Shhhhh…The Affordable Care Act’s Middle Class Tax Burden

With all the talk about “the fiscal cliff,” did anyone notice the absence of discussion about the ObamaCare tax increases? President Obama’s claim that he was protecting the middle class from tax increases went completely unchallenged in this context. Even the Republicans were silent on the matter. And here are the facts: Five of the new tax increases Americans are facing this month are new taxes created under the Affordable Care Act –and three of those five hit the middle class right square in the forehead.

The new tax on health insurance is about as regressive as it gets. It will total $100 billion over the next 10 years and only a small amount of that will come from people who are considered “rich.”

  • The health insurance tax will fall on private sector Medicaid plans, which have about 70% of all Medicaid enrollees.
  • The tax will fall on Medicare Advantage plans whose enrollees have below average incomes and are disproportionately minority.
  • The tax will hit every small business and every individual who buys insurance in the commercial market place.
  • The tax will not fall on self-insured plans whose enrollees include the highest paid workers and the highest paid CEOs.

The “healthcare taxes” that begin this month will impact everything from dividends and capital gains to day care and services for special needs children. They will increase the tax bill for those who have extraordinary medical expenses ―those who, obviously, can least afford it. And they will increase the tax burden for the chronically ill who are going broke paying thousands each year in prescription drug expenses. The taxes will fall on medical devices ranging from pacemakers and artificial hips to stents. No doubt, these taxes will result in consumer price increases, like they always do. In total, these new taxes will create a burden in excess of $250 billion over the next 10 years –and most of the burden will be born by lower to middle income Americans.

Source: Excerpts from recent articles written by John Goodman

 

—Tom Finn

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