Taxes hidden in the Health Reform Bill
As much as I have tried to stay out of politics because I view most of it as idiots bickering over which pork barrel project is going through, I decided to take a look at this infamous healthcare bill. H.R.3962 "Affordable Health Care for America Act" is a rather long bill that you can actually view here in it's entirety which was passed almost two months ago. As I'm currently enrolled in a tax course I wanted to take a look a the specific taxes that have been added that were buried in the bill, and how they may affect you and I.
I'll go with a list as I think it's much easier to read and get across points than a block of text. For the people who don't understand taxes I'll try to make them more understandable. For starters AGI, or adjusted gross income, is what you make in a year (from ALL income sources) subtracted by exclusions and deductions. Exclusions are typically government tax breaks (think 401(k) and traditional IRA's - you don't have to pay tax on the money put in there), while deductions arise from certain expenses throughout the taxable year (think marketing expenses).
We'll start with the first mention of actual tax numbers in the article, which begins on page 297 of the 1900 page article.
- Page 297 - Tax on individuals if you do not have insurance or insurance which is not good enough - 2.5% of AGI.
- Page 310 - Tax on companies over 50 people who do not have insurance for all people - $100 each day of non-conformance, 30 day grace period for company to correct.
- Page 313 - Tax on same companies as #2. This is an ADDITIONAL tax of 8% of each individual's wages that are not covered.
- Page 337 - Tax on individuals who have more than $1 million AGI other than corporations - 5.4% flat rate.
- Page 339 - Tax on medical devices of 2.5% for the first sale.
Yes, there are limitations and exceptions to these rules of which one of the most interesting is that people who are recognized as part of a religious sect as determined by 1402(g), as long as your sect conscientiously opposes public or private insurance due to several reasons you can read here, are exempt from said tax.
Number four blew my mind as well - more taxes for people who make more money without causation. Number five - I'll probably have my father blog about that one, as it could cause some problems for his field (check out his blog at shawntolan.com/blog).
Bottom line is if you do not have healthcare insurance, it is now required (and you will be taxed if you don't have it!) - so more money out of your pocket if you chose not to buy health insurance previously. They will in effect tax you the exact same amount of money that the national average premium would be. For the rest of the taxes, it may not seem like much to worry about from an individual perspective. What you don't see behind the scenes though is that these taxes are added in to the costs of goods and then passed on to consumers, almost ALWAYS.
Hope this article shed some light on the hidden taxes input into our IRS tax code.

