospitals that want to file as a 501(c)(3) would have to meet additional requirements. Apparently, being “non-profit” isn’t enough.
8. Impose annual fee on manufacturers & importers of branded drugs ($22.2 billion)*
9. Impose annual fee on manufacturers & importers of medical devices ($19.3 billion)*
Here’s a lesson in capitalism for you, kids. If you “impose annual fees” on manufacturers of anything, those manufacturers aren’t just going to write off those expenses in their profit/loss statement. This is because businesses don’t actually pay taxes…. they pass their costs along to their consumers (aka “you”). So when these manufacturers have fees imposed on them, who’s going to end up paying those fees?
Hint: It’s “you”.
10. Impose annual fee on health insurance providers ($60.4 billion)*
How dare any company exist that competes against the government’s entry into their industry! They must be punished! FEE THEM!!!!! (And by “them”, I mean “you”).
11. Study and report of effect on veterans health care (no revenue effect)
Yes. We must study and report on the effects of our veterans’ health AFTER we’ve imposed this stupid system.
12. Eliminate deduction for expenses allocable to Medicare Part D subsidy ($5.4 billion)*
“Eliminate deduction” = more taxes for you.
13. Raise 7.5% AGI floor on medical expenses deduction to 10% ($15.2 billion)*
This means that to start deducting your medical expenses from your taxes, your medical expenses would have to hit 10% of your adjusted gross income. In other words, if your household’s AGI is $60,000, you would need to spend $4,500 on medical stuff today in order to begin deducting medical expenses from your taxes. Under Reid’s plan, that would increase to $6,000. Keep in mind that the people most likely to hit this amount are families with children and the elderly.
14. $500,000 deduction limitation on taxable year remuneration to health insurance officials ($0.6 billion)*
Most companies can deduct up to $1,000,000 for executive compensation from their taxes. Under this law, this deduction would be cut in half. Obviously, these companies must be punished! Make them pay more! They certainly won’t pass along their loss of deductions to their consumers! FEE THEM! (And by them, I mean “you”.)
15. Additional 0.5% hospital insurance tax on wages > $200,000 ($250,000 joint) ($53.8 billion)
You make more than $200,000 – or have a household that makes more than $250,000? You get to pay even more taxes for Medicare! Yay!
16. Modification of section 833 treatment of certain health organizations ($0.4 billion)
Specifically targets Blue Cross / Blue Shield.
17. Impose 5% excise tax on cosmetic surgery ($5.8 billion)*
This seems like a tax on the right, but the sad fact is that most cosmetic surgery is performed on the middle class – and while they claim it’ll only be for “elective” cosmetic surgery, all too often “any” cosmetic surgery is classified as “elective”. There’s been some recent moves towards covering things like breast implants for mastectomy patients, but that just means that after years and years of implants for mastectomy patients, they’re finally getting around to calling it “non-elective”.
And what about bariatric procedures? You have someone who’s 200 lbs overweight who decides to get a gastric bypass or band… will that be called “elective”, despite the fact that it will extend their life, potentially by decades?
Oh – and remember how the Democrats ran on a platform of tax cuts for the middle class? Remember how Obama’s plan supposedly would not increase taxes, fees, or fines on businesses in exchange for government health care? Remember BHO trumpeting the “Middle Class Tax Cut”? See all those asterisks in my list? Those are items that will, either directly or indirectly, cost the middle class more money. They’re either a direct tax (like the “cosmetic surgery” tax) or an indirect tax (like the “fees” imposed on companies for the crime of existing in competition to the Federal Government).
And let us not for a moment forget the human cost. Yep. Required abortion coverage is back in the bill.
Hat tip to McQ over at QandO and RightWingNews and the Tax Prof over at TaxProfBlog.
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