1. Limit Income-Tax Deductions
By only allowing taxpayers in the top two income tax brackets (33% and 35%) to deduct their mortgage interest, charitable contributions, and local taxes at the 28% rate it is suggested that the Federal government could collect $267 billion over the next 10 years. This is supposedly one of the Obama administrations main tactics for raising revenue. However, numerous Democratic leaders have already spoken out against it claiming it would hurt charities and residents of highly taxed areas such as New York City. Although experts predict that the original proposal will likely not pass into law, they are suggesting that some type of watered down version will.
2. Taxing Employer Provided Benefits
With the support of both Republicans and moderate Democrats in Congress-and even the most influential members of the Senate Finance Committee-the concept of taxing employer provided health benefits is something that has been getting a lot of attention lately. Although House Speaker Nancy Pelosi adamantly opposed any legislation regarding the issue, there are number of recent compromises that have made the new tax more likely to become law. The compromises include capping the value of benefits that go untaxed (for example if the tax-free limit is $13,000, an employee with a policy worth $15,000 would pay income taxes on $2,000), and imposing an income tax surcharge on the wealthiest taxpayers.
3. Tax Surcharge on the Wealthy
Speaking of tax surcharges on the wealthy, increasing the tax rate on taxpayers with incomes of over $200,000 or couples earning over $250,000 has also been discussed as a way to help pay for health care reform. This is the hot proposal in the House. Current proposals would levy an additional 3-4%, with the possibility of an additional 0.6% tax on those making more than $500,000. It is projected that if passed these tax increases would generate an estimated $832 billion in Federal revenue over the next decade.
4. Increased "Sin Taxes"
Increased taxes on sugar heavy soft drinks, tobacco products, and alcoholic beverages (also known as sin taxes) could provide up to $200 billion in additional tax revenue over the next 10 years. According to reports taxes on alcohol were last raised in 1991, and adjusted for inflation they are actually 37% lower today. However, with little support and opposition for dozens of industries, any such increases are very likely to ever see the light of day.
5. Repeal of Tax Saving Accounts and Deductions
Although not a direct tax increase, by repealing tax-advantaged savings accounts for health expenses, and repealing the medical expense deduction the Federal government could save over $250 billion. However, these taxes would mostly affect senior citizens already struggling with huge medical bills, and would directly break Obama's pledge to not increase taxes on families making under $250,000.
6. Shared Responsibility Payments
Although it may sound confusing, shared responsibility payments are basically fines for not having insurance. By requiring Americans to have some sort of coverage-similar to how motorists must get auto insurance-and enforcing a $1,000 per year fine, the Federal government could collect over $36 billion over the next decade. It would likely include subsidies for lower income Americans, and the concept has gotten support from a number of key Senate Democrats.
7. Expanded Medicare Taxes
One of the final taxes being considered to help pay for health care reform is an expansion of the Medicare tax. Currently the tax is only levied on earned income (wages from your employer, etc.). By levying the tax on capital gains, dividends and other unearned income, and increasing the rate for high-income earners, the government could collect over $500 billion over the next year. However, raising taxes on unearned income is highly unpopular among the American public, and under the current proposal 80% of the tax increase would be paid for by the top 5% of taxpayers.
The Tax Lady Roni Deutch and her law firm Roni Lynn Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax lawyers who can fight IRS tax liens on your behalf. Article Source: http://EzineArticles.com/?expert=Roni_Deutch |
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