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One of the most contentious parts of Obamacare is the Individual Mandate Excise Tax Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax.  ( there are exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and other hardship cases as determined by HHS).

Throughout the entire Obamacare debate, many of those opposed to mandate warned that this mandate would end up being a burden on the middle class. The bills supporters (including the POTUS) accused us of spreading misinformation and lying. Now that the bill has been passed the CBO has released a new estimate of the effects of the mandate. No surprise here, it is the President and the Obamacare supporters who were lying. The individual mandates in the Obamcare bill will hurt the middle class.

Beginning in 2014, the Patient Protection and Affordable Care Act (Public Law 111-148), in combination with the Health Care and the Education Reconciliation Act of 2010 (Public Law 111-152), requires most residents of the United States to obtain health insurance and imposes a financial penalty for being uninsured. That penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments) or a percentage of the household’s income that rises to 2.5 percent for 2016 and subsequent years (also subject to a cap). 

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have estimated that about 21 million nonelderly residents will be uninsured in 2016, but the majority of them will not be subject to the penalty. Unauthorized immigrants, for example, are exempted from the mandate to obtain health insurance. Others will be subject to the mandate but exempted from the penalty—for example, because they will have income low enough that they are not required to file an income tax return, because they are members of Indian tribes, or because the premium they would have to pay would exceed a specified share of their income (initially 8 percent in 2014 and indexed over time). Individuals may also be granted waivers from the penalty because of hardship and may be exempted from the mandate on the basis of their religious beliefs. 

Among those who are subject to the penalty, many will voluntarily report on their tax returns that they are uninsured and pay the amount owed. However, other individuals will try to avoid making payments. Therefore, the estimates presented here account for likely compliance rates, as well as the ability of the Internal Revenue Service (IRS) to administer and collect the penalty. In total, about 4 million people are projected to pay a penalty because they will be uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf). 

CBO and JCT estimate that total collections from those penalties will be about $4 billion per year over the 2017–2019 period. The attached table shows the distribution of payments that are projected to be made for being uninsured in 2016 (which the IRS will actually collect in 2017) by income measured as a percentage of the federal poverty level (FPL). In general, households with lower income will pay the flat dollar penalty, and households with higher income will pay a percentage of their income. In 2016, households with income that exceeds 400 percent of the FPL are estimated to constitute about one-third of people paying penalties and to account for about two-thirds of the receipts from those penalties.

Allow me to put this in perspective. According to the CBO projection for 2016 the first line, less than 100% is families making less than $24,000/year. The greater than 500% is families making more than $144,000 per year. (I could do a mixture of singles incomes and families but that would make the President look worse).

Taking another look at the chart families making $144,000 or less represent 74% of the people paying the mandate tax and they will be paying 55% of the mandate dollars (well below the President’s promise of no taxes on families making less than $250,000.

This information HAD to be known before the bill was passed, If those of us who were warning of the mandate would hurt the middle class, knew just from logic, then the President with all his resources had to know. And if he is lying about this, it makes you wonder what else is he lying about.

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