Tuesday, April 6, 2010

Healthcare tax overhaul...

This is my "How to buy a house" analogy to the health care reform fiasco.

I know I need a house, so trusting the realtor I tell her I need one now that has 3 bedrooms, a kitchen, a living room and 2 bath rooms.
It is a crisis you see.

She says, "Buy this one and then I'll show you around it."

What a deal I will get because she knows just what I need

Here is a used car saleswoman who has operated recently in this manner...

What a deal we got! Where ever it says tax, you pay, no matter if the employer is targeted as the payee, because the Empoyer is just going to pass it down the line, either by not making pay raises of letting off employees. the easiest way to reduce over head is to lay off a portion of the work force. (Economics 101)

Here are 13 changes in the massive heathcare bomb that will impact your tax bill, for better or worse. Mostly worse...

The new health care reform law is chock-full of new taxes and tax increases that will affect many individuals and businesses, but it will be years before most of these hikes take a bite out of your -- or your company’s -- wallet. The law also has tax breaks to help both individuals and small businesses pay for insurance.

1. A new 10% excise tax on indoor tanning services on services provided after June 30, 2010. Whew, Good thing it is indoor with all the global warming out door. This will probably put tanning salons out of business.

2. The new law gives small firms tax credits as incentives to provide coverage, starting this tax year. Employers with 10 or fewer workers and average annual wages of less than $25,000 can receive a credit of up to 35% of their health premium costs each year through 2013. The credit is phased out for firms larger than that and disappears completely if a company has more than 25 employees or average annual wages of $50,000 or more. Beginning in 2014, small firms that sign up with one of the health exchanges to be created can receive a credit of up to 50% of their costs. So the better the company does the more it pays in taxes, and by the way a credit is not a tax break, you pay the full amount and the government in their benefice will reimburse you until they decide it is not making enough money and remove the credit.

3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. so the employees can be taxed as well.

4. Elimination of a deduction employers now take for providing Medicare Part D prescription drug coverage to their retirees to the extent that the federal government subsidizes the coverage. This will not take effect until 2013. And here I thought it was a health care crisis why wait until 2013.

5. Doubling the penalty for non qualified distributions from health savings accounts, to 20%, beginning in 2011. More tax.

6. A limit on the amount that employees can contribute to health care flexible spending accounts to $2,500 a year, but the cap won't take effect until 2013.if they don't make the payment, who will? We do.

7. A ban on using funds from flexible spending accounts, health reimbursement arrangements or health savings accounts for the cost of over-the-counter medications, starting in 2011. So the elderly will have to pay out of pocket or starve. That was the mantra of the left, and now is seems to be the rule of the left.

8. Starting in 2013, a 0.9% Medicare surtax will apply to wages in excess of $200,000 for single taxpayers and over $250,000 for married couples. Also, for the first time ever, a Medicare tax will apply to investment income of high earners. The 3.8% levy will hit the lesser of (1) their unearned income or (2) the amount by which their adjusted gross income exceeds the $200,000 or $250,000 threshold amounts. The new law defines unearned income as interest, dividends, capital gains, annuities, royalties, and rents. Tax-exempt interest won't be included, nor will income from retirement accounts. Tax, levy it is all the same, and why try and be successful if the government will take it all away. There is no incentive in communism.

9. A hike in the 7.5% floor on itemized deductions for medical expenses to 10%, beginning in 2013. But taxpayers age 65 and over are exempt from the cutback through 2016. I thought this paln was going to make everything better.

10. A new 40% excise tax, beginning in 2018, on high-cost health plans, levied on the portion that exceeds $10,200 for individuals and $27,500 for families. Did I mention tax.

11. A new tax on individuals who don't obtain adequate health coverage by 2014. The tax is be phased in over three years, starting at the greater of $95, or 1% of income, in 2014, and rising to the greater of $695, or 2.5% of income, in 2016.So if you do not wish to pay for health care or you don't need to buy health care you will be penalized by the government? Yep, you will.

12. Providing a refundable tax credit, once the individual mandate takes effect in 2014, to help low-income families purchase coverage. To be eligible, a person's household income must be between 100% and 400% of the federal poverty level, generally around $11,000 to $44,000 for singles and $22,000 to $88,000 for families. Tax credits is the governments way of saying we will allow you to get back some of the money you are spending, but only until we change our minds. Again, if this was such a crisis way wait until 2014?

13. A nondeductible fee charged to businesses with 50 or more employees if the firms fail to offer adequate coverage. The fee will equal $2,000 times the number of employees, though it won’t count the first 30 workers in that calculation. A business's reason for being, being profit this fee will be passed down to the consumers, lest the business be accused of malfeasance.

here is the answer to the crisis question as to why this will take place down the road a bit. It is because the man-made-god will be in his lame duck presidency and his decisions can't them be challenged.

Thanks again to all who voted for this fellow.


Points taken from Kiplinger.

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