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Obamacare - How Will Your Taxes Be Affected?

Posted on 29, May, 2013

If there's one rallying cry used by Republicans across the United States it's about Obamacare and what an Obamination it's turned out to be, at least in the eyes of its critics. At the end of 2012, and beginning of 2013, American taxpayers got their first introduction as to what you can expect from the full rollout of Obamacare by 2014. Obamacare, which is also known as The Affordable Care Act, is turning out to be something not Americans care for simply because it requires additional taxes from people who are already struggling to get by.

In a balanced outlook on Obamacare the taxes required to support it are now also being taken from the wealthy and those people who have disposable income to put into different kinds of investments. The reason why Obamacare is so unpopular with the upper-middle classes is because they see these taxes as being punitive, considering that these same people were living almost tax free during the eight years of the Bush administration. The unfortunate fact is that the United States has an outstanding debt of US$16 trillion dollars and the country is effectively bankrupt. People still get sick and healthcare still needs to be paid for, so that money has to come from somewhere.

One of the single biggest problems people have with Obamacare is figuring out which of their income sources are liable for taxes, for exactly how much and why. After all the act behind it contains almost 2,000 pages of documentation which almost nobody has read (think of it as the fine print on the future of the nation), and because of this people simply aren't aware of the many hidden taxes that are set to come online in 2014 when Obamacare comes into full effect. There are tax hikes for individual investors due, with most of these funds used to pay for the admin costs of Obamacare, contributing almost nothing to Medicare as a result. Democratic healthcare is an expensive beast to feed it appears.

In short the effect on personal income tax and spending is going to affect people both in the high income bracket and those in the middle income bracket too. For example anyone earning more than 200k as an individual, or 250k as a couple, will be expected to pay an extra 3.8% in taxes for Medicare costs. For anyone earning less than 200k per year you'll find that there's a sting in the tail for you here too in the form of limitations on what you can put aside in a flex plan, and you'll also be able to claim a smaller deduction for any ongoing medical expenses you have too. In short you're going to be paying more taxes overall.

It's very hard to judge what the final outcome of the Affordable Care Act will be, but Obamacare seems to prove that the old adage of "There are only two things you can be certain of in life - death and taxes" is as true now as it ever has been.

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