Americans for Tax Reform has culled the 1990-page Pelosi health-care overhaul bill to find the taxes that will supposedly collect over $540 billion in revenue over 10 years. It’s quite an impressive list of new burdens on Americans and their health-care providers and producers — but that’s redundant. After all, who do you think will end up paying for the medical-device taxes? It won’t be insurers or doctors:
- Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
- Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
- Medicine Cabinet Tax (Page 324)
- Cap on FSAs (Page 325)
- Increased Additional Tax on Non-Qualified HSA Distributions (Page 326)
- Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327)
- Surtax on Individuals and Small Businesses (Page 336)
- Excise Tax on Medical Devices (Page 339)
- Corporate 1099-MISC Information Reporting (Page 344)
- Delay in Worldwide Allocation of Interest (Page 345)
- Limitation on Tax Treaty Benefits for Certain Payments (Page 346)
- Codification of the “Economic Substance Doctrine” (Page 349)
- Application of “More Likely Than Not” Rule (Page 357)
See the ATR post for detailed descriptions of each new tax.