Effects of the Health Care Law: Should You Worry?

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WASHINGTON -- President Barack Obama and congressional Democrats are selling their new health care law as a victory for American workers.

However, in light of how much it will cost to finance the reforms, the question lingers -- Are Americans really winners or losers with this new law of the land?

Economists Raise Concerns

As Americans across the country prepare to file their income tax returns, some analysts are warning about the new taxes people will be paying for the reforms in the new health care law both directly and indirectly.

"All tax increases will affect everybody to some extent, but these tax increases are legally levied on rich people," said Gerald Prante, a senior economist at the Tax Foundation.

Donald Luskin, chief investment officer for Trend Macrolytics spoke with Pat Robertson on Tuesday's The 700 Club about the impact of the new taxes. Click play to watch the interview.

The White House says the plan to expand coverage to 32 million uninsured Americans is mostly paid for by cuts to Medicare and increased taxes on the wealthy.

The first tax to go into effect? A 10 percent tax on the tanning industry starting July 1.

"We've done it in the past," Prante said. "Some have defended it along the lines of sin taxes - alcohol and tobacco - and now we've gone to tanning. Next is whether that applies to food and junk food and soda."

'Cadillac' Penalties

Next year, businesses must start including the value of their employees health benefits on W-2 forms, which Prante says could open the door for the government to tax those benefits sometime in the future.

Some conservatives are warning that these new taxes are one reason to get rid of the new law.

"Repeal most certainly is in the best interest of the American people because this bill will lead to economic harm if it's left in place," Rep. Michele Bachmann, R-Minn., told CBS's Face the Nation.

By the time the plan is fully in effect in 2018, those with high-value health benefits - or Cadillac plans - will be hit with a 40 percent penalty.

"Basically employers will switch from giving them generous health insurance to less generous health insurance and then just raise their wages and that'll be taxed. That'll probably be where most of the revenue comes in," Prante explained.

Starting in 2014, the mandate that every American have health insurance coverage will translate into fines on individuals who don't buy it and employers who don't provide it.

The Indirect Effects

Meanwhile, experts say there are indirect ways Americans will be paying as well.

For example, next year drug makers and importers will start paying an annual fee raising billions of dollars in revenue. The same would apply medical equipment manufacturers starting in 2013. Those "fees" will ultimately get passed down to the consumer.

But that's not the end of it. Even all the new taxes won't be enough to pay for health care and cut the huge deficits in the years ahead.

So some argue Americans will inevitably see a national sales tax that every consumer would pay.

Economists say all this talk about taxes is not the best idea in the midst of an economy trying to recover from a very deep recession.

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