The Mandate IS a Tax, But Probably Not One That Will Affect You

Ken AshfordHealth CareLeave a Comment

Spin is now the game.  And Republicans are quick to tell you that Obamacare is a huge (some of them are saying "the hugest") tax on middle class people ever.

It's not.  They're lying.

The tax imposed by the individual mandate amounts to either $695 or 2.5 percent of household income for those who don’t have insurance and are not exempt based on income levels. By comparison, the payroll tax cut extension Republicans repeatedly blocked earlier this year would have added 3.1 percentage points to the tax and cost the average family $1,500 a year.

The mandate, meanwhile, would hit a small amount of Americans — somewhere between 2 and 5 percent — according to a study from the Urban Institute. The number could be even lower depending on the law’s success: in Massachusetts, the only state with an insurance mandate, less than 1 percent of the state’s residents paid the penalty in 2009.

The majority of the Affordable Care Act’s other taxes, such as a payroll tax increase and a tax on high-cost health plans, are aimed at upper-income Americans. In exchange, millions of jobs will be created as new people enter the health care system and millions of people will gain access to affordable, quality insurance that they otherwise would not have. The Court’s decision to uphold the entirety of the law will have significant benefits for the nation’s economy.