healthcarereform

DID YOU KNOW?

If you’re part of a hard-working (or retired) American family,

LIFE JUST GOT HARDER

new taxes thatthe 2010 health care law has

created include:

2010

Starting July 1, 2010 indoor tanning salons will charge a 10%

sales tax.

2011

Pharmaceutical manufacturerswill collectively pay a new excise

tax, starting at $2.5 billion and rising over time.

The drug makers will no doubtpass this new cost onto

consumers.

2011

Non-qualified distributions fromHealth Savings Accounts will be

taxed at 20% instead of the currentrate of 10%.

That’s a 100% tax increase.

2012

Private insurance plans will beforced to pay the government $1

or $2 each year for each participant.

If you have health insurance througha private insurance plan,

you will likely be required to pay this charge

That’s an additional tax of0.9%, or a 62% increase.

2013

Medicare payroll taxes will rise62% for those earning more than$200,000 a year ($250,000 if you

are married filing jointly).

The tax on wages in excess of $200,000 (or$250,000) is rising from 1.45% to 2.35%.

2013

There will also be a new 3.8% tax on gross investment income for those

earning more than $200,000

($250,000 for married filing jointly).

•

Investment income” includes interest,dividends, capital gains, rental

income, annuities and royalties.

2013

In addition to this new tax, capitalgains taxes are set to rise in 2011

from 15% to 20%

— that’s a 33% increase.

— that’s a 33% increase.

2013

Therefore, for people whoare making over $200,000 a year($250,000 if you are married filingjointly), the total tax on capitalgains is jumping from 15% to 23.8%.

the total tax on capitalgains is jumping from 15% to 23.8%.

That’s a 59% increase.

2013

Medical device manufacturersmust collect a new national sales taxof 2.9%. You will directly pay this tax,

but it will not apply to eyeglasses,contact lenses or hearing aids.

2013

Employers will no longer receive asubsidy for providing retiree prescription

drug coverage. Companieswill pay more to provide such benefits

as a result.

(It has already beenannounced that AT&T will incur a $1

billion charge, plus $62 million in new taxes annually because of

this provision.

Similar announcementshave been made regarding

John Deere ($150 million), Caterpillar($100 million), 3M Company ($90 million)

and AK Steele ($31 million), andmany more companies in the Fortune

500 are expected to make similarannouncements soon.)

It is widelyexpected that Corporate America

will pass these costs onto consumersin the form of higher prices fortheir goods and services,and

reductionin the benefits they provide to theirretired employees (who will in turnbe forced to pay higher health care

costs) or both.

2013

You will not be able to deduct medical expenses on your tax return until you’ve spent 10%

of your Adjusted Gross Income.

Currently, you can begin deductionsafter you spend 7.5% of your AGI.

Therefore, this is a 33% increase inthe threshold.

2013

Contributions to Flexible SpendingAccounts will be capped at

$2,500 per year, and you will nolonger be able to use the money tobuy over-the-counter drugs. This

change will cause some taxpayersto pay as much as several thousanddollars more in health care expenses

and in annual income taxes.

2013

If you’re an executive in the healthinsurance industry and earn morethan half a million dollars a year,taxes will effectively double for allof your income above $500,000.

2014

Employers with more than 50 employeesthat do not provide health

insurance to their employees will paya $2,000 penalty per employee per

year, starting with the 31st employee

2014

If you do not have health insurance, you and each member of your household will pay a new tax of 1%

of household income (at least $95 per person per year).

This tax will rise to 2.5% per year (at least $695per person) by 2016.

2018

Health insurance plans that cost more than $10,200 for individuals ($27,500 per family) will pay a new

40% tax on any coverage that exceeds the limit.

Plan sponsors will nodoubt pass this cost along to you.

Health insurance plans that costmore than $10,200 for individuals

($27,500 per family) will pay a new40% tax on any coverage that exceeds

the limit.

Plan sponsors will nodoubt pass this cost along to you.

In addition to these new taxes, thenew health care law cuts federal

funding of Medicare by $500 billionover the next decade.

Medicare is not the only entitlementprogram likely to see cuts.

Based on current projections, SocialSecurity will be broke by 2037 unless

changes are made.

That means taxeswill rise, and benefits will be delayed

or reduced, or all three.Retirees are already feeling pressure.

NOW YOU KNOW


Excerpted from Health Care Reform

A Special ReportApril 2010

By Ric Edelman©2010 Edelman Financial Services RicEdelman.com 888-PLAN-RIC