PoliGraph: Emmer exaggerates impact of health provision

The new federal health care law has cropped in attack ads, in speeches, and most recently in a three-way debate between the gubernatorial candidates.

Republican Tom Emmer said the law is flawed because it’s a federal intrusion on state’s rights. He said the law includes a lot of surprises unrelated to health care policy.

“I had somebody approach me yesterday who said, ‘Do you realize that in the federal health care bill that every real estate transaction I’m going to have to pay money into the federal health care bill to pay for it,'” Emmer said in a response to a question about his take on a legal effort to overturn the law. “On every real estate transaction. What else are we going to find out over the next few weeks?”

Emmer goes wrong in his claim by saying that “every” real estate transaction will be taxed. In fact, it appears that very few Americans will be saddled with the new duty.

The Evidence

Emmer’s staff did not respond to PoliGraph’s requests for more information on this claim, but it appears Emmer’s talking about an obscure provision in the law that imposes a 3.8 percent tax on money that’s made from investment income, which can include rental property and home sales.

Congress’s Joint Committee on Taxation estimates the tax will bring in $210 billion between 2013, when the levy kicks in, and 2019; the funds will be used to pay for Medicare.

But the tax comes with some important criteria.

First, it only applies to individuals making more than $200,000 annually and couples making more than $250,000 annually.

Further, profits on primary residences less than $250,000 for individuals and less than $500,000 for couples are already exempt from taxation.

So, for instance, a couple would have to make more than $250,000 a year and sell their home for more than $500,000 before the tax would become an issue.

It’s hard to say precisely how many people will be subject to the new tax. But what is clear is that the burden will fall on a narrow sliver of the population.

In Minnesota, less than 10 percent of households make more than $200,000 annually. And the average price of a home in the state is roughly $150,000. Nationally, the conservative Tax Foundation predicts the tax will only hit the wealthiest 2 percent of families.

The Verdict

There’s a bit of truth to Emmer’s claim because there is a new tax in the health care bill that could apply to real estate transactions. But Emmer has blown the impact of the new tax way out of proportion by saying every real estate transaction will be taxed. In fact, it appears relatively few will.

That exaggeration makes this claim false.


Minnesota Public Radio News, KSTP debate, Oct. 24, 2010

Thomas, Health Care and Education Reconciliation Act of 2010, accessed Oct. 26, 2010

The Joint Committee On Taxation, Technical Explanation Of the Revenue Provisions Of The “Reconciliation Act Of 2010,” As Amended, In Combination With The “Patient Protection And Affordable Care Act”, accessed Oct. 26, 2010

AARP, The New Health Care Law and Taxes on Home Sales, by Susan Jaffe, Oct. 11, 2010

Kaiser Family Foundation, Summary of the new health reform law, accessed Oct. 26, 2010

The Internal Revenue Service, rules for Maximum Exclusion, accessed Oct. 26, 2010

Realtor.org, September Existing Home Sales Show Another Strong Gain, Oct. 25, 2010

The Tax Foundation, Health Care Reform: How Much Does It Redistribute Income?, by

Patrick Fleenor and Gerald Prante, April 15, 2010

The Minnesota Department of Revenue, 2009 Minnesota Tax Incidence Study, accessed Oct. 26, 2010


The Humphrey Institute

  • I wonder if this is the case if one fallacious story gets traction, then expand upon it.

    Did you hear the claim about the House approved “Cap and Trade” legislation has a provision that you cannot sell your home without meeting the new energy standards ?

    That is false, and has caused the Real Estate industry to respond as it could affect sales.

    Mr. Emmer’s problem is that he was told something that is wrong … and he repeated it. The problem is that with something as well discussed as healthcare reform, Mr. Emmer should have told the person that he would have to check on that before responding … people respect people that state that they do not know an answer but will check it out.

    The other healthcare related “talking point” that is on the campaign is the requirement for tax filings on payments over $600 … this is true, and the Republicans have been vocal about reporting it … but they have not been vocal that the House had a chance to vote to change this and the Republicans voted against changing the provision … sad, but voters are being played.

  • AAA

    Thankfully as President Obama promised, no one’s health insurance is going up and no one is losing their plan…..

    Oh snap……

    But of course we’re going to nit pick each and every person who dares criticize nationalizing 1/6th of the US economy w/ a program that delves deeper into the private lives and businesses of every American……..

    Browsing your pointed attack at Emmer, I have to point out that I believe if someone is pushed into a higher bracket by selling their home, the 3.8% surtax to pay for other people’s health insurance applies. But I’m no expert, and I oppose the Health Care takeover, so you may want to Poligraph me.

  • John May

    I would like to ask Catherine to make sure- or assure me that she IS sure- that just because the profit on a sale of house does not surpass the $250,000/$500,000 mark for [capital gain] tax, that it would not be subject to this new tax related to the health care bill. She seems to make that assertion off handedly and I’m not confident that she has made sure of that. If she were wrong about that- then this tax’s application would not be as rare as she asserts.


  • That there’s a tax on home sales at all to pay for a health care bill that the American people repeatedly & loudly told Congress they didn’t want says why Democrats are going to get beaten like a drum this Tuesday.