New estimates by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) confirm what America already knows – that the Democrats’ health law is a trillion-dollar tax hike that families and employers simply cannot afford. The recent Supreme Court ruling left in place 21 tax increases enacted as part of that law, a dozen of which – marked with an asterisk (*) below – target Americans earning less than $200,000 per year for singles and $250,000 per year for married couples, in clear violation of the President’s pledge to avoid tax hikes on low- and middle-income taxpayers. According to the new CBO and JCT estimates, the gross tax increases in the law now total $1.058 trillion over 2013-2022. That new amount is nearly twice the “advertised” ten-year tax hike amount claimed when Democrats originally pushed the law through Congress just two years ago.
| Provision | March 2010 Estimate (‘10-‘19) |
June/July 2012 Re-Estimates (‘13-‘22) |
| Additional 0.9 percent payroll tax on wages and self-employment income and new 3.8 percent tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles)/$250,000 (married) | 210.2 | 317.7 |
| “Cadillac tax” on high-cost plans * | 32.0 | 111.0 |
| Employer mandate * | 52.0 | 106.0 |
| Annual tax on health insurance providers * | 60.1 | 101.7 |
| Individual mandate * | 17.0 | 55.0 |
| Annual tax on drug manufacturers / importers * | 27.0 | 34.2 |
| 2.3 percent excise tax on medical device manufacturers / importers * |
20.0 | 29.1 |
| Limit FSAs in cafeteria plans * | 13.0 | 24.0 |
| Raise 7.5 percent AGI floor on medical expense deduction to 10 percent * | 15.2 | 18.7 |
| Deny eligibility of “black liquor” for cellulosic biofuel producer credit |
23.6 | 15.5 |
| Codify economic substance doctrine | 4.5 | 5.3 |
| Increase penalty for nonqualified HSA distributions * | 1.4 | 4.5 |
| Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines * | 5.0 | 4.0 |
| Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund * | 2.6 | 3.8 |
| Eliminate deduction for expenses allocable to Medicare Part D subsidy | 4.5 | 3.1 |
| Impose 10 percent tax on tanning services * | 2.7 | 1.5 |
| Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers | 0.6 | 0.8 |
| Modify section 833 treatment of certain health organizations | 0.4 | 0.4 |
| Other revenue effects | 60.3 | 222.01 |
| Additional requirements for section 501(c)(3) hospitals | Negligible | Negligible |
| Employer W-2 reporting of value of health benefits | Negligible | Negligible |
| 1099 reporting for small businesses | 17.1 | Repealed by P.L. 112-9 |
| TOTAL GROSS TAX INCREASE (BILLIONS OF DOLLARS) |
569.2 | 1,058.3 |
Prepared by Ways and Means Committee Staff – July 24, 2012
1Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.
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