…is scaring the daylights out of some small business owners.
I’m sure worried about it, as someone who is self employed. All I want is a simple catastrophic policy, but I may not be able to afford it, if it’s even available at all.
16 thoughts on “The ObamaCare Tax”
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That the government is so out of touch with how markets work is the scary part. But then, it’s really just about government control of all our lives.
The 2.3% reinsurance fee alone is costing my smallish employer an additional $150,000 for the next fiscal year. And for what?
Are you sure you aren’t confusing the $63 Transitional Reinsurance Fee with the 2.3% medical device tax?
It’s possible. I copied that 2.3% figure from another link. That $63 per covered person fee is not just employees but their family members as well. My company has about 1300 employees and this is costing us $150,000 for nothing. We could’ve hired one or more people for that amount of money but instead, it’s being flushed down the ObamaCare toilet. That’s at least one job killed by ObamaCare. Multiply it across the economy and it isn’t hard to understand why so many companies are holding off hiring new people.
But if you hire ten more people they will make you at least ten times more money. #obamamath
I think Jim has a problem with multiplication. For reference, see his arguments in 2009 regarding the mutiplier effects of the stimulus.
this is costing us $150,000 for nothing
You can make the same argument against any tax or fee.
That’s at least one job killed by ObamaCare
That one-time $150k fee is modest compared to the expiration of the 2% payroll tax holiday in January. If your company’s 1,300 employees average $50k/year, the expiration costs you collectively $1.3m, or about 9 Obamacare 2014 TRFs, every year.
The payroll tax goes to pay for Social Security and Medicare (perhaps Medicaid, too). Cutting the payroll tax only hastened the day when those programs go under. At least the payroll tax goes to something. What purpose did that reenrollment fee serve?
Likewise, how does raising the tax on medical devices help anyone? Those devices now cost more and the cost gets passed on. It’s a dumb idea all around. The term “medical devices” covers a lot of things including not only the obvious ones like pacemakers and hearing aids.
As a reminder, the tax is a 2.3% excise tax on the sales price (that’s gross sales, not profit) of taxable medical devices. The tax is extremely broad-based and applies to almost any FDA-registered device that is intended for human use – everything from MRIs to tongue depressors to ultrasounds to condoms. There are exceptions and exemptions if you know where to look, but this one-paragraph-long statute has already produced pages of perplexing regulations and an IRS Notice full of temporary guidelines.
At least the payroll tax goes to something.
It reduces the deficit.
What purpose did that reenrollment fee serve?
It reduces the deficit.
Likewise, how does raising the tax on medical devices help anyone?
It reduces the deficit.
Money is fungible.
Yes, we could. Did you have a point to make or were you just in an abnormally agreeable mood when you posted that?
You know what else reduces the deficit, Jim? Cut some of the damned spending! Strange how they never look at that side of the equation, isn’t it?
Jim repeats endlessly (probably to convince himself):
“It reduces the deficit”
Revenue only reduces the deficit if you apply it to the deficit. Obama doesn’t do that.
If you apply it to the deficit, but elswhere increase spending so that the overall deficit is the same or higher, you haven’t reduced the deficit.
It’s odd that the linked article doesn’t give the name of the tax they’re talking about, or say what the tax rate is. Are they talking about the Transition Reinsurance Fee? It starts at $63 per employee in 2014, and then goes down substantially in 2015 and 2016, at which point it goes away entirely.
It starts at $63 per employee in 2014, and then goes down substantially in 2015 and 2016, at which point it goes away entirely.
It will go down pretty quick as business start shutting their doors, and owners go on strike.
No, unlike in the real marketplace, when a government charge produces less revenue than expected, they raise the rate. Because that’s the fundamental miscomprehension government people have about the market, and why they argue so vehemently against the larger implications of the Laffer curve.
In a real marketplace no one, not even a monopoly, makes more money by selling less product. But the government isn’t a vendor.
Would a catastrophic plan meet the minimum coverage mandates? But hey at least you get free birth control pills.