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Apr152014

Brown For US Senate - MEMO: Jeanne Shaheen’s Obamacare Tax Hikes 

 

 

 

 

 

 

From: Colin Reed, Campaign Manager, Scott Brown For Senate

Re: Jeanne Shaheen’s Obamacare Tax Hikes

Date: Monday, April 14, 2014

With tomorrow's tax filing deadline looming, the burden of paying for bigger and bigger government becomes front and center on the minds of all Americans.  In 2013, New Hampshire taxpayers worked until April 15 to pay off their total tax bill for the year, according to the Washington, D.C.-based Tax Foundation. That means up to this point, every dollar earned by the people of New Hampshire has gone to pay for government. Only on April 16 do they start working for themselves.
 
How has Senator Jeanne Shaheen responded to this rising tax burden? She has voted to raise taxes even higher.
 
When Senator Shaheen cast the deciding vote for Obamacare, she not only imposed a flawed health care system on New Hampshire, she also imposed $500 billion in new or higher taxes that will affect individuals and businesses, hurting jobs and the economy.  Among the Obamacare tax hikes are higher Medicare and investment income taxes, a new medical device tax, and higher taxes on brand name drugs and premium health care plans. Jeanne Shaheen even voted to impose a new tax on tanning salons. 
 
Obamacare is not only bad for New Hampshire's health care system; its slew of tax hikes are also a major drag on the state's economy.  Among the barrage of tax increases Jeanne Shaheen supported as part of Obamacare are (courtesy of Americans For Tax Reform):


$123 Billion: Surtax on Investment Income: A new 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:

 

  Capital Gains Dividends Other
2012 15% 15% 35%
2013+ 23.8% 43.4% 43.4%

 
$86 Billion: Hike in Medicare Payroll Tax: Current law and changes:

 
  First $200,000
($250,000 Married)
Employer/Employee

 
All Remaining Wages
Employer/Employee

 
Current Law

1.45%/1.45%
2.9% self-employed

 


1.45%/1.45%
2.9% self-employed

 
Obamacare Tax Hike 1.45%/1.45%
2.9% self-employed
1.45%/2.35%
3.8% self-employed

 
 
$60.1 Billion: Tax on Health Insurers: Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits.

$32 Billion: Excise Tax on Comprehensive Health Insurance Plans: Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed.
 
$23.6 Billion: “Black liquor” tax hike: This is a tax increase on a type of bio-fuel. 
 
$22.2 Billion: Tax on Innovator Drug Companies: $2.3 billion annual tax on the industry imposed relative to share of sales made that year. 
 
$20 Billion: Tax on Medical Device Manufacturers: Medical device manufacturers employ 360,000 people in 6,000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. 
 
$15.2 Billion: High Medical Bills Tax: Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. 
 
$13.2 Billion: Flexible Spending Account Cap – aka “Special Needs Kids Tax”: Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education

$5 Billion: Medicine Cabinet Tax: Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). 
 
$4.5 Billion: Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D 

$4.5 Billion: Codification of the “economic substance doctrine”: This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed.
 
$2.7 Billion: Tax on Indoor Tanning Services: New 10 percent excise tax on Americans using indoor tanning salons. 
 
$1.4 Billion: HSA Withdrawal Tax Hike: Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. 
 
$0.6 Billion: $500,000 Annual Executive Compensation Limit for Health Insurance Executives        

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