Skip to comments.Senate Should Repeal Regressive Tax on the Uninsured
Posted on 12/01/2017 9:45:13 AM PST by Tolerance Sucks Rocks
Senate Democrats who fret over the distributional effects of tax cuts should thank their GOP colleagues for giving them the chance this week to vote on repealing one of the most regressive taxes: the Obamacare tax on the uninsured.
This tax disproportionately falls on those with incomes less than $50,000, while exempting many households earning six-figure salaries. Many who qualify for subsidies will have to choose between paying the tax and buying policies that offer shabby coverage with onerous deductibles that could stick them with big medical bills.
This wasnt the way the so-called individual mandate was supposed to work. Obamacares architects theorized that threatening young and healthy uninsured people with a tax penalty would induce them to buy a product they didnt want. They expected a big influx of younger people to pay premiums and file few claims, creating a stable market with affordable premiums.
Millennials spoiled this dream. Their enrollment rates disappointed expectations, roiling insurance markets and driving premiums higher.
That, coupled with President Donald Trumps decision to discontinue unappropriated cost-sharing reduction payments to insurers that a federal judge ruled were unconstitutional, drove insurers to hike their 2018 premiums even higher.
Most of these increases fell on silver plans, creating a dilemma for many people eligible for premium subsidies. The perverse result is that many subsidy-eligible people end up being subject to the mandate, while many with much higher incomes are not.
Consider a 31-year-old who earns $32,000. She would qualify for an average subsidy of nearly $2,500, according to the Kaiser Family Foundations premium calculator.
She would have several choices. She could buy a silver plan at an average annual premium net of subsidies for a little more than $2,700.
(Excerpt) Read more at dailysignal.com ...
The tax that was a fee, not a tax before it became a tax?
What? I thought the penalties were no longer enforced by the IRS?
What about the head tax on employees that is the employer mandate?
Doesn’t matter. They could be under the next administration.
They should get rid of that and all other 0bamacare taxes, too.
Does anybody know if the Senate bill gets rid of the mandate or not?
I hope that it still does after Vote-O-Rama.
If it kills the mandate that alone would make this bill a victory. Making Americans buy a product counterdicts the very principles upon which this nation was founded on.
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