by: Jeffrey Quinn
Could be bad for your fiscal health, in any event.
Check out these provisions included within a version of the "reform" plan recently passed by the House Ways and Means Committee:
- No longer would the cost of over the counter drugs be reimbursable via your health savings account or flexible spending account.
- Folks who don't have "acceptable" health benefit plan coverage would be taxed to the tune of 2.5% of modified adjusted gross income, though such tax would not be more than the "national average premium." (Whew.)
- Health insurers would be required to file information returns for the individuals they cover--so the Revenooers can know who to tax for running afoul of the newly "reformed" health care provisions!
- Employers who don't provide health benefits for their employees would pay an excise tax equal to 8% of wages.
- And of course, as you have heard by now, "rich" folks will get hammered by a new surtax: 1% surtax for those with modified AGI between $350,000 and $500,000; 1.5% surtax for those whose modified AGI ranges between $500,000 and $1,000,000; and a whopping 5.4% surtax on AGI earners in excess of $1,000,000.
And depending on what state you live in, your partnership with your Federal,
state and local tax collectors could end up exceeding 50%!
Recent stats published by the Tax Foundation are enough to make one want to throw up--or maybe even quit working!
The great state of Oregon leads the pack, assuming the top Federal rate grows to Clintonesque 39.6%, and the 5.4% surtax kicks in. Combining all of this with a top state rate of 11%, Medicare taxes, local taxes, etc. would end up hammering Oregonians to the tune of 57.54%!
California, of course, would not be far behind with a 56.58% clip!
Makes little old Nevada look better all the time, only shellacking folks at a total rate of 47.25%
But not all the news is bad this week--don't forget that the American Recovery and Reinvestment Act allows qualifying taxpayers to deduct the state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles! And there is no limit on the number of vehicles that may be purchased, though the deduction per vehicle is limited to the tax on up to $49,500 of the purchase price and does, of course, "phase out" for taxpayers at higher income levels.
But that's OK, right? They're "rich" and can afford to pay just a little bit more….
CONSULT YOUR TAX ADVISOR - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. with offices in Incline Village and Reno. He is also a contributor to the recently published twelfth edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments at jquinn@ashleyquinncpas.com.
