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November 24, 2009 |
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Wealthy Clients Face New Taxes From Health-Care Overhaul |
(Dow Jones) Wealthy taxpayers can count on helping to pay for the health-care overhaul,
no matter which version of the legislation Congress adopts in the end.
A new list shows how high the tab could be if the Senate bill carries the day.
The Joint Committee on Taxation published a list of 17 tax-related items in the Senate bill, which it estimates will raise around $370 billion in revenues over the next 10 years. Fourteen of the items are measures that would raise taxes.
Among the most aggressive of the proposed tax hikes: a 40% excise tax on health coverage over $8,500 for individuals ($23,000 for families); an additional 0.5% tax on hospital insurance for single taxpayers who make over $200,000 ($250,000 for joint filers), and a raised floor of 10% adjusted gross income for itemizing medical deductions (currently, one can itemize medical deductions to the extent they exceed 7.5% of AGI). The bill also proposes a 5% excise tax on cosmetic surgery.
While the Senate bill keeps all of its tax measures health related, the House bill includes some that are not.
Mark Luscombe, principal analyst for tax and accounting at CCH, a Wolters Kluwer business, says the tax hit on the wealthy would probably be heavier from the House bill because it raises the bulk of its revenue from a proposed surtax on the wealthy.
New taxes from health-care overhaul, along with higher individual marginal tax rates and expected capital gains increases after 2010 would push the effective tax rate on the wealthy to record highs, according to opponents of the overhaul bills.
And, the overhaul will fundamentally alter the scope and mission of the IRS, says CCH in a report it published last week. The IRS, it explains, would be responsible for overseeing the administration of additional taxes on individuals and employers, determining various exemptions, overseeing new information reporting requirements.
As reported by CCH, Senate Finance Committee ranking member Charles Grassley (R.,Iowa) recently asked the Treasury Department for details on how the IRS would implement some of the measures. IRS Commissioner Doug Shulman declined to provide details but said the IRS would be ready.
Wealthy taxpayers can count on helping to pay for health-care overhaul, no matter which version of the legislation Congress adopts in the end.
A new list shows how high the tab could be if the Senate bill carries the day.
The Joint Committee on Taxation published a list of 17 tax-related items in the Senate bill, which it estimates will raise around $370 billion in revenues over the next 10 years. Fourteen of the items are measures that would raise taxes.
Among the most aggressive of the proposed tax hikes: a 40% excise tax on health coverage over $8,500 for individuals ($23,000 for families); an additional 0.5% tax on hospital insurance for single taxpayers who make over $200,000 ($250,000 for joint filers), and a raised floor of 10% adjusted gross income for itemizing medical deductions (currently, one can itemize medical deductions to the extent they exceed 7.5% of AGI). The bill also proposes a 5% excise tax on cosmetic surgery.
While the Senate bill keeps all of its tax measures health related, the House bill includes some that are not.
Mark Luscombe, principal analyst for tax and accounting at CCH, a Wolters Kluwer business, says the tax hit on the wealthy would probably be heavier from the House bill because it raises the bulk of its revenue from a proposed surtax on the wealthy.
New taxes from health-care overhaul, along with higher individual marginal tax rates and expected capital gains increases after 2010 would push the effective tax rate on the wealthy to record highs, according to opponents of the overhaul bills.
And, the overhaul will fundamentally alter the scope and mission of the IRS, says CCH in a report it published last week. The IRS, it explains, would be responsible for overseeing the administration of additional taxes on individuals and employers, determining various exemptions, overseeing new information reporting requirements.
As reported by CCH, Senate Finance Committee ranking member Charles Grassley (R.,Iowa) recently asked the Treasury Department for details on how the IRS would implement some of the measures. IRS Commissioner Doug Shulman declined to provide details but said the IRS would be ready.
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