Even though some people argue the healthcare law is not a tax but instead a penalty, right now it's been ruled the former – and has become one of the key issues in Election 2012.
In a July 12 poll by Quinnipiac University in Connecticut, 55% of American voters said ACA is a tax hike. But it doesn't necessarily mean they are against it.
Interestingly, 48% agreed with the U.S. Supreme Court decision to uphold the law, while 49% believe that the U.S. Congress should repeal it.
In addition, 55% of American voters said a presidential candidate's position on health care is "extremely important" or "very important" to their November vote. Those who think Obamacare breaks the president's promise of not raising taxes could be lured to a GOP presidential vote.
Peter Brown, assistant director of the Quinnipiac University Polling Institute, said in a press release, "President Barack Obama has worked mightily to avoid the 'T' word, but most American voters say the ACA is in effect a tax hike. The big question is whether the Republicans can sell the idea to voters that the president's Affordable Care Act breaks his promise not to raise taxes on those who make less than $250,000. That's why what voters believe on this issue matters."
Whether it is a tax or a penalty, either way people are going to have to pay.
Who Will Pay the Healthcare Tax ?
Of course, everyone thinks they'll be the victims of increased taxes, but that's not exactly the case.
According to USA Today, over the next decade Obamacare will raise an estimated $800 billion-plus from taxes, fees and penalties with 40% of it coming from the 3.5 million households with adjusted gross incomes (AGI) higher than $200,000.
Who will pay the rest? Employers, healthcare providers and insurers.
For middle-income earners, the impact they feel from the law is "on average going to be relatively small," Donald Marron, director of the non-partisanTax Policy Center, told Forbes. "The bulk of the taxes are aimed at corporations and high-income folks."
USA Today further noted that in the big picture, less than 10% of the nation's 140 million tax filers are likely to pay more.
What if You Can't Pay the Healthcare Tax?
But what if you're currently uninsured and don't have the means to pay for healthcare (or really, anything else)? Won't you have to pay something under Obamacare?
Maybe, but keep in mind this won't take effect until 2014. Let's be optimists and say the unemployment rate will be down by then and those who are currently unemployed will have a full-time job and an employer offering healthcare.
In an interview with Forbes, Jonathan Gruber, MIT economist and an architect of both Romneycare and Obamacare, estimated that approximately 40%of the uninsured population will not be obligated to the mandate.
Gruber explained that individuals who either have income less than the federal poverty line or who don't file a tax return will not be hit by the $695 fine. Families of four whose income falls below the assumed poverty level of $27,000 will also be exempt.
For those individuals with higher incomes who do not have health insurance, look for the $695 fine (or 2.5% of income-whichever is higher) from the IRS.
And for those excluded from the $695 fine, Medicaid will expand and cover these people with insurance.
At the end of the day, the goal of Obamacare is to increase the number of people with health insurance-as many as 30 million more, according to The Baltimore Sun.
While the healthcare law is perceived by many as a negative because it is a healthcare tax, for some it will come as much-needed relief.
Related Articles and News:
- Money Morning:
Obamacare Ruling: Key Takeaways for Investors and Taxpayers
- Money Morning:
How to Trade the Obamacare Ruling
- Quinnipiac University:
Poll: Health care is a tax hike
- USA Today:
Few pay more taxes under health care law
Obamacare's Dark Secret: The Individual Mandate is Too Weak
- The Baltimore Sun:
How Obamacare will help the uninsured and unemployed