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More Tax Surprises from Obamacare to Come in 2013 & 2014
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January 03, 2013
As we approach 2013 and head towards 2014, there are more looming tax increases for Americans – from Obamacare. In order to pay for the President’s trillion dollar new entitlement program the government will have to raise revenue from a number of places. This includes taxes on wages, new fees, and taxes on investment income.
Currently, to pay for Medicare employees and employers both pay a hospital insurance tax equal to 1.45 percent on all wages. Starting on January 1, Obamacare requires workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.
Next, there will be a new fee for medical plans to help cover people with pre-existing conditions. The $63 fee, will affect an estimated 190 million Americans beginning in 2014. While many companies and small businesses pay a portion of their employee’s health insurance, with increasing penalties and taxes under Obamacare, this latest fee is likely to be passed on directly to employees and their families. The fee however, is temporary, and is estimated to raise $25 billion in new revenue over three years. This of course can be extended by Congress, potentially making a once temporary fee, permanent.
2014 will also see another new tax on investment income, called an “Unearned Income Medicare Contribution.” The new 3.8 percent tax applies to the net investment income of those with modified adjusted gross incomes above $200,000 for single taxpayers and $250,000 for couples filing jointly. While the majority of the new taxes and fees in Obamacare go to pay for specific portions of the massive program, the 2-year old law does not provide for this revenue to be deposited in a specific fund. It is added to the government’s general tax revenues and can be used for any program or department not related to healthcare including – education, agriculture, or defense.
These new taxes and fees are but a few of the many set to be implemented in the next two years. While the President and Members of Congress pledged to the American people that the massive bill would in fact decrease healthcare costs, increase access to care, and expand coverage, the onerous taxes, fees and regulations included in the package are in fact having the opposite effect. Americans will see take home pay decrease and employers will pass new fees and costs associated with complying to the law to their employees.
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