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Calculate the Tax Burden of New Federal Health Care Laws

New Online Tool for Consumers 

Washington, DC, December 6, 2011—The Tax Foundation has created a new online calculator for tracking the tax burden created by the Patient Protection and Affordable Care Act, signed into law by President Obama in March 2010. The coverage provisions in the health care bill cost $788 billion in new spending over the next decade. This is paid for $511 billion in cuts elsewhere, as well as $420 billion in new taxes. This calculator shows how the new taxes will affect American households and explains how they work.

“Last year’s health care law was complex and included dozens of provisions impacting Americans as consumers and taxpayers, so it’s not surprising that there’s a great deal of confusion surrounding the legislation,” said Tax Foundation analyst and programmer Nick Kasprak. “We hope the Health Care Tax Calculator will help individuals get a better idea of how revenue-raising provisions of the new law will collectively impact them.”

The Health Care Tax Calculator aggregates the cost of many different taxes included in the Patient Protection and Affordable Care Act using user-provided data, giving consumers an overall view of how those costs will affect their household budget. Main components include the “Cadillac tax” on employer-provided health plans above a certain cost, new payroll taxes on high-income earners, an annual fee on prescription drug manufacturers, and a new excise tax on medical devices.

“We are glad to provide this tool to estimate tax costs, but users should remember that there are further costs to current health care laws as well,” said Kasprak. “For example, the impact of the individual and employer mandates, which are designed to change consumer behavior rather than raise revenue, need to be considered in addition to direct tax costs, as well as spending cuts to Medicare Advantage.”

In addition to the Health Care Tax Calculator , the Tax Foundation provides several other online data tools for consumers, taxpayers, and policymakers to examine the effects of taxes at the federal, state, and local level. Available tools include a searchable database of property taxes by county, the marginal tax rates calculator and graph, and state-to-state migration data.

The Tax Foundation is a nonpartisan research organization that has monitored fiscal policy at the federal, state and local levels since 1937. 

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