Courtesy of TheModerateVoice.com
Even though the Supreme Court has said that the mandate is only constitutional under the Congress’s power to tax — which as I said here makes it a tax. The taxes I listed in the title are taxes. They are identified as taxes in the law and will be collected as a tax.
Excise Tax
One of the first talking points you will hear is that there will be a 40% excise tax on “Cadillac” insurance policies. These are the insurance plans that will typically cost more than $10,200 for an individual or $27,500 for a family per year.
From the law:
‘‘(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.
OK. The ambiguous wording here is “excess benefit.” One would have to assume that the law would state what an excess benefit is so people who did not want to pay an additional 40% for their health insurance know what to avoid.
b) EXCESS BENEFIT.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘excess benefit’ means, with respect to any applicable employer-sponsored coverage made available by an employer to an employee during any taxable period, the sum of the excess amounts determined under paragraph (2) for months during the taxable period. ‘‘(2) MONTHLY EXCESS AMOUNT.—The excess amount determined under this paragraph for any month is the excess (if any) of— ‘‘(A) the aggregate cost of the applicable employer sponsored coverage of the employee for the month, over ‘‘(B) an amount equal to 1?12 of the annual limitation under paragraph (3) for the calendar year in which the month occurs.
Hmmm…no definition of the words – excess benefit – so, how can you determine that this tax will raise $3.2 billion a year? That brings us to the second part – “…cost more than $10,200/$27,500 per year…”
So, let’s do the math – 40% of $10,200 is $4,080. 40% of $27,500 is $11,000. So, to get $3.2 billion, there has to be between 291,000 and 784,000 enrolled in this type of plan now.
Now, if you were to continue reading this section of the law, the only year mentioned concerning the excise tax is 2018. According to Cigna (select the down arrow next to excise tax), the excise tax will not be collected until 2018. So, there is $12.8 billion in costs that have to be accounted for in years 2014-2017. (The NCPA does not have the tax kicking in until 2019 which would make it $16 billion that would need to be accounted for in lost revenue.)
It also means that they intend on collecting this $32 billion in one-to-three years.
The next major question is how many people are currently enrolled in these so-called Cadillac plans?
Also, to maintain this projection, the number of people enrolled in “Cadillac” plans will either need to remain constant between the range of people mentioned earlier; or the pool that qualifies for this tax has to continually expand.
According to the WhiteHouse.gov, the number of premiums that would be affected by the “Cadillac” tax is a total of 3% for 2013. Again, using the numbers provided here in the chart, 3% of 143,000,000 (The employment number was rounded up.) is 4,290,000. (Note: This is assuming that every employed person actually has insurance which Obamacare is supposed to guarantee.)
Remember this gem from the 2008 campaign:
Obama: “No family making less than $250,000 will see any form of tax increase…not any of your taxes…”
Question: What is the likelihood that every single person or family enrolled in a “Cadillac” plan – a typical union plan — makes more than $250,000 year? Not likely, huh?
Obama has broken a campaign promise since Obamacare will raise taxes on healthcare for people he does not consider “rich.” He intends to screw the unions after he would no longer attempt or care about being elected.
Medicare Tax
The next talking point you will hear is that Obamacare will broaden the Medicare tax base for high-income taxpayers with a projected revenue of $210.2 billion over a ten year period. That would average out to $21 billion a year.
According to the law, there is only one mention of a Medicare tax which says that it is a tax imposed under Chapter 2.
So, it would be safe to assume that the 1.45% we are already taxed is not going to change. So, it will be safe to assume that they are referring to some other tax in terms of high-income taxpayers who earn over $200K for a single person or single return and over $250K for a family or joint return.
So, going through the revenue provisions, I could only find one mention of $200,000 and $250,000. It is described as: ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS.
From the law:
‘‘(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 0.9 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—[As revised by section 1402(b)(1)(A) of HCERA]
‘‘(A) in the case of a joint return, $250,000,
‘‘(B) in the case of a married taxpayer (as defined in section 7703) filing a separate return, 1?2 of the dollar amount determined under subparagraph (A), and
‘‘(C) in any other case, $200,000.’’.
So, these earners will continue to pay the 1.45% Medicare tax that we all pay, but these income earners will have to pay an additional 0.9% on any income above $200K for single returns or $250K for joint returners. (I will round this up to 1% for ease of calculation.)
Also, one should note the following:
‘‘(f) SPECIAL RULES FOR ADDITIONAL TAX.—‘‘(1) IN GENERAL.—In the case of any tax imposed by section 3101(b)(2), subsection (a) shall only apply to the extent to which the taxpayer receives wages from the employer in excess of $200,000, and the employer may disregard the amount of wages received by such taxpayer’s spouse.
So, if you have an “other half” or “better half”, they would not pay this tax if they don’t make more than the minimum amount themselves.
So, let’s provide a few examples:
• 1% of $50K is $500 ($250K salary)
• 1% of $100K is $1,000 ($300K salary)
• 1% of $250K is $2,500 ($450K salary)
• 1% of $800K is $8,000 ($1 million dollar salary)
Now, obviously, the higher the income means the fewer the number of people who would actually make that much in income. That is a reasonable assumption. I am also going to assume that this is also spread out over ten years as well since the law states:
“…during any taxable year beginning after December 31, 2012…”
So, that would mean this tax is supposed to provide $21 billion a year. (It would be higher if the projection for this ends in 2019.) That would require the following number of individuals having to pay the additional hospital taxes”
• $500 – 42,000,000 people have to be paid $250K to generate $21 billion
• $1000 – 21,000,000 people have to be paid $300K to generate $21 billion
• $2500 – 8,400,000 people have to be paid $450K to generate $21 billion
• $8000 – 2,625,000 people have to be paid $1M to generate $21 billion
Do realize that numbers of people are actually higher since the rate for this tax is actually 0.9%. Also, the numbers and salaries would have to remain constant for this tax to generate the revenue needed to fund PPACA throughout the entire ten year period.
A few questions –
• How many of these income earners would also qualify under the excise tax for “Cadillac” plans? Do realize that we would then be asking people to pay an additional 41% on their healthcare costs.
• How many of these salaries are usually subject to some other external circumstance? Such as business revenue, stocks, etc. Therefore they would have to remain constant – which is NOT likely to happen.
• Does anyone really believe that we have approximately 3-4% of the working population making more than $250,000 a year? If not, where is this revenue really going to come from?
Should I even mention this?
Barack Obama: “…If you are a family making less than $250,000, my plan will not raise your taxes period!”
