Health care law's tax hikes are coming: Who pays?

WASHINGTON — Who gets thumped by higher taxes in President Barack Obama's health care law? The wealthiest 2 percent of Americans will take the biggest hit, starting next year. And the pain will be shared by some who aren't so well off — people swept up in a hodgepodge of smaller tax changes that will help finance health coverage for millions in need.

For the vast majority of people, however, the health care law won't mean sending more money to the IRS.

And roughly 20 million people eventually will benefit from tax credits that start in 2014 to help them pay insurance premiums.

The tax increases — plus a mandate that nearly everyone have health coverage — are helping make the law an election-year scorcher. Obama is campaigning on the benefits for the uninsured, women and young adults. His rival, Mitt Romney, and Republican lawmakers are vowing to repeal "Obamacare," saying some health care reforms are needed but not at this cost.

A rundown of the most significant tax changes — and who pays:

THE 2 PERCENT

Who pays: About 2.5 million households — individuals making more than $200,000 per year, couples $250,000.

How much: A 0.9 percent Medicare tax on wages above those threshold amounts; an additional 3.8 percent tax on investment income. Should raise $318 billion over 10 years.

The lowdown: Together these are the biggest tax increase in the health care law. For those wealthy enough to owe it, the 3.8 percent investment tax comes on top of the existing 15 percent capital gains rate, which is set to rise to 20 percent next year unless Congress acts.

When: 2013

ARTIFICIAL-SUN WORSHIPPERS

Who pays: The 28 million people who visit tanning booths and beds each year — most of them women under 30, according to the Journal of the American Academy of Dermatology.

How much: A 10 percent tax on the price of tanning. Expected to raise $1.5 billion over 10 years.

The lowdown: Tanning salons were singled out because of wide agreement among medical experts that baking under ultraviolet lights increases the risk of skin cancer.

When: Took effect in 2010.

THE "CADILLACS" OF COVERAGE

Who pays: Insurance companies or businesses that provide plans with premiums of more than $10,200 per person or $27,500 per family, not including dental or vision coverage. Employees covered by these so-called "Cadillac" benefits probably will feel the pinch.

How much: 40 percent excise tax on any amount of premium that exceeds the threshold. Expected to raise $111 billion over five years.

The lowdown: The majority of health plans aren't affected because they don't cost enough: Workplace family coverage now averages about $15,000, including the portion paid by the employer, according to the Kaiser Family Foundation's survey. But some middle-class workers, especially those with strong union contracts, have health plans that exceed the threshold. Also hit are corporate bigwigs whose employer-paid plans cover virtually all expenses and lots of perks, akin to tax-free income.

When: 2018

BUSINESSES SET TO BOOM

Who pays: Insurers, drug companies, medical device makers. And some of their customers.

How much: More than $165 billion over 10 years