Spokane7
32°
March 28, 2010 in Opinion
Health law’s heavy impact
In the days leading up to the dramatic late-night vote on President Barack Obama’s health plan, Speaker Nancy Pelosi said, “We have to pass the bill so that you can find out what is in it …” Now that ObamaCare has passed, it is slowly dawning on people what the new law means for the country and for Washington state.
ObamaCare sweeps away a host of state regulations and permanently alters our state’s insurance market. From now on, the federal government will manage the health care of all Washingtonians. The 2,700-page law contains a complex web of mandates, directives, price controls, tax increases and subsidies.
Federal officials will now decide what kind of insurance people in Washington must have, what medicines will be covered, what treatments are allowed and which are not. Early reports indicate, however, that President Obama, Vice President Biden, the Cabinet, senior members of Congress and leadership staff are exempt.
The new law falls well short of universal coverage. ObamaCare will leave about 6 percent of Washington residents without coverage. The measure is conservatively expected to cost $2.4 trillion in its first full decade. Thousands of older Washingtonians will lose their Medicare Advantage coverage, and the state’s 120,000 Health Savings Account holders may need to buy new policies or face stiff penalties.
Washington residents will begin paying ObamaCare taxes this year, while most benefits don’t start until 2014. The law includes some 19 new taxes. Here’s a rundown of what Washingtonians can expect in the coming years.
Penalties on individuals. Individuals will pay a yearly penalty of $695, or up to 2.5 percent of their annual income, if they cannot show they have purchased a government-approved health policy.
Penalties on families. Families will pay a yearly penalty of $347 per child, up to $2,250 per family, if parents cannot show they have purchased a government- approved policy.
Penalties on employers. Business owners with more than 50 employees must buy government- acceptable health coverage or pay a yearly penalty of $2,000 per employee if at least one employee receives a tax credit.
Tax on investment income. ObamaCare imposes a 3.8 percent annual tax on investment income of individuals making $200,000 or more and on families making $250,000 or more. The new tax is not indexed to inflation, so more people will fall under it each year. Seniors on fixed incomes and people with IRAs and 401(k) plans will be hit particularly hard.
Tax on “Cadillac” health plans. Starting in 2018, imposes a 40 percent annual tax on health care plans valued at $10,200 for individuals and $27,500 for families.
Medicare tax increase. Requires single people earning $200,000 or more and couples earning $250,000 or more to pay an additional 0.9 percent in Medicare taxes.
Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one.
Tax on medical aid devices. Creates a new 2.9 percent tax on medical aid devices. Certain items intended for personal use are exempt.
Tax on tanning. Imposes a 10 percent tax on services at tanning salons. Business owners will collect the tax from customers and send it to the federal government. This appears to be the first federal sales tax in the United States.
ObamaCare will be enforced by the Internal Revenue Service. The tax agency plans to hire 16,500 new auditors, agents and investigators, and to increase enforcement audits. The IRS can confiscate tax refunds, place liens on property and seek jail time if health-related penalties and taxes are not paid.
President Obama had said people could keep their coverage if they want, yet the Congressional Budget Office estimates that under ObamaCare 8 million to 9 million people will lose their employer-provided coverage.
The ObamaCare law passed over bipartisan opposition in Congress. Republicans say they will run on a “repeal and replace” platform this fall, and Washington has joined 12 other states in a lawsuit challenging the federal government’s power to force state residents to buy a product – insurance – from private companies. The long-term prospects of ObamaCare are unclear. In the meantime, Washingtonians should prepare for major changes in their tax burden.
Paul Guppy is vice president for research at the Washington Policy Center, a research organization with offices in Spokane, Seattle, Olympia and the Tri-Cities ( www.washingtonpolicy.org).
Romney’s ‘focus’ often blurred 
EWU Text-to-Win Contest 
WSU Text-to-Win Contest 
Enter to win tickets to see Adam Carolla at the Knitting Factory 
JBlim on March 28 at 9:36 a.m.
This statement that “Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions.” is highly misleading or flat out wrong. I believe the article is referring to a tax on capital gains, which most average homeowners now never have to pay anyway, because an individual can exclude up to $250,000 ($500,000 for a married couple filing jointly) of capital gains on their home.
wooglin52 on March 28 at 12:35 p.m.
