The Tax Cuts and Jobs Act is a powerfully pro-growth bill that will bring much-needed tax relief to middle class Americans. The bill is jam-packed with provisions that will boost wages and turbocharge the economy. Almost all Americans will see a tax cut from this bill, with annual savings of approximately $1,200 a year.
The bill reduces the corporate tax rate to 20%, which studies show would boost wages by at least $4,000 in the long run. The bill also offers relief from the death tax, which is a boon to family businesses all across the country. The bill doubles the standard deduction from $6,000 to $12,000, allowing Americans to earn more tax-free income. One of the best achievements of the tax reform bill is that it repeals Obamacare’s individual mandate, one of the most regressive and harmful taxes in American history.
Under current law, individuals are legally required to purchase health insurance, whether through an employer or through Obamacare’s failing insurance marketplaces. If an individual cannot afford to buy health insurance because of Obamacare’s artificially high costs, he will have to pay the individual mandate tax.
In order to avoid paying the tax, an individual must submit proof of insurance when he files his federal tax returns. The penalty for not having health insurance in 2017 is $695 per adult or 2.5% of household income, whichever is higher. The penalty for a family of four is $2,085. Without this enormous burden, families could use that extra $2k a year to buy gas, groceries, or other necessities. This repeal would mean a lot to them.
IRS data from 2015 reveals some shocking statistics about who actually shoulders the burden of the individual mandate tax. In tax year 2015, 6,665,480 households paid a total of $3,079,255,000 in individual mandate tax penalties. 79% of those households have a yearly income of less than $50,000. 37% of those households have a yearly income of less than $25,000.
The fact that nearly 40% of the burden of the individual mandate tax falls on those making less than $25,000 obliterates the argument that Obamacare allows all Americans to access affordable health care.
Contrary to popular belief, repealing the individual mandate would not cause 23 million Americans to lose health insurance. This is a deliberate misrepresentation of the facts by Democrats and the mainstream media. Repealing the individual mandate would allow those 23 million individuals to choose whether or not they want to buy health insurance.
The bill also does not repeal the Obamacare premium tax credit. All it does is repeal the individual mandate, which is a tax on individuals, not health insurance plans. The individual mandate simply allows the government to keep a failing health care law on life support by stealing money from low-income Americans.
The Senate should be commended for including the individual mandate repeal in its version of the Tax Cuts and Jobs Act. This is one of many tax cuts for middle and low income individuals in the Republican tax plan. As conferees from both chambers of Congress get together to iron out the differences between the House and Senate bills, they should include the individual mandate repeal in the final text. Repealing the individual mandate would be the best Christmas gift the middle class could ever ask for.