Huge Decisions Loom for Lawmakers on Obamacare Taxes

obamacare (1)

 

One of the biggest calling cards of the Republican Party for the last several years, including President Donald Trump, has been to repeal the Affordable Care Act, also known as Obamacare. Although Obamacare has faced much opposition throughout its existence, recent polls suggest that most Americans don’t want it repealed, especially if there is nothing to replace it.

Still, republican lawmakers are undeterred in their efforts to scrap it. However, there are several significant taxes issues that must resolved, namely which taxes should they repeal. Make no mistake, republicans hate the Obamacare taxes, but some feel that they should keep them to help pay for their replacement plan. The taxes in question include:

  • Net Investment Income Tax – this would automatically eliminate the 3.8 percent tax on capital gains.
  • Health Insurance Tax – Health insurance providers are forced to pay this annual fee based on their market share.
  • Medicare Surtax – This tax on the wealthy created an extra $7.3 billion for the government, so eliminating it would help anyone earning more than $200,000 (single filer) or $250,000 (joint filer) a year.
  • Cadillac Tax – this is set to begin in 2020, but many lawmakers from bot sides oppose it, as it would be a huge tax on those with high-cost health plans, including many democratic-backed unions.
  • Prescription Drug Tax – repealing this would help businesses that make or import branded prescription drugs and have to pay huge fees for doing so.
  • Tanning Tax – this contributed to many tanning salons going out of business
  • Medical Expenses Deduction Cap – this raised the threshold for deducting medical expenses from 7.5 percent to 10 percent.
  • Flexible Spending & Health Savings Accounts – these placed lower limits on the amounts people can add to them and raised the penalties for using the money on anything other than medical expenses.
  • Mandate Penalties – these are the penalties that people must pay if they choose not to have health insurance.

Each of these taxes could en up on the chopping block, but it remains to be seen which ones will be officially repealed and which ones will survive.

http://thehill.com/policy/finance/317880-gop-faces-big-decision-on-obamacare-taxes

/GROCO
Posted in

How to Handle Tough Decisions

Everyone has to make decisions in life and many of those decisions can be very difficult to make. The same can be said for businesses. Decision makers in the business world face a lot of tough choices and some of these choices can actually make or break their companies. So how do they make tough…

Using a Tax Shelter? IRS Says Beware

People look for many different ways to save on taxes, or even to avoid paying some of the taxes they really do owe. However, despite taxpayers’ best efforts, the IRS is always on the prowl and if you’re using unscrupulous means to avoid paying taxes there is a good chance you will get caught, including…

What Is Section 1202 Stock?

The Protecting Americans From Tax Hikes Act of 2015 (PATH Act), which was signed into law late last year, finally made several temporary tax breaks permanent. Among the tax breaks included is the Small Business Stock Gains Exclusion, known as Section 1202. So what is the Small Business Stock Gain Exclusion? Section 1202 is designed…

Some of the Most Amazing Tax Deductions Ever

At GROCO, we have been doing this for more than 50 years. That means we’ve heard just about every crazy tax story you can imagine. With tax season now officially in full swing we thought we would share some of the craziest tax deduction stories we’ve ever heard; and they’re all true. A gas station…