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Obamacare Will Mean Tax Penalty for Six Million Middle Class Americans

WASHINGTON, D.C. – Congressional analysts  say that almost six million Americans will face a tax penalty under President Barack Obama’s health overhaul for failing to get insurance. That number is significantly more than first estimated, and it will be the middle class that will be most affected by the new legislation.

The findings from the nonpartisan Congressional Budget Office are 50 percent higher than previous projections by the CBO in 2010. While this is still a small percentage of the population, it contradicts President’s Obama pledge during his first campaign to raise no taxes on couples making under $250,000.

“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.

Beginning in 2014, effectively every legal resident of the U.S. will be required to carry health insurance or face a tax penalty, barring certain exemptions for financial hardship and religious objections. The majority of Americans will not have to worry about the requirement since they currently have coverage through employers, government programs like Medicare, or by buying their own policies.

A spokeswoman for the Obama administration said 98 percent of Americans will not be affected by the tax penalty. She also inferred that those who will face a tax penalty will do so because they are shirking their civic responsibilities.

“This (analysis) doesn’t change the basic fact that the individual responsibility policy will only affect people who can afford health care but choose not to buy it,” said Erin Shields Britt of the Health and Human Services Department. “We’re no longer going to subsidize the care of those who can afford to buy insurance but make a choice not to buy it.”

The penalty will be collected by the IRS, just like taxes. The budget office said the penalty will raise $6.9 billion in 2016.

Some people might still decide to remain uninsured because they object to government mandates or because they feel they would come out ahead financially even if they have to pay the penalty. Health insurance is expensive, with employer-provided family coverage averaging nearly $15,800 a year for a family and $4,300 for a single plan.

The Supreme Court has allowed individual states to opt out of a major Medicaid expansion under the law, but the Obama administration says it will exempt low-income people in those states. Many Republicans still regard the insurance mandate as unconstitutional and rue the day the Supreme Court upheld it.

Romney spokeswoman Andrea Saul said Wednesday the new report is more evidence that Obama’s law is a costly disaster. “Even more of the middle-class families who President Obama promised would see no tax increase will in fact see a massive tax increase thanks to Obamacare,” she said.

 

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