Research Briefing

Host Of New Taxes From Obama’s Government-Run Health Care Bill Will Kill Jobs, Hurt American Families

Obama’s Government-Run Health Care Bill Has $570 Billion In New Taxes. (Douglas W. Elmendorf, Letter To Speaker Nancy Pelosi, 3/20/10)

OBAMACARE INCLUDES JOB-KILLING TAXES ON SMALL BUSINESSES AND INVESTMENTS

$210.2 Billion Income Tax Increase Over Next Decade. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

• Hitting Small Business Owners Across The Country, Killing Jobs. “[S]mall business owners may get tax breaks and save on health costs for their companies, but if they have to end up paying more taxes in their individual filings, then ultimately they won’t benefit at all ... [I]ndividuals who make $200,000 and couples who make in the upwards of $250,000 will see their income taxes go up. ‘We’re saving it on the business but now we’re getting taxed more on our income,’ Marks said. It’s just ‘being taken out of somewhere else.’ It’s a sentiment that’s being echoed by small business owners across the country.” (Huma Khan, “Will New Health Care Law Really Help Small Businesses?” ABC News, 4/1/10)

$2000 Tax Per Worker For Job Creators Who Don’t Provide Health Insurance, Including Part-Time Or Seasonal Employees. “Applicable Payment Amount... inserting ‘$2,000...’ Full-Time Equivalents Treated As Full-Time Employees.--Solely for purposes of determining whether an employer is an applicable large employer … an employer shall, in addition to the number of full-time employees for any month otherwise determined, include for such month a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120.” (Sec. 1003, H.R. 4872, “Health Care And Education Reconciliation Act Of 2010,” As Passed By The House, 3/21/10)

• Meaning Companies With Flexible Employment Schedules Would Face Much Higher Costs. “The assessment is $2,000 per employee, which, according to SkiNH lobbyist Bruce Berke and group president Alice Pearce, could mean as much as $1 million in fines to the big ski resorts, some of which hire as many as 500 seasonal workers. Also affected would be any business that hires on a seasonal basis, and, like most nationally, do not offer health insurance.” (John DiStaso, “Granite Status: Ski Resorts Worry Health Care Reform Will Have Chilling Effect,” The New Hampshire Union Leader, 3/25/10)

$20 Billion Tax Increase On Medical Devices Companies. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

• CEO Of Cleveland’s Invocare Says Medical Device Tax Is Like “Throwing A Hand Grenade” Into Health Care Industry. “The law includes a 2.3% excise tax on the sale of all medical devices except for consumer goods, such as contact lenses and hearing aids. . .Among established medical device companies, Invacare Corp. of Elyria, the world’s largest wheelchair maker, has been a vocal opponent of the tax. Invacare CEO A. Malachi Mixon III in a January interview with Crain’s went so far as to say the tax was the equivalent of ‘throwing a hand grenade in the middle of the health care economy.’” (Chuck Soder, “Tax On Medical Device Manufactuers Could Be Taxing,” Crain’s Cleveland Business, 3/29/10)

$4.5 Billion Tax Increases On Retiree’s Prescription Drug Plans. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

• James Klein, President Of Association Representing 300 Large Job Creators, Says It Could Cost Companies $14 Billion And “In This Economic Environment, It Makes No Sense.” “In a telephone news conference on Monday, Mr. Klein cited a study by Towers Watson, a consulting firm, saying the loss of the deduction would cost companies $14 billion in future years. ‘Particularly in this economic environment, it makes no sense to impose this type of a hit on companies’ financial statements,’ Mr. Klein said.” (Steven Greenhouse, “Companies Push To Repeal Provision Of Health Law,” The New York Times, 3/29/10)

$2.7 Billion Tax Increase On Indoor Tanning Services. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

•  International Smart Tan Network Said Tax Could “Shutter Up To 1,000 Businesses And Put About 9,000 Jobs At Risk.” “‘'The tax is a microcosm of what went wrong with the entire process of this health care bill,’ said Joseph Levy of the 3,000-member International Smart Tan Network. ... With salons already hobbled by the recession, Levy believes the tax could shutter up to 1,000 businesses and put about 9,000 jobs at risk.” (Jackie Crosby, “Salons Seeing Red Over Federal Tanning Tax,” Minneapolis Star Tribune, 4/2/10) 

AND HARMFUL TAXES ON AMERICAN FAMILIES AND THEIR CARE

ObamaCare Includes Tax On Those Who Can’t Afford To Buy Government-Approved Insurance. “Require U.S. citizens and legal residents to have qualifying health coverage. Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income. The penalty will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016. Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment.” (Kaiser Family Foundation, “Summary Of New Health Reform Law,” Fact Sheet, 3/26/10)

• With Penalties That Will Send Them To Jail If They Don’t Pay Up. “Democracy for America … is out today with an email attacking health care legislation on a vulnerable point: The individual mandate. ... ‘[T]hey say that even without a public op tion, the bill still “covers” 30 million more Americans. [The bill] requires every single American buy health insurance or break the law and face penalties and fines. So, the bill doesn’t actually “cover” 30 million more Americans - instead it makes them criminals if they don’t buy insurance from the same companies that got us into this mess.’” (Ben Smith, “Dean Group Attacks Mandate,” Politico’s “Live Pulse” Blog, 12/16/09)

$32 Billion Tax Increase On Health Insurance Plans. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

• Which Will Hit Middle-Class Americans. JCT Chief Of Staff Thomas Barthold: “Senator Grassley, the penalty proposed in the Chairman’s mark, is as you observed, it’s structured as a penalty excise tax, we have other penalty excise taxes in the internal revenue code ... we think that some people would be subject to the penalty excise tax when everything shakes out we would expect that some would have incomes less than $200,000 dollars.” (George Stephanopoulos, “Mandate Or Tax? Grassley V. Baucus,” ABC News’s “George’s Bottom Line” Blog, 9/22/09)

$13 Billion Tax Increase That Will Limit Flexible Spending Accounts. (“Estimated Revenue Effects Of ‘The ‘Reconciliation Act Of 2010’ In Combination With The Revenue Effects Of The ‘Patient Protection And Affordable Care Act (“PPACA”),” Joint Committee On Taxation Report, 3/20/10)

• Which Lowers Out Of Pocket Health Care Expenses. “To pay for this sweeping reform, here’s what will change: Those tax-free flexible spending accounts will be cut in half. They reimburse some medical bills not covered by insurance. The new cap: $2,500 ...” (Mark Strassmann, “Already Insured? Get Ready To Pay More,” CBS News, 3/22/10)