Is Obamacare the largest tax increase in American history?

[Vince G, CSN MFT]

Sounds like it.

Not even close actually.

[Soul Crusher]

Not even close actually.

LOL 

Typical 95er right there. 

[Soul Crusher]

[Vince G, CSN MFT]

LOL 

Typical 95er right there. 

Fuck you....this law has a lot more bark than bite and there have been many other laws passed....some recently that cost more

[Soul Crusher]

Fuck you....this law has a lot more bark than bite and there have been many other laws passed....some recently that cost more

Name one higher tax increase than MugabeCare? 

[Soul Crusher]

[ Invalid YouTube link ]

[Soul Crusher]

ObamaCare and the Power to Tax

'Judicial tax-writing is particularly troubling. Taxes have never been popular, see, e.g., Stamp Act of 1765.'.


Via WSJ

Supreme Court Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito dissenting from the majority opinion that upheld most provisions of the Affordable Care Act on Thursday:
 

The provision challenged under the Constitution is either a penalty or else a tax. Of course in many cases what was a regulatory mandate enforced by a penalty could have been imposed as a tax upon permissible action; or what was imposed as a tax upon permissible action could have been a regulatory mandate enforced by a penalty. But we know of no case, and the Government cites none, in which the imposition was, for constitutional purposes, both. The two are mutually exclusive. Thus, what the Government's caption should have read was "ALTERNATIVELY, THE MINIMUM COVERAGE PROVISION IS NOT A MANDATE-WITH-PENALTY BUT A TAX." It is important to bear this in mind in evaluating the tax argument of the Government and of those who support it: The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.



Former solicitor general Paul Clement on the legal implications of the Supreme Court decision. Photo: Associated Press
.
.
In answering that question we must, if "fairly possible," construe the provision to be a tax rather than a mandate-with-penalty, since that would render it constitutional rather than unconstitutional (ut res magis valeat quam pereat). But we cannot rewrite the statute to be what it is not. "[A]lthough this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . . . or judicially rewriting it." In this case, there is simply no way, "without doing violence to the fair meaning of the words used," to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.

Our cases establish a clear line between a tax and a penalty: "[A] tax is an enforced contribution to provide for the support of government; a penalty . . . is an exaction imposed by statute as punishment for an unlawful act." In a few cases, this Court has held that a "tax" imposed upon private conduct was so onerous as to be in effect a penalty. But we have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress' taxing power—even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty. When an act "adopt the criteria of wrongdoing" and then imposes a monetary penalty as the "principal consequence on those who transgress its standard," it creates a regulatory penalty, not a tax.

So the question is, quite simply, whether the exaction here is imposed for violation of the law. It unquestionably is. The minimum-coverage provision is found in [the Affordable Care Act's individual-mandate provision], §5000A, entitled "Requirement to maintain minimum essential coverage." (Emphasis added.) It commands that every "applicable individual shall . . . ensure that the individual . . . is covered under minimum essential coverage." (emphasis added). And the immediately following provision states that, "f . . . an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is hereby imposed . . . a penalty." (emphasis added). And several of Congress' legislative "findings" with regard to §5000A confirm that it sets forth a legal requirement and constitutes the assertion of regulatory power, not mere taxing power. . . .
 
We never have classified as a tax an exaction imposed for violation of the law, and so too, we never have classified as a tax an exaction described in the legislation itself as a penalty. To be sure, we have sometimes treated as a tax a statutory exaction (imposed for something other than a violation of law) which bore an agnostic label that does not entail the significant constitutional consequences of a penalty—such as "license" or "surcharge." But we have never—never—treated as a tax an exaction which faces up to the critical difference between a tax and a penalty, and explicitly denominates the exaction a "penalty." Eighteen times in §5000A itself and elsewhere throughout the Act, Congress called the exaction in §5000A(b) a "penalty." . . .


Judicial tax-writing is particularly troubling. Taxes have never been popular, see, e.g., Stamp Act of 1765, and in part for that reason, the Constitution requires tax increases to originate in the House of Representatives. That is to say, they must originate in the legislative body most accountable to the people, where legislators must weigh the need for the tax against the terrible price they might pay at their next election, which is never more than two years off. The Federalist No. 58 "defend[ed] the decision to give the origination power to the House on the ground that the Chamber that is more accountable to the people should have the primary role in raising revenue." We have no doubt that Congress knew precisely what it was doing when it rejected an earlier version of this legislation that imposed a tax instead of a requirement-with-penalty. Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry.
 
