What’s the proper way to tax personal saving and investment? It’s a great question, and under current tax law, we have lots of different answers! Specifically, we have four of them, which I’ll get to in a moment. But...
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- The Uninsured Lack Basic Knowledge About Obamacare
The Uninsured Lack Basic Knowledge About Obamacare
A troubling survey released yesterday indicates that most uninsured Americans lack even basic knowledge about Obamacare. The survey from Enroll America found that 68% of uninsured adults had not yet logged onto the exchanges. 69% of the uninsured were unaware of tax subsidies. And 81% of uninsured adults were unaware of the deadline to sign up for health insurance to avoid the individual mandate tax penalty. (If you are uninsured and are unaware of the deadline, it is March 31, 2014. Consider this if you wish to avoid paying the penalty.)
This data reveals one of the pitfalls of having a complex tax code. Obamacare’s system of penalties and subsidies is designed to shepherd the uninsured onto the exchanges through financial incentives, administered by the IRS. But if people are unaware of what the IRS is even doing, there is no way those financial incentives can actually achieve their intended effects.
If these taxpayers don’t learn more about Obamacare – and quickly – they will be in for a rude surprise when they find out they are subject to the individual mandate penalty – some 1% of your household income, or $95 per person, whichever is higher.
The tax code is very long and complex – enough that people have a hard time holding all the rules in their heads at once, especially new ones. Therefore, attempts to incentivize behavior through the IRS will frequently be much less effective than lawmakers hope.
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The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.