A Project of The Annenberg Public Policy Center

Realtors, the 3.8% ‘Sales Tax’ and $247 Medicare Premiums


Q: Is the National Association of Realtors lobbying to repeal a 3.8 percent “sales tax” on homes before it takes effect in 2013?

A: No. There’s no such “sales tax” in the new health care law. And Medicare premiums aren’t going to $247 either. But these virulent falsehoods keep going around.

FULL QUESTION

Is this true?

Subj: Homeowners & Medicare Folks…. Must Read

Please read and forward this even if you don’t own a home.

If you own a home please read this.

THIS WILL BLOW YOU AWAY !!!!!

The National Association of REALTORS is all over this and working to get it repealed, before it takes effect. But, I am very pleased we aren’t the only ones who know about this ploy to steal billions from unsuspecting homeowners. How many REALTORS do you think will vote Democratic in 2012?

Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That’s $3,800 on a $100,000 home, etc. When did this happen? It’s in the health care bill and goes into effect in 2013.

[EET ]

Why 2013? Could it be to come to light AFTER the 2012 elections? So, this is “change you can believe in”? Under the new health care bill all real estate transactions will be subject to a 3.8% Sales Tax.

If you sell a $400,000 home, there will be a $15,200 tax.

This bill is set to screw the retiring generation who often downsize their homes. Does this make your November and 2012 vote more important?

Oh, you weren’t aware this was in the Obamacare bill? Guess what, you aren’t alone. There are more than a few members of Congress that aren’t aware of it either http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home>

Look carefully at the 2014 Medicare Fee rate below compared to the 2013 rate

EVERYONE SHOULD KNOW, NOT ONLY SENIORS

For those of you who are on Medicare, read the following. It’s short, but important and you probably haven’t heard about it in the Marxist liberal media.”The per-person Medicare Insurance Premium will increase from the present Monthly Fee of

$96.40, rising to:

$104.20 in 2012

$120.20 in 2013

And

$247.00 in 2014.”

These are Provisions incorporated in the Obamacare Legislation, purposely delayed so as not to confuse the 2012 Re-Election Campaigns. Send this to all Seniors that you know, so they will know who’s throwing them under the bus.

REMEMBER THIS IN NOVEMBER 2012 AND VOTE!!!

[/EET]

 

FULL ANSWER

Two years ago, we gave the facts about a mythical 3.8 percent “sales tax” on homes, explaining that the vast majority of those who sell their homes won’t pay a dime. The tax will fall only on net investment income of a high-income few. Even for them, it’s not a “sales tax” on every dollar of the selling price of a home, but a tax on the profit. Furthermore, for a principal residence, only the amount of profit that exceeds $250,000 (or $500,000 in the case of a couple) will be taxed.

And a year ago we also took on a completely fabricated claim that the new health care law would cause monthly Medicare premiums to more than double, to $247, in 2014. That’s not remotely close to the truth. Medicare officials currently predict the actual figure will be $112.10. (See page 229 of the recently released Medicare trustees report.)

Now these two bogus claims have been spliced together in a version that continues to circulate with undiminished vehemence. But two lies don’t make a truth.

What the Realtors Say

Like some earlier versions, this one leads with a claim that the National Association of Realtors is “working to get it [the nonexistent 3.8 percent ‘sales tax’] repealed, before it takes effect.” That’s not true either. In fact, the Realtors have been trying very hard to knock down this rumor.

In 2010, the association posted a video of its director of tax policy, Linda Goold, saying the “biggest misconception” about the tax is that it is a sales or “transfer” tax falling on every dollar of the selling price. She also noted that it will never affect anyone with less than $200,000 of income ($250,000 for a couple).

The association also published (and posted online) an 11-page brochure giving examples of how the tax will actually operate in various situations. For example, a high-income couple that makes a profit of $525,000 selling their primary residence would owe $950 — 3.8 percent of the amount of profit over $500,000.

This year, the Realtors group updated an informative Q&A on its website giving additional examples. And on Feb. 21 this year, Realtors president Moe Veissi posted a video podcast in which he stressed to members:

Realtors president Moe Veissi: It’s not a tax on real estate across the board. It’s not a transfer tax. It applies only in some cases on capital gains, and normally on a much higher income bracket than most people will qualify for.

And yet, despite the Realtors’ efforts, the false rumor keeps spreading.

So how could the Realtors be working to get a nonexistent “sales tax” repealed? Obviously, it is not. And the organization isn’t among those lobbying to get the health care law repealed either.