Finally, we must observe that rewriting §5000A as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population. Perhaps it is not (we have no need to address the point); but the meaning of the Direct Tax Clause is famously unclear, and its application here is a question of first impression that deserves more thoughtful consideration than the lick-and-a-promise accorded by the Government and its supporters. The Government's opening brief did not even address the question—perhaps because, until today, no federal court has accepted the implausible argument that §5000A is an exercise of the tax power. And once respondents raised the issue, the Government devoted a mere 21 lines of its reply brief to the issue. At oral argument, the most prolonged statement about the issue was just over 50 words. One would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.
 
A version of this article appeared June 29, 2012, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: ObamaCare and the Power to Tax.

[Vince G, CSN MFT]

Name one higher tax increase than MugabeCare? 

I'll Do Better
Past

1. Revenue Act of 1942: 5.04 percent of GDP;
   
    2. Revenue Act of 1961: 2.2 percent of GDP;
   
    3. Current Tax Payment Act of 1943: 1.13 percent of GDP;
   
    4. Revenue and Expenditure Control Act of 1968: 1.09 percent of GDP;
   
    5. Excess Profits Tax of 1950: .97 percent of GDP;

Present
1. Revenue and Expenditure Control Act of 1968: 1.09 percent of GDP;
   
    2. Tax Equity and Fiscal Responsibility Act of 1982: .8 percent of GDP;
   
    3(t): Crude Oil Windfall Profit Tax Act of 1980: .5 percent of GDP
   
    3(t): Omnibus Budget Reconciliation Act of 1993; .5 percent of GDP;
   
    5: Omnibus Budget Reconciliation Act of 1990; .49 percent of GDP.



Hope that helps

[Soul Crusher]

Obamacare: Seven New Taxes on Citizens Earning Less Than $250,000
by Robert Allen Bonelli29 Jun 2012, 7:13 AM


http://www.breitbart.com/Big-Government/2012/06/29/Seven-new-taxes


 

While we were all debating the cost to our liberty due to the Patient Protection and Affordable Care Act (Obamacare), we were ignoring the cost to our pockets.  If there ever was a reason for bipartisan rage about this law, it should be on the twenty - yes, twenty - hidden new taxes of this law.  Making matters even more relevant is that seven of these taxes are levied on all citizens regardless of income.  Hence, Mr. Obama’s promise not to raise taxes on anyone earning less than $250,000 is just another falsehood associated with this legislation.
 
The first, and best known, of these seven taxes that will hit all Americans as a result of Obamacare is the Individual Mandate Tax (no longer concealed as a penalty). This provision will require a couple to pay the higher of a base tax of $1,360 per year, or 2.5% of adjusted growth income starting with lower base tax and rising to this level by 2016.  Individuals will see a base tax of $695 and families a base tax of $2,085 per year by 2016. 

Next up is the Medicine Cabinet Tax that took effect in 2011.  This tax prohibits reimbursement of expenses for over-the-counter medicine, with the lone exception of insulin, from an employee’s pre-tax dollar funded Health Saving Account (HSA), Flexible Spending Account (FSA) or Health Reimbursement Account (HRA).  This provision hurts middle class earners particularly hard since they earn enough to actually pay federal taxes, but not enough to make this restriction negligible.
 
The Flexible Spending Account (FSA) Cap, which will begin in 2013, is perhaps the most hurtful provision to the middle class.  This part of the law imposes a cap of $2,500 per year (which is now unlimited) on the amount of pre-tax dollars that could be deposited into these accounts.  Why is this particularly hurtful to the middle class?  It is because funds in these accounts may be used to pay for special needs education for special needs children in the United States.  Tuition rates for this type of special education can easily exceed $14,000 per year and the use of pre-tax dollars has helped many middle income families.
 
Another direct hit to the middle class is the Medical Itemized Deduction Hurdle which is currently 7.5% of adjusted gross income.  This is the hurdle that must be met before medical expenses over that hurdle can be taken as a deduction on federal income taxes.  Obamacare raises this hurdle to 10% of adjusted gross income beginning in 2013.  Consider the middle class family with $80,000 of adjusted gross income and $8,000 of medical expenses.  Currently, that family can get some relief from being able to take a $2,000 deduction (7.5% X $80,000 = $6,000; $8,000 –$6,000 = $2,000).  An increase to 10% would eliminate the deduction in this example and if that family was paying a 25% federal tax rate, the real cost of that lost deduction would be $500.
 
The fifth new tax on the middle class, and all Americans, is the Health Savings Account (HSA) Withdrawal Tax Hike.  This provision increases the additional tax on non-medical early withdrawals from an HSA from 10% currently to 20% beginning in 2013.  This provision actually sets these accounts apart from Investment Retirement Accounts (IRA’s) and other tax advantaged accounts, all of which remain with a 10% early withdrawal tax.
 
