Obamacare Causes Americans to Say, "Ouch" on Tax Day
Those who waited until the last minute to file their 2013 taxes (and didn’t file an extension like me) may have noticed that Obamacare caused them to fork over more to Uncle Sam. Fox News reminds us of some of the health care law’s taxes that went into effect last year:
- A Medicare Tax Increase of .9 percent for individuals earning over $200,000 or married couples earning $250,000
-A net investment income tax of 3.8 percent tax on individuals, estates, and trusts worth more $200,000 or $250,000 for joint filers.
- And an increase in the threshold for itemized deductions for medical expenses from 7.5 percent to 10 percent of gross income.
At the beginning of 2014, the health care law’s tax burden increased again when the Health Insurance Tax (HIT), a tax on health plans sold on the fully-insured market, went into effect. Its $8 billion in new taxes in 2014 (which will rise by 41% in 2015 and reach $14.3 billion in 2018) make health plans more expensive for small businesses that make up 88% of the fully-insured market. Small business owners have told Congress that the premiums hikes from the tax will be “catastrophic” and “devastating.”
Higher taxes are rarely a good thing. However, now is a particularly bad time, because an Altarum Institute report finds that health care costs might be picking up speed:
National Health Expenditures (NHE) in February 2014 grew 6.7% over February 2013, the highest rate since March 2007, just prior to the recession, which officially began in December 2007. While governmental data attribute a portion of the growth in January and February 2014 to newly insured individuals under the Affordable Care Act, much of the acceleration in growth occurred during 2013, prior to ACA’s expanded coverage. Growth during the first quarter of 2013 was less than 4% but, by the fourth quarter, it had risen to 5.3%.