Today, Barack Obama is celebrating a critical moment in his rise to the presidency. It's the five-year anniversary of when he pledged not to raise taxes on families making less than $250,000 a year. Let's go back to September 12, 2008.
Then-Senator Obama said, "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
That's quite the promise and one that's even more difficult to keep when you throw a new $1 trillion dollar health care entitlement into the mix. Americans for Tax Reform posted today a list of taxes that will put the American middle class into the crosshairs.
First, there's the Obamacare individual mandate tax, which target six million families directly. There's also the Flexible Spending Account Tax, which puts "30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family's basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years." And there are more items to this butcher's bill.
1. Obamacare High Medical Bills Tax: Before Obamacare, Americans facing high medical expenses were allowed a deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now 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.
2. Obamacare Medicine Cabinet Tax. Thanks to Obamacare, since January 2011 Americans have not been able to purchase non-prescription, over-the-counter medicines from their Flexible Spending Accounts or Health Savings Accounts. Families often rely on over-the-counter medicines to get themselves through the colds, fevers, and aches and pains of daily family life.
3. Obamacare Tax on Union Member and Early Retiree Health Insurance Plans: Obamacare imposes a new 40 percent excise tax on high cost or "Cadillac" health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans.
4. Obamacare 10 Percent Excise Tax on Indoor Tanning: This Obamacare tax increase has the distinction of being the first to go into effect (July 2010). Slipped into the bill by Sen. Harry Reid (D-Nev.) behind closed doors in the middle of the night, this tax hike replaced the planned Obamacare "Botax" on cosmetic surgery. This petty, burdensome, nanny-state tax affects both the business owner and the end user. Making matters worse: According to a Treasury Inspector General for Tax Administration report, the Obama IRS didn't bother to issue compliance guidelines until three quarterly filing deadlines had passed: "By the time [IRS] notices were issued, tanning excise tax returns had been due for three quarters." This is yet another sign that the Obama administration is ill prepared for Obamacare implementation.
5. Obamacare HSA Withdrawal Tax Hike: In effect since 2011, this Obamacare levy increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
So, it seems Obamacare makes it impossible for the president to keep the famous tax pledge he made in the last few weeks of the 2008 election.
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