Under my plan, no family making less than $250,000 a year will see any form of tax increase – not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes” (spoken in September 2008 at a town-hall meeting in Dover).
Obama’s pledge against any form of tax increase on Americans making less than $250,000 a year “was thrown out the window” when he signed the healthcare law, says John Kartch, communications director with Americans For Tax Reform (founded by anti-tax crusader Grover Norquist).
Here’s a rundown of seven ObamaCare tax hikes that affect:
No. 1. The Individual Mandate Excise Tax. Starting in 2014, anyone not buying “qualifying” health insurance must pay an income tax surtax. It goes up each year until 2016 and beyond when a couple would pay a tax of the higher or $1,360 or 2.5% of adjusted gross income.
No. 2. The Over-The-Counter Drugs Trap. Since Jan. 1, 2011, employees with health savings accounts, flexible spending accounts or health reimbursement accounts have no longer been able to use pre-tax funds stashed in these accounts to buy over-the-counter medicines for allergy relief and the like without a doctor’s prescription (there’s an exception for insulin).
No. 3. The Healthcare Flexible Spending Account Cap. Starting Jan. 1, 2013, employees will face a $2,500 cap on the amount of pre-tax salary deferrals they can make into a healthcare flexible spending account. There is no cap under current law. In light of the new cap, employee benefits groups are lobbying for Congress to modify the use-it-or-lose-it rule that means employees forfeit unused funds in their accounts at the end of the plan year.
No. 4. The Medical Itemized Deduction Hurdle. Starting Jan. 1, 2013, taxpayers who face high medical expenses will only be allowed a deduction for expenses to the extent they exceed 10% of adjusted gross income, up from 7.5% now. Taxpayers 65 and older can still use the old 7.5% threshold through 2016. For how to score the medical expense deduction before 2013, click here.
No. 5. The Health Savings Account Withdrawal Penalty. Since Jan. 1, 2011, taxpayers who withdraw money from health savings accounts for non-medical expenses before age 65 face a 20% penalty, up from 10% before.
No. 6. The Indoor Tanning Services Tax. Since July 1, 2010, folks using indoor tanning salons face a new 10% excise tax. This one hasn’t been bringing in as much revenue as anticipated.
No. 7. The Cadillac Health Insurance Plan Tax. Starting in 2018, there will be a new 40% excise tax on taxpayers who are covered by comprehensive health insurance plans.
Americans For Tax Reform has a full list of ObamaCare’s 20 new or higher taxes on American families and small businesses.