Sorry JBlim, the article as written re: the 3.8% tax on home sales/purchases is correct. Don’t let your political biases get in the way of your good judgement. The taxPAYERS of Washington and 49 other states have been “had” big time, and obama’s rock solid 30% support base are the ones that benefit. On the backs of the rest of us, who are going to pay big time. Get ready for a national sales tax (they call it VAT, value added tax which it ain’t; just a heavy extra tax on everything you buy) In most of the European socialized medicine countries those VAT add anywhere from 21 to 40% sales tax to the cost of items to pay for the healthcare entitlements. That’s why they are militarily impotent; there’s simply nothing left over for defense. I’ve been there, I know what those taxes are. You’re about to find out a whole bunch if you’re a taxPAYER and not a TaxTAKER, JBlim
JBlim on March 28 at 2:48 p.m.
wooglin52- What is the source of your statement other than this article?
JBlim on March 28 at 5:08 p.m.
Yeah, I looked it up, you’re just wrong:
(page 90):
6 ‘‘(iii) net gain (to the extent taken
7 into account in computing taxable income)
8 attributable to the disposition of property
9 other than property held in a trade or
10 business not described in paragraph (2),
11 over . . .
But don’t take my word for it, look it up yourself:
http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf
happycamper105 on March 29 at 8:52 a.m.
I’m confused. If there is no public option, how is the federal government going to controll all healthcare. I thought there was only private insurance?
Dazzeetrader11 on March 29 at 5:14 p.m.
Blim…wake up. Obama will take what he wants to get your/our money. Huge shortfall of funding in his plan. If he can do it to those who make $200 K, it’s just a matter of time before he finds everyone. Value Added Tax (VAT..which is about the only way he can make up the shortfall)…will influence everyone. …and you get yours too. Doesn’t matter what you say, this is a money hungry administration. As long as the 10th amendment can be suspended or ignored, everyone is in jeopardy. America best wake up. Obama is an idealogue who will do whatever’s necessary to control citizens and push his ideas through……and increase government power. How do you like him now?
JBlim on March 29 at 6:44 p.m.
Daisy, I don’t mind paying my taxes. If you’re looking for cuts, take a look at the Department of Defense. I’m sure we could adequately protect America for half what we spend now. We may not be able to defend the oil companies profits abroad for half, though. They’d be on their own. No more attacking middle east countries for Exxon.
JBlim on April 03 at 8:14 a.m.
Thanks to Sara Orrange for setting the issue I raised straight:
“…Home sales tax clarified
In his recent guest column regarding the impact of the Health Care Bill, Paul Guppy of the Washington Policy Center claimed that a 3.8% tax on all home sales was a part of the recently passed legislation. This is inaccurate and needs to be corrected. The truth about the bill is that if you sell your home for a profit above the Capitol Gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the additional 3.8% tax on any gain realized over this threshold.
Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made. This tax is aimed at so called “high earners” if you do not fall into that category you will not pay any extra taxes upon the sale of your home.
Sara Orrange
Government Affairs Director
Spokane Association of REALTORS…”
http://www.spokesman.com/letters/2010/apr/01/response-paul-guppy-regarding-impact-health-care-b/
Well, just give Guppy the benefit of the doubt. He’s not fear mongering, he just got confused about the whole thing, because how would someone with his background be expected to know the difference:
“…Paul is a graduate of Seattle University and holds graduate degrees in political science from Claremont Graduate University and the London School of Economics. He came to the Center in 1998 after 12 years on the staff of the U.S. Congress, including service as Legislative Director, Chief of Staff and with the House Appropriations Committee, with a focus on budget policy and federal spending. He is the author of numerous published studies and articles, including the Washington State Piglet Book, and is editor of the Policy Guide for Washington State. He specializes in state and local tax systems, health care reform and free market economics. He is a member of the King County Citizens Election Oversight Committee, the State Commission on Tax Preferences, and the Attorney General’s Eminent Domain Task Force….”
http://www.washingtonpolicy.org/aboutus/biographies/guppy.html
g63drummer on April 13 at 10:07 a.m.
