Your taxes are going up. If you think being part of the middle class or supporting Barack Obama will save you, you are dead wrong. There is a lot more going on with the federal budget than fiscal cliff tax rates. Obamacare taxes, state budgets in crisis, and all the trappings of a planned economy are ready and waiting to bleed you dry. If only we could make sure that the president’s supporters are the only ones who have to pay new health care taxes by funding tax credits and Obamacare subsidies.
Obamacare taxes: the president has already raised middle class tax rates.
Would you prefer a head tax, losing your health plan, or kissing your job goodbye?
The employer mandate is worrisome enough, but now word is spreading about a $63.00 health insurance head tax that begins in 2014, an unexpected bump in Obamacare tax rates. The administration claims this is a temporary increase, but we all know how temporary tax hikes play out. This one is here to stay.
The president promised you could keep your doctor:
Now, let me just start by setting the record straight on a few things I’ve been hearing out here — (laughter) — about reform. Under the reform we’re proposing, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.¹
Can you still keep your doctor if Obamacare means you lose your health plan because your employer decides your insurance costs too much? Employers with at least 50 workers are already facing stiff penalties if they don’t throw in a health insurance plan with the jobs they create (see: Obama Employer Mandate, Fairness, and Shared Responsibility Suck). Hopefully, you are not the one whose salary is chosen to defray the employer penalty. Your company might make the decision that it doesn’t like Obamacare taxes, your health care benefits, or you.
More Obamacare taxes: tax credits and low-income subsidies.
Loopholes aren’t the only tax credits we have to pay for. Health care tax credits cost money too, even the ones many businesses aren’t using (see: Small Companies Targeted by This Obamacare Tax Credit Prank).
Not only will we be shelling out for low income health care subsidies, the cost of Obamacare subsidies went up by over $200 billion:
According to CBO and JCT’s updated estimates, the subsidies to be provided through the insurance exchanges over the 2012–2022 period are $210 billion higher than the previous estimates—$178 billion more in projected tax credits for health insurance premiums and $31 billion more in projected cost-sharing subsidies and related spending.²
Like all other tax and spend vehicles, Obamacare has passed on the cost of the subsidies to those with incomes ready to be taxed. Those who contribute to keeping things afloat are the ones who will be punished:
The Joint Committee on Taxation (JCT) estimates that in 2020 about 14 million tax filers will claim Obamacare’s health insurance credit but only about two million of these households will have positive income tax liability after benefiting from the credit.³
How many Americans will help fund those subsidies with their Obamacare non-compliance fines?
A health care fine that feels like a tax hike.
If your employer dumps your health plan and you are sent to the exchange market you will still have the costs and tax rates imposed by government health care buried in the premiums you pay. If you don’t buy that government-mandated insurance policy you have another tax to worry about unless you don’t have a job, in which case someone else will pick up the tab. The government estimates that 6 million Americans will be subject to the non-compliance penalty included in the roster of Obamacare taxes. Uncle Sam hopes the fine will net $7 billion in 2016 and $8 billion annually thereafter.4
How will the Medicaid public option change state tax rates?
We received some good news from the Congressional Budget Office about the Obamacare low-income Medicaid expansion:
As a result of the Court’s decision, CBO and JCT now anticipate that some states will not expand their programs at all or will not expand coverage to the full extent authorized by the ACA.5
The bad news is that many states are already stung by Medicaid costs, so your state tax rates are probably already impacted by Medicaid. For states that don’t toe the party line and do what the White House tells them, the federal assistance and subsidies they depend on can be cut. States need that money very badly. Just ask any public employee worried about the future of government pension benefits.
Tomorrow: Why teachers hope your state tax rates will go up.