Ray Jay wrote:I don't think so; for one, in many cases it is based on actual income; also, if your income is below a certain level, you are not subject to the mandate.

I believe the tax is $95 or 1% of income in 2014 and increasing to $695 or 2.5% of income in 2016. However, I believe it is capped at the national average premium for a bronze level plan. Further, the income level for mandate exemption is 133% of federal poverty which according to this website is $14,856 for an individual. That is not a lot of money. Now, while you do get some kind of premium assistance up to 300% of poverty level, or $33,510 for an individual, you still have to get the insurance or pay a tax. That means if you make $35,000 a year you have to buy insurance paying full premium or pay a tax. Now I tried to live on $30,000 a year as a single guy. It was hard to do even with a roommate. And that was next to 15 years ago.

Tell me this really isn't going to fall disproportionatly harder on the lower and middle incomes? Isn't that the definition of a regressive tax? Perhaps I am mistaken about my understanding of the definition,

It certainly is a complicated penalty or tax or whatever it is We would have to run the numbers when it actually kicks in but it doesn't look regressive to me since it is largely based on income and because of the premium assistance.

The definition of a regressive tax is one that taxes a higher percentage of income of lower income people. Cigarettes and gas neatly fall into that category. Our income tax code is generally progressive -- in spite of what Buffett says -- in that it taxes a higher percentage of income for those who make more.

Ray Jay wrote:The definition of a regressive tax is one that taxes a higher percentage of income of lower income people. Cigarettes and gas neatly fall into that category.

Wikiepedia gives an example of a regressive tax as "a tax with a cap, above which no taxes are paid." Since the mandate penalty/tax appears to be capped at the national average premium for a bronze level plan, doesn't it do exactly that?

So it will be a tax on the middle class?

Archduke Russell John wrote:

Ray Jay wrote:The definition of a regressive tax is one that taxes a higher percentage of income of lower income people. Cigarettes and gas neatly fall into that category.

Wikiepedia gives an example of a regressive tax as "a tax with a cap, above which no taxes are paid." Since the mandate penalty/tax appears to be capped at the national average premium for a bronze level plan, doesn't it do exactly that?

It depends; You have to run the numbers. The tax/penalty requires a complex calculation involving minimums, maximums, definitions of income, definitions of a bronze level plan (per you), phase-ins, susidies and freebies.

Ricky

Archduke Russell John wrote:

rickyp wrote:By the way, regarding tbis:

Therefore, an argument can be made that the Mandate without the fine is unconstitutional. That would mean if a bill to repeal the fine were to become law, the mandate is unenforcible

.
Wouldn't the law repealing the tax penalty be unconstitutional? You have a gordonian knot... Congress cannot enact laws that are unconstitutional, and if by passsing a law it makes a previously consittuional law unconstitutional..... Just asking.

Well, I do not seeit as a Gordian knot. I do not believe there is anything about repealing a tax that is unconstitutional. Repeal the fine, sell it as a tax cut and don't enforce the mandate. There is nothing unconstitutional about that...

I was very dissatisfied with this answer because I didn't feel it really explained enough. So I have spent the last few days trying to formulate a better answer when I came across this by Randy Barnett, one of the Attorneys arguing for the plaintiffs, pretty good explanation. The jist of what Prof. Barnett says is that Roberts pretty much changed the meaning of the law when he upheld it.

It focuses on this part of Robert's opinion

[A]ccording to the Government, . . . the mandate can be regarded as establishing acondition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.

The argument is that since the only way to save the law is to make the health insurance not a requirement but rather a condition to avoid the tax. Therefore, under this argument, if Congress passes a new law repealing the insurance tax, there is no harm no foul because there is no requirement to purchase insurance.

The article then go on to explain that Roberts did not overturn the precedence that a tax can not be used as a regulatory method of mandate something. Specifically, Roberts says the Court doesn't have to review that discussion in this case because the tax is so low. However, Roberts goes on to say that

We have nonetheless maintained that “‘there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment.’” Kurth Ranch, 511 U. S., at 779 (quoting Drexel Furniture, supra, at 38)

. This means if there is ever a law to increase the penalty, I can almost guarantee that it would end up back before the Court for review.

Hope all of this clears thinks up a little ricky.

bbauska wrote:So it will be a tax on the middle class?

Of course it is. How do you provide coverage for 30M people without taxing anyone? Answer: you can't.

So, what sort of taxes are we looking at? Taxes on tanning. Is that a tax on the rich or corporations? No, it's a tax on people who tan. My guess is that's more a middle class down tax. There are also taxes on medical equipment (that will drive up costs across the board). There are also reductions in medical savings accounts--pretax dollars used to cover medical expenses. That is a middle class tax increase.