Not too put too fine a point on the article, or to appear to be nitpicking this to death, but I do have one question. Where was this type of informational reporting BEFORE this health care bill was passed and signed into law? Were any of these facts, even if we only suspected based on reports from various news agencies, that this was the case, made public in the newspapers and other media outlets in Washington State?
My first response is to say loud and clear that I doubt it!! Secondly, if my first response turns out to be true, I would say to the “reporters and journalists” in the various media outlets there, “Shame on you” and “shame on us” for not requiring that you ferret out and report the facts to us, so that we, as an informed citizenry, could more effectively make the voices of “We the People” heard on this subject.
Shanghai_Dan on April 19 at 8:11 a.m.
JBlim,
I bought my house (here in Edmonds, between Seattle and Everett) for $89,900 in 1986; I’m looking to sell this year and the going price for similar houses is $430,000. Meaning me - a person who makes WELL below $200,000 - will get to pay additional taxes that President Obama promised I’d never pay.
As far as “war for Exxon”, who do you think earns more from oil: Exxon or the Government? In 2008, for every dollar of net profit Exxon earned, they paid nearly $3 in Government taxes. Rather than war for oil, it seems your rallying cry should be war for taxes!
RobertR on April 20 at 6:54 p.m.
Well said Shanghai Dan! The liberals are ok with the government spending us into oblivion but they hate a private company providing something vitally important to American citizens. A truly messed up species I must say.
Also looks like our old buddy JBlim is in for a very rude awakening when he finds out that this administration is planning on redistributing his wealth also! That is unless of course he’s still in high school using his dad’s computer. Another highly likely scenario…. Naive is ok but being this naive and gullible should be criminal. He really needs a caretaker to make sure he doesn’t get hurt going to the potty…
And lastly as someone who owned a duplex over the years and am selling it this year I’ll get hit with the 3.8% on the half that I didn’t live in. Isn’t that just wonderful? I spend more fixing it up after deadbeats get through trashing it than I’ve ever made on it and now I’ll have to pay more taxes to the government of Cheatem and Howe…
edspo on April 24 at 1:56 p.m.
The news media largely failed to report the details of the health bills prior to passage. Most reporting was concerned with the “he said, she said” bickering between parties or issues concerning the process by which the bills would advance. Very little attention was given to the numerous details that will have profound effects.
To the above we now know, after the fact that the bills completely failed to do anything about rapidly rising prices, and failed to do anything about the root cause of health care pricing (versus insurance premiums). Several analysis out in the past week, including one from the insurance industry (http://money.cnn.com/2010/04/23/news/economy/health_reform_insurers_react/index.htm?source=cnn_bin&hpt=Sbin) , now tells us that everyone will be hit with much higher premiums starting this fall, in order to cover all family members through age 26. Workers will see the higher prices during “open enrollment” periods that typically occur late in the year.
The Democrats even admit that the bill fails to control runaway prices at all (http://www.latimes.com/business/la-fi-health-premiums-20100421,0,3975889.story)
Individuals and families who have been responsibly purchasing and otherwise paying for all of their own health care, will be forced to purchase new gold plated, high premium, high benefit packages. Half of this group will not see subsidies or tax credits and may find themselves spending 20% to 25% of their after tax income on health insurance premiums (via CBO government estimate). (Many in this group currently purchase high deductible true insurance but will now be required to purchase what is effectively high benefit packages.)
200,000 people currently on high cost state plans because they have a pre-existing condition are required, under the new law, to stay on their high cost plan forever, even though the new law enables new entrants to buy lower cost plans. Those already on such plans will not be permitted to switch to the newer low cost plans (see http://www.google.com/hostednews/ap/article/ALeqM5jxPQgG3FooEgj3TfE3fzZ-L6dNSQD9F410N00)
The news media failed with its typical “he said, she said” reporting and avoidance of details. Shame on the news media.
bubba99 on April 26 at 5:36 p.m.
Homework people ….
http://www.factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/
rdevenpo on April 27 at 2:07 p.m.
Please confirm who is imposing the 3.8% tax on the capital gains over $250K single and $500K married. I am well aware of the 1.78% Realestate transfer tax levied by the State of Washington.
I thought it was another State of Washington <gift>. Someone please confirm.
looneybird on June 10 at 6:04 p.m.
