Health Care Tax Penalty Investment Fee Will Hit Six Million People
The number of Americans who will suffer a severe financial penalty under the Patient Protection and Affordable Care Act has been lowballed by at least half, according to the Congressional Budget Office (CBO).
The CBO, which in 2010 projected 4 million people would be subject to an uninsured tax under the Affordable Care Act (ACA or Obamacare), yesterday raised that figure to 6 million.
Obamacare's "individual mandate," which for the first ime in American history penalizes citizens for economic inactivity, will overwhelmingly hit the very people President Obama promised not to penalize in his 2008 campaign. From Associated Press' Ricardo Alonso-Zaldivar:
The numbers from the nonpartisan Congressional Budget Office are 50 percent higher than a previous projection by the same office in 2010, shortly after the law passed. The earlier estimate found 4 million people would be affected in 2016, when the penalty is fully in effect.
That's still only a sliver of the population, given that more than 150 million people currently are covered by employer plans. Nonetheless, in his first campaign for the White House, Obama pledged not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
And the budget office analysis found that nearly 80 percent of those who'll face the penalty would be making up to or less than five times the federal poverty level. Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four.
Average penalty: about $1,200 in 2016.
"The bad news and broken promises from Obamacare just keep piling up," said Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, who wants to repeal the law.
Starting in 2014, virtually every legal resident of the U.S. will be required to carry health insurance or face a tax penalty, with exemptions for financial hardship, religious objections and certain other circumstances.
The individual mandate (which Reuters says will bring in between $7 billion and $8 billion in annual federal revenue), was the most controversial provision of Obamacare, with the administration's lawyers arguing simultaneously that the mandate was a penalty rather than a tax and also that the mandate was authorized under either Congress' interstate commerce powers or its taxation powers. In a convoluted ruling that undermined most of the administration's own arguments, the Supreme Court in June nevertheless upheld the individual mandate as a straight tax. Advocates of limited federal powers such as legal scholar Randy Barnett have argued that this was a victory for enumerated powers. Which won't help the millions of people (this writer included) who will be getting our pockets picked.