The Wall Street Journal editorial “Taxes upon taxes upon taxes” didn’t get anywhere near the attention it deserves. While Obama is out stumping for tax increases, the Journal reminds us of the tax increases that are already baked in the cake thanks to Obamacare:
Keep in mind that Mr. Obama has already signed the largest tax increase since 1993. While everyone focuses on the Bush tax rates that expire after 2012, other tax increases are already set to hit the economy thanks to the 2010 Affordable Care Act. As a refresher, here’s a non-exhaustive list of ObamaCare’s tax increases:
• Starting in 2013, the bill adds an additional 0.9% to the 2.9% Medicare tax for singles who earn more than $200,000 and couples making more than $250,000.
• For first time, the bill also applies Medicare’s 2.9% payroll tax rate to investment income, including dividends, interest income and capital gains. Added to the 0.9% payroll surcharge, that means a 3.8-percentage point tax hike on “the rich.” Oh, and these new taxes aren’t indexed for inflation, so many middle-class families will soon be considered rich and pay the surcharge as their incomes rise past $250,000 due to tax-bracket creep. Remember how the Alternative Minimum Tax was supposed to apply only to a handful of millionaires?
Taxpayer cost over 10 years: $210 billion.
• Also starting in 2013 is a 2.3% excise tax on medical device manufacturers and importers. That’s estimated to raise $20 billion.
• Already underway this year is the new annual fee on “branded” drug makers and importers, which will raise $27 billion.
• Another $15.2 billion will come from raising the floor on allowable medical deductions to 10% of adjusted gross income from 7.5%.
• Starting in 2018, the bill imposes a whopping 40% “excise tax” on high-cost health insurance plans. Though it only applies to two years in the 2010-2019 window of ObamaCare’s original budget score, this tax would still raise $32 billion—and much more in future years.
• And don’t forget a new annual fee on health insurance providers starting in 2014 and estimated to raise $60 billion. This tax, like many others on this list, will be passed along to consumers in higher health-care costs.
There are numerous other new taxes in the bill, all adding up to some $438 billion in new revenue over 10 years. But even that is understated because by 2019 the annual revenue increase is nearly $90 billion, or $900 billion in the 10 years after that. Yet Mr. Obama wants to add another $1 trillion in new taxes on top of this.
Following the news every day, I am at least moderately well informed, but I had forgotten about the tax increases Obamacare has brought us. For reasons too numerous to mention the repeal of Obamacare remains our highest public policy priority.