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Tuesday, December 25, 2012

Obamacare Tax Hikes

By Douglas V. Gibbs

While everyone is distracted by the debates over the fiscal cliff, the real tax hikes are ready to slap all of us.  Tax-free employer health insurance is about to be taxed, as Washington politicians take aim at doing away with "loopholes" in the tax code.  The elimination of tax deductions regarding health insurance may be only the first step towards eliminating the private health care industry.  In 2018, the health care law imposes a tax on high-value health insurance plans.

Even though the Affordable Care Act was passed three years ago, the taxes for funding the health care law is coming into effect in 2013, which includes Medicare spending cuts, and a "Medicare contribution" that funnels funds into the government's general fund.

The biggest new Obamacare tax is a 3.8 percent levy on investment income that applies to individuals making more than $200,000 or married couples above $250,000.  This tax also applies to profits from home sales as well.  This means that some sellers, those with over $250,000 in gains on their home, will be hit with this taxation.

A mass sell-off of investments to avoid the tax is in play, as investors race to sell assets this year before it takes effect.

Higher wage earners will also be hit by an additional Medicare payroll tax of 0.9 percent on wage income above $200,000 for an individual or $250,000 for couples.

Other health care law tax increases taking effect Jan. 1:

— A 2.3 percent sales tax on medical devices used by hospitals and doctors. Industry is trying to delay or repeal the tax, saying it will lead to a loss of jobs. Several economists say manufacturers should be able to pass on most of the cost.

— A limit on the amount employees can contribute to tax-free flexible spending accounts for medical expenses. It's set at $2,500 for 2013, and indexed thereafter for inflation.

-- Political Pistachio Conservative News and Commentary

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