Anyone who EVER believed that having the GOVERNMENT in control of 1/6 of the nation’s economy was a good idea, please stand up. All one needs to do is: a) try to get something mailed in a hurry from the post office (by the way, bankrupt) b) get a passport in a REASONABLE amont of time c) get an IRS person (the same person) on the phone long enough to get a minor issue resolved…..Wake up people. The goverment getting involved in ANY part of our lives that SHOULD be handled as a personal responsibility is ludicrous. The health”care” bill was simply another power grab which, at its root was designed to be implemented so that there would be other ways to tax us out of our money. So you know, I am NOT against helping those who NEED help, who cannot work and cannot tend to themselves on these and other financial matters. But for those who would rather have a nice car and cable TV rather than buy insurance, I got NO time or initiative to help.
ajconr0 on July 05 at 11:06 a.m.
I was forwarded this story from someone trying to help inform friends and family of evil Obama and how he’s taking all our money. Quickly I realized how ridiculous and without merit it was and took two minutes to google this tax and got some info on it.
http://www.realtor.org/small_business_health_coverage.nsf/Pages/health_ref_faq_med_tax?OpenDocument
Wake up people. Do a little research and quit believing everything that an idiot from some policy research institute sends for an opinion piece. People that work for these places are either doing it for free, which expains how much their opinion is worth, or getting funding from those that would benefit spreading such garbage.
rktect29 on July 19 at 1:36 p.m.
I understand the inaccuracies of the comment on the 3.8% tax. So what, ONE item in the author’s list is wrong.
But “wake up people” … seriously?
What does taxing capital gains, tanning and investment income have to do with liberal backed Healthcare reform?
And yes taxing those unrelated items for liberal healthcare “reform” that’s been shoved down our throats is ridiculous. Looks like the Obama defenders are the ones that need to “wake up”.
“Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their president.”
justanohioguy on August 02 at 9:57 a.m.
It’s too bad that some journalists, are just like politicians. If the facts are bad, they try to hide or ignore them. Or, if they are creative enough, they can just tell the part of the story that appears to support their agenda. Others have said it. Do your homework.
Many politicians and journalists are successful because they rely upon their ‘constituents’ (l.e. voters and/or readers) being uninformed or lazy. A 400,000.00 house is only subject to the 3.8% tax on the gain. For a single person, that would mean that they are taxed on the amount ONLY if they originally bought the house for 150,000 or less. (Hence, taxed on anything OVER a 250,000.00 PROFIT) A couple would not be taxed at all, because the 500,000.00 couples exemption is actually higher than the 400,000.00. sales price.
I’m not sure about the Pacific Northwest, but here in Ohio, I don’t know too many people who can claim that kind of appreciation in their home values. And if their house is less than thirty years old, they probably can’t sell it at a profit at all.
And could someone elaborate on the people who are being dropped by their private healthcare providers because of the healthcare bill? I can name numerous people with either individual, or employer supported coverage, who have had their rates constantly increased, or their claims denied. I have even heard of corporate kick backs and rebates by insurance companies offering lesser plans, at lower rates. The corporate executives don’t care. They like these band-aid plans, because they save money. If they have a claim, they can afford the additional out-of pocket costs that their employees cannot.
My dog could write a more factual piece. Isn’t it an editor’s job to check the ‘facts’ of a story? Could someone please correct me if I’m wrong? If I’m right, someone isn’t doing their job, and this story would never have been published in the first place.
clongau on August 06 at 9:28 a.m.
The reason you didn`t see this info in the papers is because this info wasn`t out there. Remember our wonderful speaker said ” lets pass this bill and then you will know what is in it.” Well for once she wasn`t lying.
khaos119 on September 16 at 1:00 p.m.
I am not an Obama supporter, however I am a supporter of speaking the truth. Can you please show me on which exact line this 3.8% tax is on? I went through the entire bill and saw nothing even close to home sales.
nikkicavin on September 17 at 2:51 p.m.
So how does the $250,000 & $500,000 capital gains exemption work when that goes away as part of the expiration of the Bush tax cuts? Also, what about the elderly who are selling and cutting back, their gains (which are primarily inflation related) are going to be taxed. What about the sale of homes after the death of the owner, what are their tax bills going to be? And the death tax exemption is also going away.
