The changes called for under the Affordable Care Act assume increased revenue to offset PPACA costs of about $437 billion over ten years. That is a lot of money in new fees, taxes and reduced benefits such as limiting the amount to be placed in a flexible spending account. However, what you don’t hear too often is that nearly half of that total of $437 billion is raised from increased taxes on the “wealthy” or as the President and his staff like to say, millionaires and billionaires. The trouble, of course, is that these taxes are not raised on millionaires, but on upper middle class families that, depending on where you live, can constitute family incomes of union leaders, police officers, teachers, and many other two income families.
Two hundred ten billion dollars ($210.2) of the $437 billion is raised from increasing the Medicare payroll tax by 0.9% on earned income in excess of $200,000 single and $250,000 family and by imposing the new 3.8% investment tax on unearned income for the same group of taxpayers. These taxes are effective in 2013, but here is the kicker, the income levels are not indexed so as time goes by more and more Americans who may not feel wealthy will find themselves part of this prestigious group – think AMT.
While you may not be in this group today or perhaps ever, keep in mind that about 5% of Americans are paying for almost 50% of the cost of health care reform. That sounds like at least a fair share to me.
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