STUMP » Articles » Obamacare Watch: Get ready for tax season 2015 » 14 November 2014, 16:45

Where Stu & MP spout off about everything.

Obamacare Watch: Get ready for tax season 2015  

by

14 November 2014, 16:45

Everybody is talking about the Gruber videos (seems we’re up to five videos now), but as has been noted by many people before, we already knew we were lied to about all sorts of grand and glorious things Obamacare supposedly promised.

I want to talk about what really will get people’s attention: reduced tax refunds in 2015.

I see in a previous post I claimed that the individual coverage mandate is supposedly gone, sub rosa, until 2016, but I don’t think that’s going to fly with TurboTax and the like.

After all, Drudge paid the penalty/tax in his quarterly filings and it’s obviously because he knows the penalty/tax will apply to him. I really doubt Drudge would unnecessarily pay a fairly large tax just to make a political point.

But I want to address what the actual penalty will be, because I’ve seen some very bad math floating around.

Let’s take a look at this piece:

1. PENALTIES WILL RISEINDIVIDUAL MANDATE. In 2014, people are facing a penalty of $95 per person or 1% of income.

In 2015, the penalty will more than triple to $325 per person or 2% of income, whichever is higher.

If an American failed to get coverage this year, the penalty will be taken out of their tax refund in early 2015.

The penalty is not tripling, but doubling (going from 1% of income to 2% of income).

Everyone fixates on that lower number — “Oh, $95? That’s nothing.” — forgetting the key phrase: “whichever is higher”.

What income level would you need to have to pay more than $95?

$9,500 for a single person. That’s below the federal poverty level (FPL) for a single person.

Now, maybe you have more people in your family, so it will be $95 per person. Let’s see how that works out:

2 people – $190. If you make more than $19,000, then you get hit with the 1%. (at least this is above the FPL)

3 people – $285. If you make more than $28,500, you get hit with the 1%.

4 people – $380. If you make more than $38,000, you get hit with the 1%.

Given that median household income in the U.S. is about $52K, you see that a lot of people may be getting hit by these extra taxes.

But there’s good news! There is a cap to the penalty/tax:

Federal officials announced on July 24, 2014, that the shared responsibility payment for 2014 will be capped at $2,448 per person and $12,240 for a family of five.

Think on this — to hit that cap such that 1% of your income = $2,448, you’d have to make $244,800 dollars per year.

Uh, yeah, basically everybody who didn’t get compliant health coverage in 2014 are seeing a 1 percentage point hike in their taxes.

Hmmm, I wonder what the average tax refund size is.

Oh look:

Average tax refund so far: $2,831

Watch that number drop next year. Won’t that be fun. (If you want to calculate some estimates for yourself, check out this calculator)

Of course, people won’t find out about those penalties as late as April 15, 2015. Some people start work on their taxes in January, filing as soon as they have their tax forms from employers.

Boy, are people going to be angry.

And that’s just the first year of penalties. It increases after that, up to 2.5% of income (less particular deductions).

Oh, the next couple years are going to be so much fun, aren’t they?

WELL THIS IS AN UPDATE: Yeah, there’s a sixth Gruber video, and it’s really bad.

Oh Boy: In Jon Gruber’s Newest (Sixth) Video, He Explains How Obama and Democrats Conspired to Get Rid of Tax Exemptions for All Insurance Plans Without Anyone Noticing

THEREFORE, OBAMACARE MUST BE DESTROYED.


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