Another regressive tax that is part of this law began in 2010 and that is the Indoor Tanning Services Tax, which places a 10% excise tax on people using tanning salons.  While some may regard this as insignificant, the broader implication is that this act of taxation is a blatant move by the federal government to control the behavior of citizens.  This provision, as does the Individual Mandate and as Justice Kennedy said during the oral arguments on the constitutionality of the law said, “….fundamentally changes the relationship between the federal government and the citizen.”
 
The seventh new tax that directly impacts the middle class, along with all citizens, is the Excise Tax on Comprehensive Health Insurance Plans or the “Cadillac” Health Insurance Plan Tax.  These are plans that provide extensive coverage and that are generally fully paid for, or largely paid for, by employers.  This provision imposes a 40% excise tax on the employer paid premium on taxpayers who are covered by such plans, beginning in 2018.  The reason it begins in 2018 is because most unionized workers are covered by plans that fall under this definition and a deferral was made to spare union members from this tax for at least a period of time.
 
There are thirteen other taxes that apply to businesses and that apply to high income (over $250,000 per year) households.  While these additional provisions will not impact the middle class directly, they can have serious indirect consequences for middle and low income earners.  Beginning in 2014, the Employer Mandate Tax will impose an annual non-deductible tax on employers with more than 50 employees who do not provide health insurance for their employees. 

The impact of this provision on low and middle income earners, and really all working Americans, is that employers will be confronted with three choices. The first is provide some level of health insurance, as many do today, and there would be no impact on employees.  The second choice is to pay the penalty, which would most likely be less expensive than providing health insurance, and force employees to seek their own health insurance or purchase it through federal government controlled state exchanges.  Studies have estimated that 20 million Americans will lose their employee funded health insurance as a result of this provision and employers electing this option.  The third choice is for employers to lay off employees, or not hire additional employees, because Obamacare forces them to either provide health insurance or pay the new tax. 

Another new tax, the Tax on Medical Device Manufacturers that begins in 2013, places a 2.3% excise tax on all items retailing for more than $100.  This provision will not only drive up the cost of various medical devices ranging from mobility assistance devices to personal testing supplies, but will also impact an industry that employs 360,000 people in 6,000 plants across our country.  This tax, while not a direct tax, would have significant negative impact on the middle class.
 
The Surtax on Investment Income for households earning $250,000 and more, beginning in 2013, will raise the Capital Gains Tax from 15% to 23.8% on investment income for these households and will raise Taxes on Dividends from 15% to 43.4% for the same households.  Aside from the impact on retired citizens dependent on dividends, this provision will pull income from the private economy.  In addition, the tax rate on Other Investment Income earned by Subchapter S Corporation (which many small business are organized as, allowing the owners to claim all business income as personal income) will rise from 35% to 43.4%.  This part of the provision would place additional pressure on small businesses resulting in more layoffs and less hiring, impacting all American workers.
 
All but one of the remaining new taxes in Obamacare are directed at health industry businesses and while they will not impact middle income families directly, the additional costs will most likely be passed on to the public.  The last new tax is really interesting, it is a tax on certain biofuels! 

These are the facts.  It does not matter if you support Mr. Obama and his new law or if you oppose it, the new taxes on the middle class or real and all Americans should understand their impact on their families and the economy.  Citizens, regardless of political beliefs, should recognize that Obamacare was passed with almost no sunlight shined on these middle class tax increases and need to understand that the new law was sold with the promise that there would be no new middle class taxes.  This is not partisan, it is simply the reality of politics.
 

[Dos Equis]

I'll Do Better
Past

1. Revenue Act of 1942: 5.04 percent of GDP;
   
    2. Revenue Act of 1961: 2.2 percent of GDP;
   
    3. Current Tax Payment Act of 1943: 1.13 percent of GDP;
   
    4. Revenue and Expenditure Control Act of 1968: 1.09 percent of GDP;
   
    5. Excess Profits Tax of 1950: .97 percent of GDP;

Present
1. Revenue and Expenditure Control Act of 1968: 1.09 percent of GDP;
   
    2. Tax Equity and Fiscal Responsibility Act of 1982: .8 percent of GDP;
   
    3(t): Crude Oil Windfall Profit Tax Act of 1980: .5 percent of GDP
   
    3(t): Omnibus Budget Reconciliation Act of 1993; .5 percent of GDP;
   
    5: Omnibus Budget Reconciliation Act of 1990; .49 percent of GDP.



Hope that helps

What's your source for this?

[Vince G, CSN MFT]

What's your source for this?

