According to official estimates, once the Affordable Health Care Act takes effect, it will provide about $26 billion a year in tax credits to help middle-income families lacking health insurance to purchase it. At the same time, the act will impose about $7 billion a year in fees on middle-income families that choose not to purchase insurance.
Senate Minority Leader Mitch McConnell (R-KY) said this $19 billion-a-year net middle-class tax cut is "a middle class tax cut — tax increase."
Well, that's sort of correct. But when you combine the two tax provisions, they clearly add up to a middle-class tax cut.
Here's another way of looking at the fees and the tax credits. The health law will make about 28.6 million people eligible for the tax credits. The number of people who will not be eligible for these credits or the newly expanded Medicaid and who will be subject to the mandate is 7.3 million, which is just two percent of the population (three percent of the non-senior population). Even fewer — just 1.2 percent of Americans — would actually choose to pay the fee rather than obtain health insurance, according to the Congressional Budget Office.
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