5 New Obamacare Taxes Coming in 2013

Starting next year, five new tax increases will begin to raise $258.2 billion in new revenue over seven years.

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The “fiscal cliff” debate is theater. No one can be sure of what is going to happen come Jan. 1.  President Obama’s 2010 health reform law, however, is certain to change the tax code in 2013. Starting next year, five new tax increases will begin to raise $258.2 billion in new revenue over seven years.

The top tax rates on capital gains and dividends will jump from 15% to 18.8%.  The 3.8% surtax on unearned income (income earned through interest, rents, dividends, annuities, royalties, etc.) will only fall on the wealthiest two percent: households making at least $250,000, or individuals making more than $200,000. The 3.8% surtax is a big adjustment, but the current 15% tax rate is the lowest it’s been since World War II.  If Congress allows the 2003 Bush tax rates to expire, the top rate on capital gains will rise to 23.8%, and the top rate on dividends will leap to 43.4%

A new tax will charge the wealthy to help pay for Medicare’s hospital insurance.  There will be an additional 0.9% tax on earned income in excess of $250,000 for families and $200,000 for individuals to help pay for Medicare Part A, which covers hospital stays, nursing facilities, and hospice care.  In addition to the 3.8% surtax, the hospital insurance tax will raise $20.5 billion in new revenue next year, and $210 billion over the next seven.

Manufactures and importers of certain medical devices will be taxed 2.3% of the price of the product.  Devices will not include retail objects like corrective lenses or hearing aids, but will include products like defibrillators, pacemakers, artificial joints, stents, and those involved in cancer treatments, angioplasty and vascular surgery. More than 800 companies from the powerful medical device industry have protested the tax, which will raise $1.8 billion next year, and $20 billion over the next seven years.

Under current law, Americans get a tax deduction if all their medical expenses exceed 7.5% of what they make (minus exceptions and deductions).  That number will rise to 10% for almost everyone in 2013. Those that are 65 and older get a pass for 3 years.  This tax raises $400 million next year, $15.2 billion over seven years.

33 million workers choose to participate in a Flexible Spending Accounts (FSA), which count certain healthcare expenses not covered by insurance as tax deductible. Employers set the limit at how much employees can take out of their salaries, and most companies set the FSA limit around $5,000.   So if you knew your child was going to need $5,000 worth of braces next year, you could put that much money in a FSA, saving on federal income, Social Security, Medicare, and in some states, state income taxes, while the employer saves on Social Security and Medicare taxes. Under the Affordable Care Act, the government will set a first-ever FSA limit at $2,500.  The average employee contribution today is $1,496, so most people that do use FSAs won’t be affected.  This tax is expected to raise $1.5 billion next year, $13 billion over the next seven years.

It’s worth noting that these taxes represent a tiny portion of federal revenue.  President Obama’s 2013 budget projects that the government will raise around $2.9 trillion next year–these five taxes combined would account for 0.8% of that total.  Nonetheless, if you are wealthy, spend a significant amount of your earnings on healthcare, or manufacture medical devices (it is unclear how the cost will be shared by the consumer), you will see your taxes go up.

136 comments
LeonaStewartHamilton
LeonaStewartHamilton

Due to my medical needs, my husband gets FSA each year in the amount of $3,500. We are a middle-class earnings family. How is it going to benefit us when these tax law changes lessen our ability to aquire the FSA amount that we need each year? The answer, obviously, is that it will not benefit us. Medical devices taxes will get passed on to the consumer, and since I am legally responsible for my elderly mother, and I purchase her wheelchair and other needs, I will also be taxed more for her medical devices that medicare doesn't pay for such as heairing aids. I am on disability myself, having suffered a traumatic brain injury while working as a police officer, subsequent stroke, and I have developed several other health conditions over time that relate back to the original injury. I am on medicare, have an advantage plan, and my husband had to get secondary insurance for me through his employer. I am also retired from my job as a police officer, but my monthly retirement benefit can hardly be considered substantial. These taxes are going to be a hardship on our family.

clearvision
clearvision

Obama supporters won the election. WooHoo congratulations!

Now lets take a closer look at what you won. As you can see from the "hidden taxes" in Obama care, he really does not care if the taxes effect the wealthy, the middle class or the lower class. This unmasked his true intent to get everyones taxes increased to further build the number of people on food stamps and welfare. It also reveals his lack of understanding in economics. The cost of the Obamacare program will far outstrip the money collected here.

I am sure he will be content in growing the defecit by 2+ trillion dollars for the next four years. All we have to do is print more money.

What a hero, he is the man of the year. I am just not sure who's man.

Chosun1
Chosun1

"if you ... manufacture medical devices (it is unclear how the cost will be shared by the consumer), you will see your taxes go up." On the medical devices:  This is one of the silliest taxes ever.  It will get passed along to consumers in slightly higher prices.  That's not the real problem with it.  It does little to raise revenue, bends the "cost curve" of medical care in the wrong direction and, from a social policy standpoint, does nothing of value. 

