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More taxes from health care law start in 2013

Wealthy wage earners will pay more in Medicare tax next year, as well as higher taxes on investment income. People who tan already pay more.

By MSN Money Partner Dec 12, 2012 4:38PM
This post is by The Associated Press.

 

Starting in 2014, President Barack Obama's health care law will expand coverage to some 30 million uninsured people. At the same time, insurers will no longer be allowed to turn away those in poor health and virtually every American will be required to have health insurance, through an employer, a government program or by buying their own.

 

For the vast majority of people, the health care law won't mean sending more money to the IRS. But the wealthiest 2% of Americans will take the biggest hit, starting next year.

 

And roughly 20 million people eventually will benefit from tax credits that start in 2014 to help them pay insurance premiums.

 

Here is a look at some of the major taxes and fees, estimated to total nearly $700 billion over 10 years.

 

Upper-income households

 

Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000 will face a 0.9% Medicare tax increase on wages above those threshold amounts.

They'll also face an additional 3.8% tax on investment income. Together these are the biggest tax increase in the health care law.

 

Employer penalties

 

Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company's first 30 workers don't count toward the total.

 

Health care industries

 

Insurers, drug companies and medical device manufacturers face new fees and taxes.

 

Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3% excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They're trying to get it repealed.

 

The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.

 

Pharmaceutical companies that make or import brand-name drugs are already paying fees that totaled $2.5 billion in 2011, their first year.

 

People who don't get health insurance

 

Nearly 6 million people who don't get health insurance will face tax penalties starting in 2014. The fines will raise $6.9 billion in 2016. Average penalty in that year: about $1,200.

 

Indoor tanning devotees

 

A 10% sales tax on indoor tanning sessions took effect in 2010. It's expected to raise $1.5 billion over 10 years.

 

The 28 million people who visit tanning booths and beds each year — most of them women under 30, according to the Journal of the American Academy of Dermatology — are already paying.

 

Tanning salons were singled out because of strong medical evidence that exposure to ultraviolet lights increases the risk of skin cancer.

 

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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1Comment
Dec 22, 2012 6:37PM
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Nearly 6 million people who don't get health insurance will face tax penalties starting in 2014. The fines will raise $6.9 billion in 2016. Average penalty in that year: about $1,200.

 

And how exactly will they be collecting that...a lot of people with no health insurance don't file tax returns....oh well.....it looks good on paper!

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