PPACA is a health care reform law that requires individuals to buy and maintain insurance or pay a penalty/tax. The law is funded in part by this penatly/tax and also by increased taxes on other health and non-health related items and services.
Where Does the Money Come From? Besides the Individual Mandate penalty/tax, there are numerous NEW or INCREASED taxes and fees to fund all that is required by this law. +.9% Increase in Medicare Tax Rate (plus next item…) 3.8% New Tax on unearned income for high-income taxpayers= $210.2 billion ($200,000 for individual and $250,000 for joint filers) New Annual Fee on health insurance providers = $60 billion (For calculation - Sec 9010 (b) of the PPACA.)[1] 40% New Tax on health insurance policies which cost more than $10,200 for an individual or $27,500 for a family, per year = $32 billion (inland tax as opposed to an importation tax) New Annual Fee on manufacturers and importers of branded drugs = $27 billion (For calculation - Sec 9008 (b) of the PPACA)[2] 2.3% New Tax on manufacturers and importers of certain medical devices = $20 billion +2.5% Increase (7.5% to 10%) in the Adjusted Gross Income floor on medical expenses deduction = $15.2 billion Limit annual contributions to $2,500 on flexible spending arrangements in cafeteria plans (plans that allow employees to choose between different types of benefits) = $13 billion All other revenue sources = $14.9 billion 10% New Tax imposed on each individual for whom “indoor tanning services” are performed. 3.8% New Tax on investment income. Includes: gross income from interest, dividends, royalties, rents, and net capital gains. Investment income does not include interest on tax-exempt bonds, veterans’ benefits, excluded gain from the sale of a principle residence, distributions from retirement plans, or amounts subject to self-employment taxes. (The lesser of net investment income or the excess of modified Adjusted Gross Income over a the dollar amount at which the highest income tax bracket, typically $250,000 for married filing jointly and $200,000 filing as an individual).
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