More On Tax Planningfrom The Advisor's Professional Library
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The Supreme Court of the United States (SCOTUS) decision on Thursday to uphold the Affordable Care Act (aka the ACA or "Obamacare") has done a thorough job in elating the Act’s supporters, while stirring a large resistant movement on to other side. It is obvious that interpretations of the decision differ drastically. However, what does the ruling, as it stands now, mean for the economy?
In the end, the Act was considered constitutional because of Chief Justice John Roberts’ identification of the individual mandate as a tax—and thus is allowed under the Congressional power to tax. So, of course, the most immediate results are high health premiums and increased taxes. While many supporters believe that health premiums will go down because of the ACA, the reality is that millions of new Americans will be covered under the Act, and this will increase costs for all consumers. Two new Medicare surtaxes come into effect in January—0.9% for wages over $250,000 for families or $200,000 for non-families, and one 3.8% tax for investment income.
Regardless of the ACA’s outcome, we can expect to see results even before November.
One of the most immediate results is a large flux in support for the Republican party. In just the 24 hours after the SCOTUS decision to uphold Obamacare, Mitt Romney announced that he raised over $4.6 million in donations. Ironically, Romney might win from losing.
Republicans are already announcing plans to repeal the ACA, with Mitt Romney stating that he would remove Obamacare almost immediately if he were to take office. If the ACA is not repealed, the most hard-hitting measures will fall into place in 2014.
While the future of Obamacare is under question, there is no doubt that SCOTUS’ decision Thursday was a monumental one. The question now is its longevity.