by the Left Coast Rebel
Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
ROUNDUP:
- Think Progress notes with glee that Sec. 107 outlaws treating domestic violence as a pre-existing condition. Do you even know what to think of that?
- The Weekly Standared weighs in saying that HR 3962 pays for abortions, cuts medicare, raises taxes + fees + the deficit. What’s not to love?
- The Washington Times reports that the House unveiling ceremony for HR 3962 was closed to the public. I repeat, it was closed to the public. Vistitors had to be listed on a pre-approved list.
- Debate begins next week. Boy do I have the list for you, more on that later.
- American Spectator points out that HR 3962 includes a mandate that forces individuals to purchase insurance or pay a tax + the employer mandate. It also includes government-run insurance exchanges. AS also shows that the bill will add a huge new section to the federal tax code: PART VIII: HEALTH CARE RELATED TAXES. Can you imagine this ambiguous section of the code not changing every year? Your liberty is at stake.
UPDATE: Reader Brett Thompson wrote up a great summary of HR 3962, he attempted to go through the 1800 + page bill. He writes :
I just went to skim 1800 pages of HR 3962 Affordable Health Care for America Act.
Go here. (Sign up on this site, track and vote here on Bills)
I got lost after the first page and the references to section and subsections is endless. Has any one person in Congress really read all 1800+ pages? What happened to the paper reduction act? What happened to bills we were going to be able to read? Title 26 of the US Code of Federal Regulations (IRS) started with a small amount of pages (compared to this) and now this mess consists of 16,845 pages according to the US Government Printing Office. If reading some of HR 3962 isn’t enough for you, go read the monster that was created in 1939 with only 504 pages. Click here for the original.
I’ll let the mathematicians figure out what kind of growth that is since 1939, then add that same growth to HR 3962.
I created a static page with his entire letter to me, read it here.