Politifact

[Soul Crusher]

The Coming ObamaTax Bomb
 Townhall.com ^ | June 29, 2012 | Katie Pavlich



By now you know what the Supreme Court verdict is: ObamaCare is a tax. So what does that mean in terms of actual dollar amounts for Americans and businesses who will pay this new tax? The Heritage Foundation and Americans for Tax Reform have released a series of summaries, tables and charts to help families understand what this means for their wallet.

Heritage:


The Patient Protection and Affordable Care Act (PPACA)[1] imposes numerous tax hikes that transfer more than $500 billion over 10 years—and more in the future—from hardworking American families and businesses to Congress for spending on new entitlements and subsidies. In addition, higher tax rates on working and investing will discourage economic growth both now and in the future, further lowering the standard of living.




From ATR:


 1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971

 2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion).  This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113

 3. “Black liquor” tax hike (Tax hike of $23.6 billion).  This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

 4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

 5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004

 6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

Taxes that took effect in 2011

 7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959

 8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959

Tax that took effect in 2012

 9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

Taxes that take effect in 2013

 10. Surtax on Investment Income ($123 billion/Jan. 2013):  Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single).  This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93
 



 *Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.  It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income.  It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans.  The 3.8% surtax does not apply to non-resident aliens.


 11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:


 

 12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

 13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

 14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

 15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

 16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014

 17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following



Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337

 18. Employer Mandate Tax (Jan 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

 Combined score of individual and employer mandate tax penalty: $65 billion/10 years


 19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

Taxes that take effect in 2018

 20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

 

 Also, ATR is warning Americans of Taxmageddon, which will happen on January 1, 2013. This will be the largest tax hike in American history and will come in three waves.


First Wave: Expiration of 2001 and 2003 Tax Relief

 In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and Democrat Congress in 2010).  The following tax hikes will occur on January 1, 2013:

 Personal income tax rates will rise on January 1, 2013.  The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed).  The lowest rate will rise from 10 to 15 percent.  All the rates in between will also rise.  Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.  The full list of marginal rate hikes is below:

 - The 10% bracket rises to a new and expanded 15%

 - The 25% bracket rises to 28%

 - The 28% bracket rises to 31%

 - The 33% bracket rises to 36%

 - The 35% bracket rises to 39.6%

 Higher taxes on marriage and family coming on January 1, 2013.  The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of taxable income.  The child tax credit will be cut in half from $1000 to $500 per child.  The standard deduction will no longer be doubled for married couples relative to the single level.

 Middle Class Death Tax returns on January 1, 2013.  The death tax is currently 35% with an exemption of $5 million ($10 million for married couples).  For those dying on or after January 1 2013, there is a 55 percent top death tax rate on estates over $1 million.  A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

 Higher tax rates on savers and investors on January 1, 2013.  The capital gains tax will rise from 15 percent this year to 23.8 percent in 2013.  The top dividends tax will rise from 15 percent this year to 43.4 percent in 2013.  This is because of scheduled rate hikes plus Obamacare’s investment surtax.

Second Wave: Obamacare Tax Hikes

 There are twenty new or higher taxes in Obamacare.  Some have already gone into effect (the tanning tax, the medicine cabinet tax, the HSA withdrawal tax, W-2 health insurance reporting, and the “economic substance doctrine”).  Several more will go into effect on January 1, 2013.  They include:

 Medicare Payroll Tax Hike takes effect on January 1, 2013.  The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits.  Starting in 2013, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate.

 “Special Needs Kids Tax” comes online on January 1, 2013  Imposes a cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.  This Obamacare cap harms these families.

 Medical Device Tax begins to be assessed on January 1, 2013.  Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100.

 “Haircut” for Medical Itemized Deductions goes into force on January 1, 2013.  Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

 When Americans prepare to file their tax returns in January of 2013, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired.  These tax increases will be in force for BOTH 2012 and 2013.  The major items include:

 The AMT will ensnare over 31 million families, up from 4 million last year.  According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 31 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created in 1969 to ensnare a handful of taxpayers.

 Full business expensing will disappear.  In 2011, businesses can expense half of their purchases of equipment.  Starting on 2013 tax returns, all of it will have to be “depreciated” (slowly deducted over many years).

 Taxes will be raised on all types of businesses.  There are literally scores of tax hikes on business that will take place.  The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others.  Combining high marginal tax rates with the loss of this tax relief will cost jobs.

 Tax Benefits for Education and Teaching Reduced.  The deduction for tuition and fees will not be available.  Tax credits for education will be limited.  Teachers will no longer be able to deduct classroom expenses.  Coverdell Education Savings Accounts will be cut.  Employer-provided educational assistance is curtailed.  The student loan interest deduction will be disallowed for hundreds of thousands of families.

 Charitable Contributions from IRAs no longer allowed.  Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.  This contribution also counts toward an annual “required minimum distribution.”  This ability will no longer be there.