ObamaCare Repeal Could Result in a Business and Personal Tax Cut for SomeNews
Posted in on December 28, 2016
For years, Republican congressional and presidential candidates have run on a platform of repealing the Patient Protection and Affordable Care Act (PPACA), or ObamaCare as it is commonly called. With the election of Donald J. Trump, repeal of the law is within reach and Republicans have indicated that undoing the signature healthcare law is going to be a top priority within the first 100 days after President Trump takes office.
PPACA is not just a healthcare law. The Affordable Care Act also made substantial changes to the tax code when it was passed, significantly increasing certain types of taxes. As a result, the repeal of the law could mean a big reduction in personal and business taxes for some individuals and for some organizations. A Virginia tax lawyer can provide information on the impact of ObamaCare repeal on your income tax bill.
What Does an ObamaCare Repeal Mean for Your Taxes?
While it is not yet clear exactly what form the ObamaCare repeal will take, it is clear that fully undoing the healthcare law would impact tax laws in many ways.
One group which could see a tax cut if ObamaCare is repealed is individuals who declined to carry minimum essential coverage and who were subject to tax penalties for their failure to get covered. If ObamaCare is repealed, the tax penalty assessed for those who opted out of buying insurance would go away.
A Medicare surtax and net investment tax that was imposed by ObamaCare on wealthier households would also go away if ObamaCare was repealed. The Medicare surtax involved a .9 percent increase in Medicare taxes on both wages and self-employment income exceeding $200,000 for individuals and $250,000 for couples. The investment tax imposed by ObamaCare was a 3.8 percent surcharge on capital gains and dividends for individuals with income of $200,000 or higher and for couples with incomes of $250,000 or greater.
Taxes on so-called Cadillac insurance plans (comprehensive and expensive insurance plans) would also be repealed with ObamaCare, as would a controversial tax on medical devices.
The repeal of the law would also mean that the so-called employer mandate would be eliminated. Larger companies would thus no longer face substantial tax penalties if they don't provide minimum essential insurance coverage for their workers. The fee under ObamaCare for larger employers who do not provide insurance for their full-time workers is $2,000 per employee who the law says must be covered.
Obviously, eliminating all of the different taxes imposed by ObamaCare would impact companies and individuals in different ways, depending upon the company size and insurance offerings and depending upon the personal situation of the individual. It is important to know what the changes to the tax rules could potentially mean for you.
Kevin Thorn, a Virginia tax lawyer, can provide you information on how a potential repeal of ObamaCare could impact your tax bill. He can also offer guidance on any and all regulatory changes at the state or federal level that affect your tax obligations. Contact him for help today.Share This Post