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Should you pay the #obamacare tax? Crunch the numbers for yourself!

Here is a handy chart for individuals looking to calculate their Obamacare tax. I’m putting it up because there’s a bit of confusion out there over how much people can expect to be taxed. For example: the $95 or 1% rule is on taxable income, not total income. This means that you have to subtract $10K currently to determine how much the government will tax you for not having health care, which of course removes $100 from your final yearly tax obligation. For some strange reason the administration isn’t too keen in letting people know just how small the tax is going to be for young, unmarried workers.

Crazy, huh?

Anyway, below is the chart, based on the data found here. Remember, the final tax will be the higher of the flat rate, and a percentage of adjusted taxable income; everybody’s getting hit with this.

2014 2015 2016
$ 10,000 $ 95 $ 325 $ 695
$ 20,000 $ 100 $ 325 $ 695
$ 30,000 $ 200 $ 400 $ 695
$ 40,000 $ 300 $ 600 $ 750
$ 50,000 $ 400 $ 800 $ 1,000
$ 60,000 $ 500 $ 1,000 $ 1,250
$ 70,000 $ 600 $ 1,200 $ 1,500
$ 80,000 $ 700 $ 1,400 $ 1,750
$ 90,000 $ 800 $ 1,600 $ 2,000

But I hear you say, What about the subsidies, Moe? OK, let’s talk about those. Below is a table showing the cost of a Bronze-level health care plan after subsidies, compared to that of the Obamacare tax. Numbers were calculated using the Henry J Kaiser Foundation’s subsidy calculator; as should be obvious, they are estimating an average yearly cost for a Bronze plan to be $2,501.

Income Bronze Tax Difference
$ 20,000 $ 505 $ 100 $ (405)
$ 30,000 $ 1,995 $ 200 $ (1,795)
$ 40,000 $ 2,501 $ 300 $ (2,201)
$ 50,000 $ 2,501 $ 400 $ (2,101)
$ 60,000 $ 2,501 $ 500 $ (2,001)
$ 70,000 $ 2,501 $ 600 $ (1,901)
$ 80,000 $ 2,501 $ 700 $ (1,801)
$ 90,000 $ 2,501 $ 800 $ (1,701)

The magical cut-off number, according to Kaiser, is around $16,600. An individual making that much money will be about as well off if he or she gets a Bronze level health care plan as s/he would simply paying the $95 tax. Anybody making between that and about $33,000 will get some subsidies, but – and here’s the important part – it’ll still be cheaper to pay the tax. Anybody making more than that? …No subsidies, obviously; and to be fair, people making that kind of money start to be the kind of people who have health care through their jobs anyway*.

So. For reference, a minimum wage job… well, prior to Obamacare a full-time minimum wage job would pay about $15K/year. People in those positions? …Yeah, probably, it would make sense for them to go ahead and deal with the acres of federal paperwork that will undoubtedly go into getting a subsidy to offset Obamacare costs**. Folks making about $30 grand (which is a common number quoted whenever people try to pin down just what median income is for this age level***)? Well, eighteen hundred bucks is a lot of money to subtract from an individual person’s budget. Particularly if that person isn’t sick in the first place, and doesn’t expect to be – and knows that if s/he does get sick, s/he can go get insurance anyway.

Shorter Moe Lane: …why does the Obama administration expect that young people are voluntarily going to sign up for a program that will cost them significantly more than the tax for noncompliance?

Moe Lane (crosspost)

*At least, they’re the kind of people who have health care through their jobs now. Ask me again in a year.

**If they’re below 26, they can of course continue to hope that their parents will be able to keep their health care, at a level that will not trigger the Obamacare tax mandate. Of course, if they’re below 26 then they’re probably possessed of a mindset that would shrug the entire paperwork thing off as too much of a hassle, which is actually a tendency that professional bureaucrats should learn to take into account.

***Seriously, it’s hard to get good numbers on this. If I was suspicious-minded, I might speculate as to why.

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