New Year, New Taxes to Pay For ObamaCare
Much of the debate over the fiscal cliff deal was about whether or not to let taxes rise for the wealthy starting this year. What often got overlooked, though, was that high earners were already set for higher taxes in 2013 thanks to ObamaCare.
The law attempts to offset about half its projected cost through an array of new taxes on everything from investment income to medical devices. And many of those taxes kicked in with the new year.
The biggest of those taxes is a 0.9 percent increase in the Medicare hospital tax for individuals making $200,000 annually and couples earning more than $250,000. Folks at the same income level will also face a new 3.8 percent tax on "unearned" investment income.
The income thresholds create a significant penalty for married couples: Two unmarried earners filing at $200,000 wouldn't trigger the new tax. But if the same two earners are married, they'll pay about $1,350 more as a result of the higher rate.
ObamaCare also sets up a 2.9 percent tax on medical devices, levied at the time of sale, beginning this year. But it may not last for long. In a sign of how unstable these taxes are, the GOP-controlled House repealed the provision over the summer—and a handful of Democratic Senators last month urged it be delayed, and perhaps repealed.
Why worry about higher taxes? Because they might cost jobs if device makers relocate to lower-tax nations, Democratic Senator Kay Hagan of North Carolina told NBC News. "There's so much innovation in this field right now," Hagan said, "and they do create so many good jobs in our country that we have the risk of losing these jobs to Ireland and to many other countries."
