Friday, February 8, 2013

Obamacare taxes explained and simplified

Obamacare Taxes:

-Starting in 2014, anyone not signing up for ObamaCare or not purchasing health care has to pay 1% of their income or up to 258 dollars, whichever is higher. By 2015, these people have to pay 2% of their income or a minimum of 325 dollars if they're single, 650 dollars if the household contains two adults, and 975 dollars if the household contains three adults, whichever is higher. By 2016, these people will have to pay 2.5% of their income or a minimum of 695 dollars if they're single, 1,390 dollars if the household contains two adults, or 2,085 if the household contains three adults, whichever is higher.

-Employers with 50 or more employees who don't offer health insurance coverage have to pay 2,000 dollars per full-time employee to the government.

-Families making over 250,000 dollars a year or single people making over 200,000 dollars a year will have to pay an additional 3.8% tax on income from investments. This tax also applies to all "unearned" income-- money that does not come from a salary or from selling something, or from retirement funds life insurance, or municipal bonds (municipal bonds are exempt from government taxation).

-Families making over 250,000 dollars a year or single people making over 200,000 dollars a year will have to pay an additional .9% of all the money they make over $200,000 (for families or married couples, $250,000). The first 200,000 dollars or 250,000 dollars of income will be exempt from this tax.

-A tax that prevents people from holding more than 2,500 dollars in a tax-exempt Flexible Savings Account (FSA). This tax will be especially hard on parents who use FSAs to pay for the education of their children with special needs.

-Removes the tax deduction that allows people to buy legal but nonprescription drugs using Health Savings Accounts or Flexible Savings Accounts without being taxed.

-There will also be new taxes on health insurance providers, certain drug companies, companies that manufacture medical devices, and a certain type of bio-fuel.

Taxes that took effect back in 2010:

-Removes the tax deduction for employees who provide employees with a retirement "Rx" drug plan with Medicaid.

-Tax on people who use indoor tanning salons.



Additional Sources:
http://obamacarefacts.com/obamacare-facts.php
http://jeffduncan.house.gov/full-list-obamacare-tax-hikes
http://www.insideindianabusiness.com/contributors.asp?id=2319


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I also thought it would be wise to include a short description of the pros and cons of Obamacare, which is still a hotly debated issue in the United States.

Benefits of Obamacare:  

-no one will have to pay more than ten percent of his or her income for health insurance.
-people with pre-existing conditions (people who already have diseases that would put them at higher risk of requiring hospital health care) will not be denied access to health care or health insurance payments.
-As the Supreme Court determined in a controversial ruling, people cannot be required to sign up for the Obama Care program.

Cons of Obamacare:

-People who don't sign up and choose not to purchase health insurance will have to pay a heavy tax penalty.
-lowered salaries for doctors, and therefore fewer talented physicians in the workforce
-higher overall costs for the population as a whole for health care.

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