During the presidential campaign Barack Obama claimed that under his tax plan 95 percent of working Americans would get a tax cut.
But given where President-elect Obama’s health care reform initiative is likely heading, it would be more accurate to say that every American will see a tax increase.
Obama was very careful to say during the campaign that he did not want to require every American to buy health insurance—known as an individual mandate—or pay a fine, as his Democratic challenger Hillary Clinton wanted to do.
Rather, he claimed he would only impose a health insurance mandate on children. Of course, that’s a distinction with only a minor difference—since children don’t buy their own health insurance, their parents do.
But since all of the congressional Democrats now driving the health care reform effort want an individual mandate, and since Barack Obama’s campaign promises have turned out to be more, uh, flexible than most of his supporters thought, you can bet he’ll sign legislation that includes an individual mandate.
Of course, Obama has always supported an employer mandate, requiring employers to provide health insurance or pay into some government pool (known as “pay or play”).
So how could a mandate that a person pay for health insurance be anything other than a tax increase? And why did the media—and even Republicans—give Obama a free pass on explaining how the mandate isn’t a tax?
How much of a tax? We don’t know yet, but the two-year-old health care reform plan in Massachusetts will likely be the model.
For 2008, the state considers premiums of $792 per month ($9,500 a year) affordable for families making $90,000 to $110,000. And the penalty for not buying coverage is $912.
In other words, the Democratic plan will likely impose a tax of between $1,000 and $10,000, depending on whether an individual does or does not buy coverage—far more than any “tax cut” Obama promised.
Of course, most Bay Staters won’t feel the tax directly because they already have employer- or government-sponsored health insurance. But lose a job or become self-employed, and they will find out how much this new hidden tax hurts.