Wednesday, December 3, 2014

A Cadillac (Tax) For Everyone

◼ link - Sally Pipes/Forbes

While campaigning for the White House, President Obama promised to cut taxes for 95 percent of Americans. As he put it, “In an economy like this, the last thing we should do is raise taxes on the middle class.”

And then, the president went ahead and raised taxes on the middle class, thanks to Obamacare. Starting in 2018, Americans with high-cost health insurance through their employers will have to pay a 40 percent excise tax on their policies.

The intent of this so-called “Cadillac” tax was to discourage people from selecting costly insurance policies. But the rest of Obamacare — with its many mandates — certainly does its darnedest to raise the cost of insurance.

So Obamacare may require ordinary Americans to pay ever-greater sums for health insurance — and then penalize them for following the law.

...four in five large employers are changing their health plans. Some are requiring greater employee cost sharing, while others are removing dental and vision benefits.

In some cases, they’re replacing their generous health plans altogether. For their employees, that decision amounts to a pay cut — of up to $6,150, according to AHPI.

Of course, companies could increase workers’ taxable income to make up for this effective cut in their compensation. But if they were to do so, employees would be subject to additional payroll and income taxes. According to the AHPI study, some 12 million workers would face an additional $1,050 in taxes every year.

The government is counting on employers to try to dodge the Cadillac tax. The Congressional Budget Office expects the tax to raise $120 billion between 2018 and 2024 – 25 percent of it directly and 75 percent from increases in payroll and income tax revenue....



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