Ronnie_Matrix
Ronnie_Matrix

@TIME @TIMEPolitics Raising federal taxes is not bad if we also focus on cutting government spending.$16 trillion as a national debt is huge

sacredh
sacredh

I think one of my posts got flagged. It must have offended someone. Imagine that. It's gone.

George
George

This is why we dont need anymore taxes on the American people since this man is taxing us to death and has failed America and Americans with his failed policies of taxing more and wasting more monies into the national debt as well as sending monies to the U.N. , the radical Islamists and communistic countries which must stop altogether . And will cause our money to fail through his failed policies of waste and spending with more and more taxes . So dont vote for anymore or support these failed policies there Republicans or Conservatives . And lets be loyal to God and not mans failed agendas . And seek ye the Lord while he may be found. Call ye upon him while he is near. Let the wicked forsake his way and the unrighteous man his thoughts and let him return unto the Lord for he will abundantly pardon. Except ye repent ye shall all likewise perish. Christ died for our sins according to the scriptures, and that he was buried, and that he rose again the thrird day, was seen of men, and returned to heaven. Repent and believe the gospel to be saved. Sincerely ;

tugsearobin
tugsearobin

Obama will spent the new tax money in a week. He wants credit card with no limits, he needs to listen to what he preached about the debt. 

rainyday995
rainyday995

Well there's the revenue that the Republicans were fussing about....so what's the problem?

Nathan Blaney
Nathan Blaney

I have run out of words to express my hate for Obama and all his policies. I wouldn't trust him to run a lemonade stand, nevermind the country.... we're doomed.

Karen Young
Karen Young

Good questions barb which we won't know the answers to since depr of health & human services are still writing the rules

Tim Tio
Tim Tio

Starting next year, the five new tax increases will also begin to raise the anxiety and pressure of millions of Americans over seven years.

jun_sagal
jun_sagal

@TIME @timepolitics Its good D US having a nice taxation system that really enjoyed by its citizens In d Phls, only d corrupt did njoy it!

Rocking_m
Rocking_m

@TIME @timepolitics "I assure you it's not a tax".

PaulRoy
PaulRoy

These taxes are why we can not let the government mandate what goods and services U.S. citizens have to buy. When everyone receives free health care, it has to be paid for somehow. Unless we stop the mandates, we will continue to be forced to purchase goods and services we don't need or want and there will be more and more taxes forced upon us. Wake up people and do something. Passing a mandate to the Constitution would be a step in the right direction. www.mandateamendment.com

SewerRat2
SewerRat2

@TIME @timepolitics "I assure you it's not a tax".

cour_jester
cour_jester

@TIME I say good it helps me ,its better than drop dead

Barb Near
Barb Near

How are these taxes going to be collected? When you file your income tax? When a medical device is implanted? Will it prevent a person from getting medical treatment if you do not have the money up front for the tax?......................and so it begins...a full year of tax increases before Obamacare is available for use.

DBorgesCPA
DBorgesCPA

@Neyda_Borges Who you tellin? Child please!

fitty_three
fitty_three

paulejb is peeing on Swampland again.

Maybe he'll rally the Teabaggers and together, they'll take over the world!

fitty_three
fitty_three

I'm good with these taxes.

We really need UHC, not a patchwork quilt band-aid sort of a thingie, but I do know who to thank for that.

But we won't mention their name.

sacredh
sacredh

I'm Jumpin' Jack Flash. I'm aghast gast gast.

.

That one had to come out.

jsfox
jsfox

@George being taxed to death? Would you please do me the favor of listing all the tax increases recv'd in the past four years under Obama.

jsfox
jsfox

@tugsearobin oh brother, it would great if you had a clue as to what you are talking about.

superlogi
superlogi

@rainyday995 The problem comes when you have to pay it back.  Oh yeah, that's right, "you" won't have to, but your children will.

jsfox
jsfox

@Nathan Blaney we survived Bush, you will survive Obama. And so far he saved the country from a depression, saved the US car industry and saved consumer 1.5 billion dollars last year thanks to healthcare reform. If this is doomed I'll take it.

HudsonValleyTim
HudsonValleyTim

The perhaps you should move to another industrialized country that doesn't have some form of universal healthcare.  Oh, wait, there aren't any.

DonQuixotic
DonQuixotic

@53_3 

More than likely they would just stand around in dumb costumes and whine about things they know nothing about, and make commutes through DC for people like me even worse.  

kbanginmotown
kbanginmotown

@Paul,nnto I thought it was funny! You must have missed my earlier post, Paul, where I linked to this picture to suggest a 1K Words...

