Now that the Affordable Care Act (ACA) is the sanctioned law of the land, let’s take a closer look at how it will affect us as a nation.
In a 5-4 decision, the U.S. Supreme Court declared ACA to be tax. As the federal Congress has the authority to lay and collect taxes, they are, however, restricted to four types: excise, tariff, income, and direct.
Excise taxes are a tax on products produced for sale like gasoline, cigarettes, and liquor. The tax is added to the cost of the item at the point of sale.
Tariffs are taxes on products imported or exported to and from the country. Prior to the 1920s, no U.S. citizens paid any federal taxes; tariffs provided virtually all federal government operating revenues.
Income taxes are levied on the incomes of individuals or businesses. Like an excise tax, the consumer ultimately pays all federal taxes imposed on businesses—small or large.
Direct taxes can only be imposed on real property, personal property, or capitation (a tax levied on the basis of a fixed amount per person), and all direct taxes must be apportioned among the states on the basis of population.
Listed below are several of the new “taxes” imposed by ACA:
- A “tax” on individuals who fail to procure and maintain ACA-qualified health insurance
- A “tax” on employers who decline to provide health insurance to their employees
- A 3.8 percent surtax on investment income (surtax is an additional tax on income) … and for the young people, investment income (dividends) are what retired people live on
- A 40 percent excise tax on “Cadillac” health insurance plans (Note: Many school, state , and federal employee insurance plans fall under the definition of “Cadillac” health plans.)
- An increased income tax on non-medical early withdrawals from an HAS—from 10 percent to 20 percent
- An increased Medicare (payroll) tax—from 1.45 to 2.35 percent
- A 2.3 percent excise tax on medical device manufacturers
- A 10 percent excise tax on indoor tanning salons?
- A $50,000 surtax on charitable hospitals if they fail to meet the new rules set by HHS
- A $2.3 billion surtax on medical research companies
- A $60 billion surtax on the health insurance industry
So, if excise and tariff taxes are imposed only on products, income taxes on income, and direct taxes only on property and capitation, which must be apportioned, exactly what kind of a “tax” is it that forces you and I to purchase (or provide) ACA-qualified health insurance? The most recent estimate by my local health insurance provider is that monthly premiums will (at a minimum) double if not triple once ACA is fully implemented.
Mark DeVol
Anderson County
