The re-election of President Obama means Uncle Sam is only going to grow larger. As the new year arrives, Americans are likely to see with their own eyes the consequence of their choice of chief executive as health care costs escalate thanks to Obamacare.
Provisions of the law that take effect in the new year will reveal the true price tag of the president’s signature health care system in the form of five new taxes. Starting Jan. 1, a 2.3 percent medical device tax will be imposed on the miracles of modern medicine such as heart pacemakers, stents, prosthetic joints and diagnostic scanners. The levy will apply to sales, not profits, so startup firms that might be just breaking even could be pushed into the red by Obamacare. With 80 percent of medical device companies employing fewer than 50 people, the tax is a disincentive for small firms to stay in business — exactly the opposite of the effect needed to jump-start the nation’s flagging economy.
Obamacare will raise the threshold for the tax deductibility of medical bills from 7.5 percent of adjusted gross income to 10 percent, making it harder to write off the cost of health care. Pre-tax flexible spending accounts, which 24 million consumers rely on to pay for medical bills and currently have no federally imposed limit, will be capped at $2,500. These two provisions mean a greater share of families’ income must be devoted to health care, contrary to the promises Democrats made when selling the plan to the public in 2010.
Several other scheduled tax increases are contingent upon negotiations between the president and Congress over the looming “fiscal cliff.” Obamacare is set to raise the capital gains tax rate from 15 percent to 20 percent and dividend rate from 15 percent to 39.6 percent. Families and small-business owners earning more than $250,000 will pay an additional 0.9 percent Medicare payroll tax.
The health care overhaul calls for a $63 per person fee to cover the cost of coverage for individuals with pre-existing medical conditions. Insurance companies forced to foot the bill are expected to pass the cost along to an estimated 190 million Americans in the form of higher insurance premiums. Obamacare even exacts a price on freedom of religion. Supreme Court Justice Sonia Sotomayor on Wednesday turned down craft retailer Hobby Lobby’s request for a stay on the health care law’s requirement that companies pay for abortion pills, regardless of whether that violates the owner’s moral code.
As much as Mr. Obama wishes to prove the liberal proposition that big government knows best, the coming tax increases are likely once again to prove otherwise. Obamacare will extract tax dollars from taxpayers nationwide and funnel them into federal coffers in Washington. From there, legions of faceless bureaucrats in cushy offices will decide who gets health care and how much. The new year will bring Americans a very clear lesson in the shortcomings of a big-government program they opted for with the re-election of Mr. Obama. As their wallets get lighter, it’s a lesson they likely will regret.
The Washington Times
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