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, $billion 2012 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) 210.2 317.7
“Cadillac tax” on high-cost plans * 32 111
Employer mandate * 52 106
Annual tax on health insurance providers * 60.1 101.7
Individual mandate * 17 55
Annual tax on drug manufacturers/importers * 27 34.2
2.3% excise tax on medical device manufacturers/importers* 20 29.1
Limit FSAs in cafeteria plans * 13 24
Raise 7.5% AGI floor on medical expense deduction to 10% * 15.2 18.7
Deny eligibility of “black liquor” for cellulosic biofuel producer credit 23.6 15.5
Codify economic substance doctrine 4.5 5.3
Increase penalty for nonqualified HSA distributions * 1.4 4.5
Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines * 5.0 4
Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund * 2.6 3.8
Eliminate deduction for expenses allocable to Medicare Part D subsidy 4.5 3.1
Impose 10% tax on tanning services * 2.7 1.5
Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers 0.6 0.8
Modify section 833 treatment of certain health organizations 0.4 0.4
Other Revenue Effects 60.3 222**
Additional requirements for section 501(c)(3) hospitals Negligible Negligible
Employer W-2 reporting of value of health benefits Negligible Negligible
Total Gross Tax Increase: 569.2 1,058.3
* 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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