Lost in all the hyperbole from the Democrats about the American Health Care Act, is the fact that it will gut Obamacare taxes to the tune of nearly 1 trillion dollars, according to the White House.
Though most the changes won’t be implemented until 2018, at the earliest, here is an overview of some of the major taxes slated for elimination and cuts.
Individual mandate tax: If you can afford health insurance but choose not to buy it, under the Affordable Care Act, or ObamaCare, you must pay a fee called the “individual shared responsibility payment.” The GOP House bill would abolish the individual mandate tax – which an estimated 8 million Americans pay every year. According to HealthCare.gov, that translates to at least $695 per adult, and often more for higher-earning households. The GOP bill would, however, allow insurance companies to impose a surcharge in some cases for lapsed coverage.
Employer mandate tax: Mid-sized and large employers currently must offer health insurance to most full-time employees or face penalties. Combined, the individual mandate tax repeal and the employer mandate tax repeal are estimated to offer a $270 billion tax cut.
Medicine cabinet tax: Nearly 20 million Americans under ObamaCare were prohibited from using their pre-tax flexible spending account and Health Savings Account dollars to purchase non-prescription, over-the-counter drugs. The AHCA abolishes the $6 billion tax.
Flexible spending account tax: Close to 30 million Americans were hit with a tax on their flexible spending accounts and 20 million more on their Health Savings Accounts. Abolishing both comes out to be $20 billion cut, according to Americans for Tax Reform.
Chronic care tax: Individuals with high health care costs can deduct those expenses, but the ACA increased the threshold from 7.5 percent of Adjusted Gross Income to 10 percent, according to the National Taxpayers Union Foundation. Abolishing this tax saves Americans $126 billion.
Excise tax: Excise taxes are paid for specific goods or services. Under ObamaCare, a 10 percent tax was tacked on to small businesses with indoor tanning services, which raked in about $600 million a year. The GOP House plan reverses this.
— Advertisement —
Health insurance tax: The health insurance tax is not imposed at a specified rate but rather set annually by Treasury to raise a specified amount of revenue. Abolishing it will be a $145 billion tax cut.
Prescription drug tax: Drug companies hit the jackpot in the House-passed health care bill. They had been pushing to eliminate a tax on prescription drugs. An analysis by the Joint Committee on Taxation estimated that over a decade, repealing the prescription drug tax would cost $25 billion