Obama's Tax Hikes
Which one of these will kill the most jobs?
Since taking office, President Barack Obama has signed into law twenty-one new or higher taxes:
1. A 156 percent increase in the federal excise tax on tobacco: On February 4, 2009, just sixteen days into his
Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents
per pack. The median income of smokers is just over $36,000 per year.
1. A 156 percent increase in the federal excise tax on tobacco: On February 4, 2009, just sixteen days into his
Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents
per pack. The median income of smokers is just over $36,000 per year.
|
2. Obamacare Individual Mandate Excise Tax (takes effect in Jan
2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the amounts shown in the table to the right: |
 |
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes,
and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337
and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337
3. Obamacare Employer Mandate Tax (takes effect Jan. 2014): If an employer does not offer health coverage, and at least
one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-
time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through
the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to
enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA;
Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-
time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through
the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to
enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA;
Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
|
4. Obamacare Surtax on Investment Income (Tax hike of $123
billion - takes effect Jan., 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93 |
 |
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in
partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to
gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions
from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to
gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions
from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
5. Obamacare Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/takes effect Jan. 2018): Starting
in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold
($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA;
Page: 1,941-1,956
in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold
($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA;
Page: 1,941-1,956
|
6. Obamacare Hike in Medicare Payroll Tax (Tax hike of $86.8 billion - takes effect Jan. 2013): Current law and changes: Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93 |
 |
7. Obamacare Medicine Cabinet Tax (Tax hike of $5 billion - took effect Jan. 2011): Americans no longer able to use health
savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-
prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 billion - took effect Jan. 2011): Increases additional tax on non-
medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-
advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
9. Obamacare Flexible Spending Account Cap – aka“Special Needs Kids Tax” (Tax hike of $13 billion - takes effect Jan.
2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners
for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of
families with special needs children in the United States, and many of them use FSAs to pay for special needs education.
Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research
Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special
needs education. Bill: PPACA; Page: 2,388-2,389
10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 billion - takes effect Jan. 2013): Medical device
manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.
Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
11. Obamacare "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 billion - takes effect
Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that
those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent
of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion - took effect July 2010): New 10 percent excise tax
on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399
13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with
Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994
14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 billion - took effect Jan. 1 2010): The special tax
deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium
revenues are spent on clinical services. Bill: PPACA; Page: 2,004
15. Obamacare Excise Tax on Charitable Hospitals (Min$ - took effect immediately): $50,000 per hospital if they fail to meet
new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill:
PPACA; Page: 1,961-1,971
16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on
the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
17. Obamacare Tax on Health Insurers (Tax hike of $60.1 billion - takes effect Jan. 2014): Annual tax on the industry
imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on
firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6
billion - takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000
19. Obamacare Employer Reporting of Insurance on W-2 ($min - takes effect Jan. 2012): Preamble to taxing health
benefits on individual tax returns. Bill: PPACA; Page: 1,957
20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion - took effect immediately). This is a tax increase on a type
of bio-fuel. Bill: Reconciliation Act; Page: 105
21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion - took effect immediately).
This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because
the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act;
Page: 108-113
savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-
prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 billion - took effect Jan. 2011): Increases additional tax on non-
medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-
advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
9. Obamacare Flexible Spending Account Cap – aka“Special Needs Kids Tax” (Tax hike of $13 billion - takes effect Jan.
2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners
for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of
families with special needs children in the United States, and many of them use FSAs to pay for special needs education.
Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research
Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special
needs education. Bill: PPACA; Page: 2,388-2,389
10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 billion - takes effect Jan. 2013): Medical device
manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.
Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
11. Obamacare "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 billion - takes effect
Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that
those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent
of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion - took effect July 2010): New 10 percent excise tax
on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399
13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with
Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994
14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 billion - took effect Jan. 1 2010): The special tax
deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium
revenues are spent on clinical services. Bill: PPACA; Page: 2,004
15. Obamacare Excise Tax on Charitable Hospitals (Min$ - took effect immediately): $50,000 per hospital if they fail to meet
new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill:
PPACA; Page: 1,961-1,971
16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on
the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
17. Obamacare Tax on Health Insurers (Tax hike of $60.1 billion - takes effect Jan. 2014): Annual tax on the industry
imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on
firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6
billion - takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000
19. Obamacare Employer Reporting of Insurance on W-2 ($min - takes effect Jan. 2012): Preamble to taxing health
benefits on individual tax returns. Bill: PPACA; Page: 1,957
20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion - took effect immediately). This is a tax increase on a type
of bio-fuel. Bill: Reconciliation Act; Page: 105
21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion - took effect immediately).
This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because
the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act;
Page: 108-113
 |
