ObamaCare Insurance Tax on Profit : 'Annual Fee' is Tax on Tax on Tax

It seems that the general public just loves more taxes as witnessed by the vote to elect a leader and a party that believes the same thing. I believe their really isn't limit to what the true democrat voter is willing to pay in new taxes, it's just part of their DNA. To be taxed into poverty is such a good feeling knowing you are contributing to the welfare of others.

And believe as well, no matter how high the taxes go as part of the ideology of progressive social democrats to level the playing field, voters will demand more taxes as they vote for more democrats. So instead of everyone succeeding as best they can in a free market, everyone will be the same, everyone will be dependent and poor, no hope for success or a future except, of course, the ruling elites, progressive democrats all will be living the good life in Washington.

It's a brave new world we are headed for. Enjoy the ride while you can.

The Impact of ObamaCare's "Annual Fee" Tax
Source: Robert Book, "Impact of the Health Insurance 'Annual Fee' Tax," American Action Forum, February 20, 2014.
March 3, 2014

ObamaCare's "annual fee" tax will be passed on to consumers in the form of higher premiums, says Robert Book, a health and economics expert at the American Action Forum.

The Affordable Care Act imposes a tax on health insurance companies that is not set at a fixed percent per policy, but is instead a fixed amount on the entire health insurance industry. The fee will then be allocated to individual companies based upon an insurance company's market share (as measured by total premiums).

The text of the statute calls this tax an "annual fee," but it is really a tax. The logic behind this tax is that insurance companies will make money from increased enrollment due to ObamaCare, and therefore should pay more to the federal government.

• For 2014, the fee is set at $8 billion. That figure rises to $11.3 billion in 2015 and 2016, reaching $14.3 billion in 2018. After that, the amount is based on a statutory formula.
• The tax applies to individually purchased insurance as well as Medicare Advantage and Medicaid managed care. Employer-sponsored self-insured health plans are exempt, though employer-sponsored insurance purchased from an insurance company is not.
• Notably, the tax cannot be deducted from an insurance company's federal income taxes. As such, insurers will have to include this tax as part of their profits on which they will pay an additional tax. Book notes that for most for-profit insurers, this means an additional 35 percent income tax on that annual fee tax.

Insurance companies will simply transfer this tax to consumers. Individuals will see their premiums increase due to this tax by $60 to $160 per person in 2014. That number will rise to $100 to $300 by 2018 for the average individual. For family coverage, the increase will reach $476 in 2018.
Notably, these higher premiums will lead some consumers to forgo insurance, increasing the average tax paid by those who remain insured.