President Obama’s tax pledge, which he made as a candidate, couldn’t have been any clearer: “Under my plan, no family making less than $250,000 will see their taxes increase — not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes.”
He even went further than that. He promised that he would lower taxes for just about all of us. “I will cut taxes … for 95 percent of all working Americans.”
The president broke both these promises as soon as he signed Obamacare into law. In one speech, Obama talked about the dangers of new taxes because health care costs are already out of control — and he promised to ease our tax burden. Obamacare was supposed to make health care cheaper for all of us.
Instead, it’s going to drive up the price of everything from tax bills to wheelchairs. When you add it all up, Obamacare will bring about the biggest tax increase in our country’s history — $569 billion over the next decade.
Starting in 2013, individuals with incomes over $200,000 a year and families making more than $250,000 will see [a] payroll tax rise from 1.45 to 2.35 percent. That’s a single tax increase of more than 60 percent.
Also in 2013, individuals and families earning more than $200,000 and $250,000, respectively, will face a new 3.8 percent Medicare tax on “unearned” income, such as interest, capital gains, annuities, royalties, rents and dividends. This new Medicare tax is estimated to enrich the government by $210 billion from 2013 to 2019.
It’s supposed to be a tax on the rich, but a lot of not-so-wealthy Americans will end up paying it as well, because many will eventually sell a home. Under Obamacare, if the profit earned on any home sale exceeds the capital gains exemption of $250,000 for an individual or $500,000 for a family, the excess amount will be subject to the new Medicare tax, in addition to capital gains taxes.
Unfortunately, this will amount to a new tax on retirement savings because so many Americans rely on the long-term appreciation of their homes to help fund their nest eggs.
Even worse, none of these taxes is indexed to inflation. So as incomes rise — as they invariably do over time — more and more people will be subjected to these so-called taxes on the wealthy.
Twenty years from now, a person earning $200,000 would be the equivalent of a person earning $92,000 today, assuming 4 percent inflation. Within 30 years, the tax would hit people earning today’s equivalent of $62,000. And in 50 years, this “high-roller” tax would kick in at today’s equivalent of $29,000.
These taxes will be waiting for you, your children and your grandchildren.
People whose employers offer them top-of-the-line health insurance will be penalized for the privilege. In 2018, so-called gold-plated Cadillac plans will be subject to a whopping 40 percent excise tax.
The tax will ensnare employer-sponsored policies with premiums higher than $10,200 for individuals and $27,500 for families. This hefty new tax is expected to bring the government $32 billion in just the first two years.
This tax, like so many other Obamacare taxes, won’t be adjusted for inflation. It might take 10, 20 or even 30 years, but sooner or later, every employer-sponsored policy will be subject to this 40 percent tax.
Making matters worse, the cost of health insurance tends to rise faster than income. The Kaiser Family Foundation found that from 1999 to 2009, overall inflation was 28 percent. Earnings rose 38 percent. But health insurance premiums rose a whopping 131 percent.
If premiums continue rising at this pace, it will take only a few years before the average plan is deemed a Cadillac plan under the law.