Today marks the day the United States of America declared independence from Great Britain. And with that declaration, we put an end to unfair taxation without representation. Ironically, the people of this country still struggle against loss of freedom and unfair taxation. But not against the British tyrant, King George. Today, we struggle against loss of freedom at the hands of our own petty tyrants and government bureaucrats. And unfair taxation from the looming Affordable Care tax.
Congress passed the Affordable Care Act three years ago by the narrowest of margins. And the majority of this ponderous law hasn’t even gone into effect yet.
But brace yourself.
In January 2014, a massive new tax on health insurance will hit. This new tax will result in higher healthcare costs for individuals, families, and employers.
On his national tour promoting the Affordable Care Act, President Obama repeatedly stated, “If you like your current health insurance plan, you can keep it.” Well, my answer to that is, “you can keep it.”
In fact, the IRS will be thrilled if you keep it. Especially if you already have a plan with good benefits.
You see, the IRS is unwilling to let one penny slip through its hands. It is obsessed with the idea that there are people out there receiving thousands of dollars’ worth of health insurance as an employment benefit…and they don’t pay a nickel of income tax on it.
But that’s all about to change.
Beginning in 2014, these folks will pay hefty taxes on their benefits. Thanks to the new, “unaffordable” healthcare law.
To be specific, the new tax will hit employer-sponsored plans valued at over $10,200 for individuals and over $27,500 for families. If you have one of these so-called “premium” plans, you will face an additional 40 percent tax on any benefits you receive over these limits.
Obamacare advocates sold the new tax as being exclusively for so-called “Cadillac coverage.” But according to a non-profit advocacy group, the new tax will increase premium costs over a 10-year period for individuals by an average of $2,150. And for families, it will increase costs an average of $5,080. Small business will bear the brunt too. They will pay an average of $2,760 more for single coverage over a 10-year period. And they will pay an average of $6,830 more for family coverage. That doesn’t sound like a very “pro-family” policy to me.
If you don’t want to pay more taxes, Obamacare advocates say just pick a less expensive plan…with fewer benefits.
In fact, part of the idea of the new tax was to coerce employers to offer lower-cost health insurance to their employees. These plans’ benefits are non-taxable. But Obamacare advocates think employers–with all the money they save offering cheaper insurance–will then pay higher salaries to their employees instead. Then, the IRS will happily tax your “extra” income at ever-higher marginal rates.
So, either way, the IRS makes out. And you wind up with less take-home pay and/or fewer health benefits.
Of course, these same companies just imposed massive layoffs due to the prolonged recession. Do you really think they will start paying employees higher salaries with the money they saved by offering skimpier insurance plans?
The new health care law already forced many businesses to cut back on hourly employees to keep insurance costs down. Does it sound like these companies are getting richer by performing a few fancy accounting tricks, like the government habitually does?
The sad reality is, come January 2014, health insurance premiums may be expensive for many different reasons. Not just because they offer good coverage.
You may be one of those forced to pay higher premiums even for a “standard” plan. You see, the IRS does not tax you on what you get. But on what you pay for it! The IRS does not consider the actual value of the coverage, but only what it costs.
This reminds me of what my father used to say about those who “know the cost of everything, but the value of nothing.” Throw the government bureaucrats who devised the devilish details of Obamacare into that category.
As I said earlier, this new tax on “premium” insurance plans is actually meant to pressure everyone to choose lower-cost plans.
You may wonder why anyone would consider a plan with fewer benefits “better” healthcare.
And I do too.
And we are not alone.
A new poll by CNN found that the majority of Americans (54 percent) oppose Obamacare. And only 43 percent favor it. Among older Americans, who have the most experience with healthcare, only 31 percent support the new law. Nationally, Obamacare has the majority of support only in urban areas and in the Northeast.
Yes, today should have us thinking about liberty. And our struggle against unjust taxation.
U.S. Presidents Thomas Jefferson, William Henry Harrison, and Abraham Lincoln cautioned about creating an urban “mobocracy.” This term describes a populace willing to trade freedom and independence in exchange for dependency and security. Benjamin Franklin cautioned that those willing to trade away freedom for a little temporary security would–in the end–have neither.
And when it comes to your healthcare, don’t expect to drive a “Cadillac” or a “Lincoln” without paying an extra 40 percent for it. And that’s not just pennies.
1. “Health Insurance Tax,” American’s Health Insurance Plans (www.ahip.org)
2. “Poll: Do you support or oppose the health care law?” CNN (www.cnn.com), 5/27/2013