Responding to a request for an analysis of tax provisions and increase costs for individuals and families under the President’s health care law, the Joint Committee on Taxation sent this letter to U.S. Senator Tom Coburn, M.D. (R-OK) confirming the President Obama’s health care law breaks his own pledge not to increase taxes on Americans making under $200,000 annually, or families making $250,000 annually. This letter solidifies information Drs Coburn and Barrasso provide in their latest oversight report on the health care law, “Warning: Side Effects,” released last week. In the report, they write:

“During his first presidential campaign, candidate Barack Obama repeatedly pledged not to increase taxes on Americans making under $200,000 annually, or families making $250,000 annually. During a stop in Dover, New Hampshire, President Obama said: ‘I can make a firm pledge…no family making less than $250,000 a year will see any form of tax increase.’ The health care law contains 18 separate tax increases totaling approximately $560 billion over 10 years, according to the initial estimate of the law by the Congressional Budget Office. Several of these taxes are passed directly to consumers and effectively break the President’s pledge.”

In their letter, the Joint Committee on Taxation highlights tax provisions in the health care law that directly and indirectly increase taxes on individuals and families.

Tax provisions directly affecting individuals include:

• The penalty on taxpayers who fail to maintain minimum essential health insurance coverage.

• The modification of the itemized deduction for medical expenses.

• Other provisions directly affecting individuals and families include the increase in additional tax on distributions from health savings accounts and flexible spending arrangements not used for medical expenses and limitation son health flexible spending arrangements in cafeteria plans.

Tax provisions that may indirectly affecting individuals include:

• The excise tax on high-cost employer-sponsored health coverage.

• The annual fee on health insurance providers.

• Other provisions indirectly affecting individuals through possible effects on prices of goods and services include the imposition of an annual fee on manufacturers and importers of branded drugs; the imposition of an excise tax on manufacturers and importers of certain medical devices; repeal of the business deduction for federal subsidies for certain retiree prescription drug plans; the imposition of a fee on insured and self- insured health plans for the Patient Centered Outcomes Research Trust Fund; and the imposition of a 10 percent excise tax on indoor tanning services.