Paul L. Caron
March 8, 2013

Following up on Tuesday’s post, House Holds Hearing Today on The Tax-Related Provisions in the President’s Health Care Law: Tax Foundation, Obamacare Tax Increases Will Impact Us All:

The Joint Committee on Taxation recently released a 96 page report on the tax provisions associated with Affordable Care Act. The report describes the 21 tax increases included in Obamacare, totaling $1.058 trillion – a steep increase from initial assessment. The summer 2012 estimate is nearly twice the $569 billion estimate produced at the time of the passage of the law in March 2010. …

Provision 2010 Estimate, 2010-2019, $billion2012 Estimate, 2013-2022, $billion
0.9% payroll tax on wages and self-employment income and 3.8% t tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles) / $250,000 (married)210.2317.7
“Cadillac tax” on high-cost plans *32111
Employer mandate *52106
Annual tax on health insurance providers *60.1101.7
Individual mandate *1755
Annual tax on drug manufacturers/importers *2734.2
2.3% excise tax on medical device manufacturers/importers*2029.1
Limit FSAs in cafeteria plans *1324
Raise 7.5% AGI floor on medical expense deduction to 10% *15.218.7
Deny eligibility of “black liquor” for cellulosic biofuel producer credit23.615.5
Codify economic substance doctrine4.55.3
Increase penalty for nonqualified HSA distributions *1.44.5
Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines *5.04
Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund *2.63.8
Eliminate deduction for expenses allocable to Medicare Part D subsidy4.53.1
Impose 10% tax on tanning services *2.71.5
Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers0.60.8
Modify section 833 treatment of certain health organizations0.40.4
Other Revenue Effects60.3222**
Additional requirements for section 501(c)(3) hospitalsNegligibleNegligible
Employer W-2 reporting of value of health benefitsNegligibleNegligible
Total Gross Tax Increase:569.21,058.3
* Provision targets households earning less than $250,000.** Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.
Source: Joint Committee on Taxation Estimates, prepared by Ways and Means Committee Staff


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