Following the Supreme Court’s Affordable Care Act ruling, some people are claiming the Affordable Care Act is a tax on the American people, because the Chief Justice justified the penalty for those who choose to go without insurance as a tax and thus within the powers of Congress to enact. Some have even said it is the biggest tax increase on the middle class in history.
But let’s look at the facts: The Affordable Care Act will provide millions of families with large tax credits to make health care more affordable. Only about 1% of Americans who could afford insurance but would refuse to buy it would have to pay the “tax”, which would average $600.
The Center for American Progress shows how Obamacare is actually a major tax cut for many families:
- An estimated 16 million Americans will get tax credits for buying health insurance at an average cost of $5,210, for a total of $686 billion dollars in tax credits.
- An estimated 4 million (1%) will choose to go without insurance and pay the penalty at an average cost of $600, amounting to $54 billion in penalties (called “shared responsibility” penalties).
Source for statistics: The Center for American Progress