Would "ObamaCare" (Health Care Reform) Tax the Sale of Your Home?

Tax Foundation ^ | Sept. 24, 2010 | Gerald Prante

[Stayfree]

There has been a story and an e-mail floating around for some time claiming that the recent health care reform bill (PPACA/supplemental bill) would impose a 3.8 percent "sales" tax on the sale of every home.

[Stayfree]

To be hit by the 3.8 percent capital gains tax, you first have to be a married couple making more than $250,000 in adjusted gross income or $200,000 if you are single. The capital gain on the home sale must also exceed $500,000 if this is a primary home and you are a married couple ($250,000 for singles).

[Stayfree]

I could not find that this has already been posted, but if this has previously been posted, I apologize.

[E. Pluribus Unum]

My liberal friends tell me not to worry about it, it's only for rich people with real expensive houses.

Of course, that's also what they said about the Alternative Minimum Tax.

[himno hero]

Will they refund losses out of equity? Or is this a one way tax grab? Its great to assume there is a ever upwards spiral in pricing, excepting one thing they are taxing on inflation, thereby reducing the real value of the home owner’s equity.

Lets see how they feel about capital losses... America should get a huge refund from the Obama government!

Worst part? the capital losses are not done!

[edcoil]

They call it a profit tax to stop people from flipping homes.

Actually it is our corrupt government getting a piece of the action.

[Opinionated Blowhard]

This is part of a larger problem. Of course Obamacare is going to tax your house sale. Socialism needs money to keep going. Its a giant Ponzi scheme. It will take and take and take all it can. It will tax everything.

[libertarian27]

It’s a new 3.8% tax on rental income too.

Many rental owners will hit the income threshold to get the 3.8% new tax....how many of them do you think will be able or willing to absorb that expense? Rent’s going Up.

[hauerf]

Wow! There’s a ton of weasel wording in this blog.

[screaminsunshine]

Unless stopped Obama would eventually have a 100% tax on 100% of everything.

[Freedom4US]

Exactly how most new taxes are enacted - firstly on the “rich” folks - so who cares. Sooner rather than later they will ratchet down threshold to include anyone and everyone.

Notice the real question isn’t even addressed, namely whether taxing anybodies house to pay for indigent healthcare is even remotely lawful.

[ThunderSleeps]

...it's only for rich people with real expensive houses.

And the big-government socialists would have us believe this makes it ok. When did it become ok to promote envy, jealousy, and simply penalizing people for success? I seem to remember envy being on a list somewhere...oh yeah, one of the seven deadly sins.

The liberals will say: but they can afford it! Sure, but can we afford the bigger, more liberty-stealing government that results? They can afford it, other people need the help/services provided by government... Right. That whole "From each according to his ability, to each according to his need." idea came from a guy back in the mid 1800s...a guy named Karl Marx. This is not a path we, as a people, want to be treading down...

[The Great RJ]

However would the 3.8% tax on “unearned income” apply to the sale of a business or inheritance? I could easily see that the inheritance of a large farm or ranch might meet the parameters and could trigger double taxation if this “excise tax” is imposed on top of the death tax reinstated by Obama.

[hal ogen]

The statement “First they came for the Jews...” seems to relate to this issue. Anyone who trusts ANY liberal is a fool. You’ll be fleeced by these anti-Freedom creep asshat lib/dims...just wait.

[ANGGAPO]

“We have to pass this bill, so we can read it and find out what's in it.” Don't this sound familiar? And now we are finding out.

[DrC]

“My liberal friends tell me not to worry about it, it’s only for rich people with real expensive houses.

Of course, that’s also what they said about the Alternative Minimum Tax.”

High income people on Medicare have been paying higher premiums for Part B for several years now. But the income threshold historically has been indexed so that only about 5 percent of beneficiaries get taxed (you know the “rich” ones, who can afford it?). But 2 things were changed under health reform.

First, the threshold no longer is indexed, meaning that over time (just like the AMT), more and more people will get hit with the tax (e.g., 15% of Medicare beneficiaries will be paying it by 2019). Second, now those who sign up for Medicare Part D (prescription drugs) ALSO, for the first time, are being charged higher income-related premiums using these same income thresholds that also will NOT be indexed.

By the time today’s young adults hit retirement age, likely everyone is going to be paying higher premiums for Medicare based on their income even though they spent a lifetime paying Medicare payroll taxes. A nanny state ain’t cheap.