Say, maybe we could hijack this thread and turn it into a "1000 Words"

Here's my entry: (Obama taking Romney's concession phone call)

Obama: " Mitt...'cuse me, Mitt? You're throwing in the...what? Trowel? Vowel? Mitt, you're gonna have to speak up, man, there's a party going on in here..."

Paul,nnto
Paul,nnto

Fine, nobody but me thought BHO taking Willard's concession call was funny.

BobJan
BobJan

@jsfox Only those that listen to FOX are taxed to death. They all have the fox tattoo on their ankle.

superlogi
superlogi

@jsfox Yeah, I recall a time when the m0r0n suggested increasing taxes would stall the economy and that massive debt increases were unpatriotic.  But, that was then and the article is talking about the future.

La_Randy
La_Randy

@jsfox Bearing false witness against another means nothing to George.

fitty_three
fitty_three

@DonQuixotic

I'm sure that Hannity will work hard to make sure that their numbers are larger than they appear. ;)

Sue_N
Sue_N

@Paul,nnto @Sue_N @kbanginmotown Ah, Denton. As great a music town as Austin, though always in Austin's shadow.

Our rain returned earlier this year, but stopped a few months ago. The weather gurus are worried we might go back into drought (although, really, some parts of the state never got out). Now if we could just get the folks in Dallas to quit planting St. Augustine lawns …

But, hey, it appears someone heard my gripe about the temps. We're now heading down to near freezing. God love my screwed-up Texas.

Paul,nnto
Paul,nnto

@Sue_N @Paul,nnto @kbanginmotown Of course in all seriousness Minnesota, like much of the country, is in a drought.  No snow to speak of last year and a largely dry summer. 

Where we cross the aforementioned Mississippi, about 600 yards I estimate might be wider, it was lower than I have ever seen it this summer. Any liquid from the sky is welcome.

As for the luckily married Mr Sue_N....never complain about warm weather. I have been lobbying my family for years to move Christmas (which theologians agree is an arbitrary date) to July :).  

Just like the great Denton Texas group Brave Combo suggests. 

Sue_N
Sue_N

@Paul,nnto @Sue_N @kbanginmotown Well, you know, snow negates global warming. ;)

There's just something inherently wrong in hanging Christmas lights in shorts and t-shirts. And when hubby makes his Santa appearances, he's miserable in the suit.

I remember when we used to have four actual seasons down here, instead of just "summer" and "waiting for summer."

Paul,nnto
Paul,nnto

@Sue_N @Paul,nnto @kbanginmotown What global warming indeed- we just walked back from brunch. Just across the Mighty Mississippi, maybe a mile and a half total, and I bet I had an inch of snow on my hat brim. 

Looking at 6-10 inches today.

So, in short, give me the 80 degrees!  So jealous. 

Sue_N
Sue_N

@Paul,nnto @kbanginmotown @Sue_N So if I'm ever in Minnesota, I know whose house I'm stopping at for supper.

I'm just waiting for it to cool down here enough to make another pot of venison stew. I've got the last bit of meat from a deer in the freezer begging to be used, but not while it's still 80 degrees.

Global warming? What global warming?!

Paul,nnto
Paul,nnto

@kbanginmotown @Paul,nnto @Sue_N The house smelling like a smokehouse is a feature not a bug kbang. That sounds really good. I'm ordering up some more tasso and andouille to give my brother for Christmas. Okay some for me too. 

I like making stocks and always have on hand, that is to say frozen, chicken (both regular and brown) and shrimp stocks. Last night I used the liquid from the tongue I made a while back. Tacos de lengua, the gift that kept on giving!

kbanginmotown
kbanginmotown

@Paul,nnto @kbanginmotown @Sue_N Sounds delicious, Paul!

This past Wednesday, I made a Smoked-Turkey Gumbo with Andouille Sausge over rice. (We'd frozen our leftover Thanksgiving turkey. and I simmered it most of Wednesday to make the stock. Tasty, but the house smelled like a smokehouse until yesterday.)

I like your idea of pairing a tart arugala salad together with the jumbalaya. Got to remember this... 

Sue_N
Sue_N

@Paul,nnto @kbanginmotown @Sue_N Oh, man, pnnto, you're making me hungry!

Sadly, we won't be able to pump much into the economy this year. But we'll make up for it by pumping many Southern calories into each other. ;)

Paul,nnto
Paul,nnto

@kbanginmotown @Sue_N @Paul,nnto I did miss that kbang-I'm so bad at 1000 Words I must have skipped right over it. 

I like both your's and Sue's.

 After spending much of yesterday and some of today pumping the economy (read: Christmas shopping) and the last few hours in the kitchen I'm too tired to try, and fail, to top them.

Dinner tonight is a chicken and tasso jumbalya, cheese rolls, and an arugala salad dressed with a garlic mojo olive oil and lime.