It appears that the people without equity or assets are pooh-poohing this 3.8% sales on gains. They are just planning on being taken care of from cradle to grave and have no aspirations of building and estate.
nassau_guy on September 27 at 8:18 a.m.
Have you guys really read the details of this health care reform? The answer is NO, you know why, because they haven’t actually figured out the finer points of this thing.
Everything going on now is only a stop-gap until we get to 2014 and the Govt forces everyone to buy insurance as an individual thru the Govt Exchange. Seriously, they want to do away with HSA’s - starting 1/1/11 over-the-counter meds (ie: asprin) are now non-qualified for use of funds. Band-aid (& other supplies) are qualified. Go figure. Small business owners are going to get killed now that they won’t be able to “carve-out” plans. It will be cheaper to pay $3000/year penalty than to offer insurance. How about this, insurance co’s & employers alike will be fined $1000 a day if they don’t give employees 60 days notice of benefit changes - but the rates are subject to states approval - does the state move that fast - NO.
You can kiss all state mandates, like timothy’s law (in NY), goodbye. The govt will not fund any mandates above their own low-ball requirements and will force states to fund it at 100%.
Beginning 2011, employers must report the value of health benefits on employees W-2s (for 2012), I don’t think this is so much to tax us on it, I think the Govt wants to get an idea of what costs they are looking at in 2014. Especially since the want to go to just one rating pool. There’ll be vouchers for all of us to buy directly thru the Govt exchange and no penalty to employers who offer voucher to employees to buy insurance thru the exchange. Where are we headed here? To the exchange, that’s where.
Look, realistically, I am looking at insurance companies asking NY state to allow 16-32% rate increases on EPO plans and over 40% increases on HSA’s. Are you kidding me??? And do you think it will be any cheaper when the govt gets their hands on it? No, it won’t be. And just wait until the Govt doesn’t pay a bill correctly and you need to call them to get it fixed… I call the NYS insurance dept last week for a quick question - after being on hold for over 35 minutes I got a recording that stated “All of our agents are busy please call back” and disconnected me. Yeehaw, I can not wait!
And lastly, I read thru JBlim’s link regarding the 3.8% tax on home sales and yes the tax is above the threshold allowed by law. Thanks for pointing that out. - still, I don’t know why that would be mentioned in a health care reform bill unless there was serious thought to changing those rules. Just saying…
bcmp on September 27 at 4:56 p.m.
The article claims the tax on tanning might be the first Federal sales tax. My recollection to dispel this is that we used to collect a ten percent retail Federal tax on cosmetics - lipstick, nail polish, facial creams (cold cream…) … I’m not certain when the tax was eliminated, but I do recall collecting it sometime between 1958 and 1969.
JerseyJoe on September 30 at 5:47 a.m.
JBlim…???? Is this my buddy?? :-)
dammad on September 30 at 11:39 a.m.
When the President of the “National Association of Realtors” in the United States says this 3.8% tax is not true. I would believe him over any politican or republ. news reporter. When the republ. had a chance to make a difference in the Healhcare bill they bascially said NO to everything. They finally in Sept. reveiled their plan if you call it one.
The Taxpayers provide the best possible Health Ins. and Retirement plans for our “Public Servants” who believe we don’t deserve the same in return. It’s Taxpayers money.
Americans need to realize most of these “Public Servants” do not work for “The People” but for themselves and the special interest groups. If we make ourselves heard by voting out the incumbants eventually they will have to pay attention.
Acorn was dismantled over what was later proven to be lies. The same guy I think his name is O’keefe tried again to get misleading info out to destroy another good organization. This time he tried to setup a CNN reporter to run a bad lead only to find out FOX News was in the background ready to bash CNN for an untrue story. Watch CNN “Rick’s List”.
Lies and scare tactics are the way one side tries to win elections. I’d rather concentrate on helping the majority. The wealthy have recieved welfare off the backs of the middle class for the last 10 years, and I don’t see them providing any jobs, so why continue the welfare.
PPL’s CEO made I think a 9 MILLION $$$ BONUS last year I guess they don’t pay him enough. That kind of crap is what ruining our Country. We need Caps on utilites and necessities for the sake of the less forunate, and forget about the investors.
One other point our “Public Servant” are permitted “insider trading” I thought they were our servants. We do need change.