Skip to comments.Braces for the Kids Just Got More Expensive: Obamacare Tax Hike Case Study
Posted on 01/11/2013 10:34:34 AM PST by grundle
In 2013, the tax increases in Obamacare will increasingly conspire against kitchen-table family healthcare decisions.
As just one example, below are some of the taxes that will impact the purchase of dental braces:
Obamacare Medical Device Tax: As of Jan.1, Obamacare imposes a new tax of 2.3 percent on medical device manufacturers, including those who make dental braces. The tax is imposed on gross sales -- even if the company does not earn a profit in a given year. While the tax will be paid to the IRS by the manufacturer, the tax will be passed along as a higher cost of the product, ultimately to be borne by the parent buying the braces for their child. With the cost of braces being as high as $7,625 this new tax could raise the cost of these braces by $175.
Obamacare Flexible Spending Account Cap: As of Jan. 1, the 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their familys basic medical needs face a new government cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) A parent looking to sock away extra money to pay for braces would find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars. Needless to say, this tax will especially impact middle class families.
Obamacare Haircut to the Medical Itemized Deduction: Faced with higher prices for braces and a reduced ability to pay for them with their FSA, parents might decide to deduct the cost of braces on their tax returns. Unfortunately, Obamacare makes this harder, too.
Before Obamacare, Americans facing high medical and dental expenses were allowed a deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). As of Jan. 1, Obamacare imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income.
According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. Almost all are middle class. The average taxpayer claiming this deduction earned just over $53,000 annually. ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 - $400 per year. To learn more about this tax, click here.
This is just a small example of how a simple, everyday, kitchen table decision has been fundamentally altered by the tax hikes in Obamacare. It does not even take into account the indirect effects of the rest of the tax hikes in the law, which will reduce family income and kill jobs.
Has there ever been a government project or program which came in under budget or resulted in cost savings? I never get tired of this quotation: government is best which governs least.
Learn that EVERYTHING can be EDUCATED as “health.”
They are attemtping Collateral Transformation. The poor downgraded US debt, is to be secured on the shackled backs of the productive.
b-b-b-but only the rich are going to pay higher taxes right???
I will not raise your taxes one dime. B Hussein Obama 2007
“...I will not raise your taxes one dime. B Hussein Obama 2007....”
It’s OK for muslims to lie when it furthers their cause.
The tax also applies to, already expensive hearing aids, which will directly affect me if I ever have to buy new ones again. I got a new pair in 2012 for $8200 - Illinois, where I live, already slaps a sales tax on them.
Along with every other aspect of the Affordable Care Act this is just outright THEFT!
Those out there who are small business owners will understand me in this...now my HSA will be limited to $2500/yr. That will cost me $$$.
My kids’ braces will now cost me an extra $175 each/yr.
Due to health care premiums going up 40% on average, just to afford to “live”, I’ll have to jack my high deductible from $15,000 to $25,000 just to have the same premium.
Ya feel me?
This tyrant is a demonic bastard.
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