Those are just off the top of my head.

Ray Jay wrote:It depends; You have to run the numbers. The tax/penalty requires a complex calculation involving minimums, maximums, definitions of income, definitions of a bronze level plan (per you), phase-ins, susidies and freebies.

Ray, could you elucidate on this a little more. I don't mean to be dense but it is my understanding that payroll taxes such as medicare and social security are considered regressive because they are a flat percentage and capped at a certain amount. If that is true and the percentage required to pay is flat, 2.5% after 2016, and the amount capped, why is the ACA insurance penatly not regressive on its face?

I was always under the impression that a 'progressive' tax would tend to tax people more the more they earn and a 'regressive tax' would tend to work the other way.

but Ray is right - you need to run the numbers before you can declare it one thing or the other (and while the word 'regressive' has negative connotations, that doesn't necessarily make a 'regressive tax' a bad thing). For example, sales taxes might on the face of it, in theory, be seen as 'progressive' because the more you earn the more you are likely to spend, and the more you spend the more you pay in sales tax. However, in reality, what often happens is that people on lower incomes are paying more of their disposable income in sales tax than those on higher incomes.

Part of the question is where the cap ends up, and how many people are actually paying that as opposed to buying health insurance (I would guess that the rich would be more likely to be insured, not less)

danivon wrote:Part of the question is where the cap ends up, and how many people are actually paying that as opposed to buying health insurance (I would guess that the rich would be more likely to be insured, not less)

This is all true, but . . . where does all the subsidy money come from? The government has no "money tree" and the President isn't writing a hundred new bestsellers with all proceeds going to the subsidies.

The money is going to come from taxpayers. Some say, "We're already pay this when they go to the ER."

Partly.

However, now the government will get a slice (16K+ new IRS agents and several new boards). Further, all these new people mean current insurance holders will be inconvenienced--at the very least. They will have to wait longer to see their doctors.

Rates will continue to skyrocket because the fine is not enough to induce most people to buy insurance before they need it. And, there are the new taxes that companies will pass on to insurance companies who will pass it on to those who have insurance.

All in all, it's a lose-lose.

danivon wrote:Ibut Ray is right - you need to run the numbers before you can declare it one thing or the other (and while the word 'regressive' has negative connotations, that doesn't necessarily make a 'regressive tax' a bad thing).

Ok, I think I understand this now.

danivon wrote: (I would guess that the rich would be more likely to be insured, not less)

Yes that was the whole point. They are more likely to be insured through their employer therefore paying less in total for their insurance then those buying on the exchange market which will most likely mean putting out more out of pocket money.

Doctor Fate wrote:

danivon wrote:Part of the question is where the cap ends up, and how many people are actually paying that as opposed to buying health insurance (I would guess that the rich would be more likely to be insured, not less)

This is all true, but . . . where does all the subsidy money come from? The government has no "money tree" and the President isn't writing a hundred new bestsellers with all proceeds going to the subsidies.

The money is going to come from taxpayers. Some say, "We're already pay this when they go to the ER."

Yeah, perhaps that's why SCOTUS ruled that the mandate was a tax.

I know that the ACA is not perfect, it's certainly not what I'd have recommended. But the previous situation was itself unsustainable. There are benefits that you ignore in your dire prognostications, however. Such as that ER will be less burdened by people who have put off visiting a doctor. That will save money in the system and will free up resources generally.

I suppose the question with primary care is how long do people currently have to wait to get an appointment and how much longer wouldit actually be with more people having access?

And would that not prompt demand for more doctors to move towards general practice?

Archduke Russell John wrote:

danivon wrote: (I would guess that the rich would be more likely to be insured, not less)

Yes that was the whole point. They are more likely to be insured through their employer therefore paying less in total for their insurance then those buying on the exchange market which will most likely mean putting out more out of pocket money.

Well, the rich tend not to be 'employed', don't they? Employees tend to be in the middle- and working class.

danivon wrote:I suppose the question with primary care is how long do people currently have to wait to get an appointment and how much longer wouldit actually be with more people having access?

And would that not prompt demand for more doctors to move towards general practice?

Good questions.

To the first, consider that, what, about 12% more patients will be put on insurance. That can't help but impact waiting.

As to the second, so a heart surgeon steps down into PCP? Or, do you mean more doctors decide to go that route from the beginning? The only downside I can see to that is they know they are signing up for less money (at least according to the bill, which again cuts Medicare reimbursement rates) and more red tape.

I guess we'll see.

danivon wrote:Well, the rich tend not to be 'employed', don't they? Employees tend to be in the middle- and working class.

In this country, we've been told that "rich" means making $250K per year. I don't think that is enough to warrant quitting work.