Wednesday, December 26, 2012

Obamacare - The Gift That Keeps On Giving

Even more of Obamacare's taxes are due to hit upon the stroke of midnight on December 31.

The Detroit News: New year, new taxes arrive with health act

Taxpayers, especially businesses, will be hit with billions of dollars in new charges starting in January under provisions of the Affordable Care Act that will be ushered in with the new year.

Among the new provisions is a surtax on investment income for those earning $250,000 or more, a $2,500 cap on flexible spending accounts and a 2.3 percent excise tax on manufacturers of medical devices that has led Kalamazoo-based Stryker Corp. to slim its workforce.

The looming health taxes have taken a back seat to the expiration of the Bush-era tax cuts set to automatically increase Jan. 1 unless Congress takes action to avoid the recession-threatening "fiscal cliff." While the biggest provisions of the health care act — namely the individual mandate — won't take effect until 2014, notable tax provisions have taken hold, and some businesses say the coming wave will exacerbate an anemic business climate.

Obamacare is predicated on taxes on the front end paying for benefits to occur later. Thia is, of course, unsustainable in the long run as benefits don't suddenly stop for a few years so the taxes can catch up.

Businesses are already trying to figure out both the arcane and complicated regulations and how to handle the rules that dictate their requirement to provide health care for workers once they reach over 50 employees.

There's also a lovely little tax increase on anyone doing well these days:

The 2013 tax that likely will have the biggest disincentive on business expansion, Miller believes, is a new 3.8 percent Medicare payroll tax rate on wages and self-employment profits above $200,000, compared to 2.9 percent.

"You are not just hitting more affluent individuals; you tend to hit the unincorporated smaller businesses," said Miller, co-author of the book "Why Obamacare Is Wrong for America."

If you think the assorted taxes and regulations are not going to lead to higher unemployment and a reduction in business hiring and expansion, you're kidding yourself.

But at least you'll be required to buy comprehensive health insurance, so there's always that.

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