The nation waits for the Supreme Court to announce the ruling about health-care. Many wonder how their ruling will change taxes?
Not only does the Supreme Court decide about the Affordable Care Act, but also taxes. How will their judgement change taxes?
The law must include tax cuts and increases. Even if the individual mandate is eliminated, the taxes would go on. Unless the Supreme Court eliminates the entire healthcare bill.
The mandate tax will be the punishment people would owe for not buying insurance. The High Court must decide whether it is considered a penalty or a tax.
There are important ACA tax cuts for small businesses that will help with purchasing insurance for their workers. There was over a million dollars spent on lawyers and fees to challenge the healthcare law by the NFIB.
Is it practical to have the subsidy if the Court overthrows the key elements of the reform? It is a sure thing that the NFIB will agree.
The law contains many tax increases, that includes the excise tax on top-value, employer-sponsored healthcare plans which will start in 2018. There is be a provision that will make it harder for people to itemize medical costs.
There are a couple of other tax increases. The first increase is a .9% Medicare tax for those making above a certain threshold. This money would finance the elder care health system. The other is the 3.8% tax that households who have non-traditional income will have to bear. Some feel this is a surtax and the real purpose is to bankroll part of the cost of the ACA.
The Supreme Court decision may hit upper income families hard. In 2013, the two levies would hike taxes on households making $500,000 to $1 million, their taxes would increase by $4,600. For those making more than a million they would pay $41,000 in taxes.
Even for lower income families, there will be a tax. Married couples making over $250,000 combined, and single taxpayers making $125,000 will face a brand new tax. Households needing to pay these taxes over the next decade are going to double in number, because inflation is not taken into account. It will reach 4.6% from the 2.4% that it is now.
These tax provision should not be forgotten, even if the Supreme Court leaves them untouched. I think we shall hear about them again.
- Tax Carnival Ecstasy – March 27, 2012 (2012taxes.org)
- Unusual Tax Deductions You Should Not Claim (2012taxes.org)