Health Law Brings A ‘Host Of New Taxes’ And Billions In Tax Credits
The Washington Post/Fiscal Times: Tax credits and other breaks -- including $50 billion a year in subsidies for low-income people to buy insurance under the new health law -- were "worth more than $1 trillion to recipients last year. That's more than the government spent on Social Security, and nearly enough to balance the federal budget." These and other so-called "tax expenditures" could total $3 trillion by 2020. Tax policy expert Leonard Burman said, "Budget wonks rail about limiting entitlement programs like Medicare and Social Security, but a large and growing share of federal spending is off the radar screen. Tax expenditures are on autopilot" (Andrews and Montgomery, 5/2).
Los Angeles Times: Congress plans to pay for the health overhaul with $575 billion in Medicare cuts as well as "a host of new taxes. Many are on industries, such as drug makers and insurers. And notwithstanding charges from some critics, most Americans will not see a tax hike." A Times Q&A says, "Individual Americans who earn more than $200,000 and couples earning more than $250,000 a year will see the most immediate effect," such as a new 3.8 percent Medicare tax on their investment income. About 4 million people would also face a penalty for failing to buy insurance (Levey, 5/1).
U.S. News & World Report: As health reform moves from the legislative to the regulatory arena, "the 2,000-plus page law will be dwarfed by a regulatory flood of epic proportions. Changing the rules for nearly one fifth of the U.S. economy will keep small armies of bureaucrats busy for years. That's especially true within the U.S. Department of Health & Human Services (HHS), which has primary implementation oversight for health reform." It reports on various provisions and when they will occur" (Moeller, 5/2).
American Medical News: The legislation will affect physicians' payments and practice styles, but it will also impact their practices, among other small businesses. "Companies that have fewer than 25 full-time-equivalent employees with average wages of less than $50,000, and that pay at least half of individual coverage costs, will be eligible for credits of up to 35% of their share of premiums." That could mean, at least "in the short term, there could be tax credits that might make it a little easier to insure [a practices'] staff -- and cut overall costs" (Elliott, 5/3).
Kiplinger's Personal Finance/Washington Post: A non-tax-related health law provision will allow dependents to remain on parents' insurance plan up to age 26. But, it's unclear who would immediately benefit. "Generally, early implementation of the new rule applies only to children who would otherwise be dropped from their parents' policies before the new law kicks in. To qualify for this early effective date (June 1 for many of the companies), children must be currently covered under their parents' policies" (Lankford, 5/2).