In fact, the association states that it “has advocated for reform of the health insurance markets that provide coverage to the self-employed and small employers for more than six years.” That’s because 28 percent of the organization’s members — or about 350,000 of them — lack health coverage. “Solving the problem of the uninsured must be a top legislative/regulatory priority for the nation and states,” the Realtors group says.

In its “advocacy agenda” for 2012, the Realtors make no mention of either the health care law or the 3.8 percent tax on net investment income. On taxes, the association seeks to keep home mortgage interest payments deductible from federal income taxes (even for second homes). It is also opposing any changes that would reduce or eliminate deductions for property taxes.

Just to be sure, we asked the Realtors about the lobbying claim. A spokeswoman, Sara Wiskerchen, messaged us saying the association opposed the tax when it was first proposed, but isn’t currently lobbying against the law:

Realtors spokeswoman Sara Wiskerchen: NAR has never taken a formal position on the health care law and therefore it isn’t true that we are lobbying to have it repealed. As for the tax itself – it was not introduced, discussed or reviewed until hours before the final debate on the massive health care legislation began; NAR expressed its strongest possible objections against it, but the legislation passed on a largely party-line vote.

More Medicare Premium Nonsense

This version of the message also tacks on a made-up claim that the health care law is going to drive Medicare premiums to $247 a month in 2014. That’s also false, as we originally reported April 1, 2011, in an article we headlined “Premium Nonsense on Medicare.” And  it’s even less true today than it was then, so we’re happy to give a brief update.

The law actually doesn’t change the way Medicare premiums are set. The basic monthly premium is set each year at a level calculated to pay for 25 percent of the cost of the coverage.

The official outlook for premiums comes from Medicare’s chief actuary. It appears on page 229 of the annual report of the Medicare trustees, which was released April 23. And it shows just how far from reality this message is.

The current basic premium for Medicare is $99.90 per month — not $104.20 as the message claims.

And that is currently expected to rise to $109.10 next year — not $120.20 as claimed.

As for 2014 — when the new health care law will supposedly peg the basic rate at $247,  according to the email — the system’s actuary currently predicts it will really be $112.10.

That’s less than half the figure the email’s author pulled from his or her imagination. It’s even $5 less than what we reported a year ago, based on what the Medicare actuary was predicting at the time.

Repeating a falsehood might make some people believe it, but it can’t make it true. In this case, a constantly repeated lie has gotten less true.

Bogus ‘Blue Cross’ Message

Update, July 12: But wait there’s more! Like late-night hucksters, the purveyors of viral emails keep finding new ways to peddle their wares. The latest mutation of the bogus claim about skyrocketing Medicare premiums carries the false imprimatur of the BlueCross BlueShield of Alabama.

Here is a copy of the email — with a subject line that says “A message from Blue Cross Blue Shield” — that we received from a reader who questioned its veracity:

We contacted the insurer about the email. Koko Mackin, vice president of corporate communications, issued a statement saying the email contains “incorrect information” that is “not reflective of the Company’s position.” He explained what happened:

Mackin, July 10: This email was not created or approved for distribution by Blue Cross and Blue Shield of Alabama and is not reflective of the Company’s position. It contains incorrect information received by an employee who redistributed it to six others. We have a longstanding policy against distributing chain emails like this, and actions have been taken to reinforce this policy. We apologize for any confusion or concern this email may have caused.

That’s the true message from BlueCross BlueShield.

— Brooks Jackson

Sources

Jackson, Brooks. “A 3.8 Percent “Sales Tax” on Your Home?” FactCheck.org. 22 Apr 2010.

Jackson, Brooks. “Premium Nonsense on Medicare.” FactCheck.org. 1 Apr 2011.

U.S. Department of Health & Human Services. “2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.” 23 Apr 2012; 229.

Freedman, Robert. “The 3.8% Tax Is Not a Real Estate Transfer Tax.”  Realtor Magazine. 24 Nov 2010.

National Association of Realtors. “The 3.8% Tax; Real Estate Scenarios & Examples.” Undated. Downloaded 30 Apr 2012.

National Association of Realtors. “Health Insurance Reform: Frequently Asked Questions (FAQs)” Web page updated 16 Feb 2012; Accessed 30 Apr 2012.

Veissi, Moe. “Feb. 21, 2012: 3.8% Health Care Tax and Realtor Rally Update.” Video podcast. 21 Feb. 2012.

Jones, Blake. “Realtors say despite efforts, tax rumor keeps spreading.” Glens Falls NY Post-Star. 10 Mar 2012.