Why The Individual Mandate Is Not A ‘Massive Tax Hike’ On The Middle Class

The Supreme Court ruled today that the Affordable Care Act, the comprehensive health care reform package signed by President Obama in 2010, is constitutional. The Court upheld the law’s most controversial provision, the individual mandate, ruling that it is constitutional under the government’s authority to levy and collect taxes.

Republicans have falsely claimed the mandate was the “biggest tax increase ever in American history,” so of course, conservatives immediately jumped on the idea that the individual mandate was a massive tax hike on the middle class, reviving an argument Republicans have made since the law passed more than two years ago:

WISCONSIN GOV. SCOTT WALKER (R) declared that it was a “massive tax increase.”

INDIANA SEN. DAN COATS (R) said “Right now we have something with a big tax and the American people who rejected that in 2010 are going to have a chance to break the tie in 2012.”

LOUISIANA GOV. BOBBY JINDAL (R) said “Ironically, the Supreme Court has decided to be far more honest about Obamacare than Obama was. They rightly have called it a tax. Today’s decision is a blow to our freedoms.”

IDAHO SEN. MIKE CRAPO (R) touted that the mandate was ruled a tax. “Now, we’re back into that argument,” he said.

Watch Coates:

The mandate can indeed be characterized as a tax, as the Court found. But it is not a massive tax hike on the middle class, much less the biggest tax hike in American history. The tax imposed by the individual mandate amounts to either $695 or 2.5 percent of household income for those who don’t have insurance and are not exempt based on income levels. By comparison, the payroll tax cut extension Republicans repeatedly blocked earlier this year would have added 3.1 percentage points to the tax and cost the average family $1,500 a year.


The mandate, meanwhile, would hit a small amount of Americans — somewhere between 2 and 5 percent — according to a study from the Urban Institute. The number could be even lower depending on the law’s success: in Massachusetts, the only state with an insurance mandate, less than 1 percent of the state’s residents paid the penalty in 2009.

The majority of the Affordable Care Act’s other taxes, such as a payroll tax increase and a tax on high-cost health plans, are aimed at upper-income Americans. In exchange, millions of jobs will be created as new people enter the health care system and millions of people will gain access to affordable, quality insurance that they otherwise would not have. And, as we detailed earlier today, the Court’s decision to uphold the entirety of the law will have significant benefits for the nation’s economy.

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Sen. Marco Rubio (R-FL) characterized the mandate as a “middle class tax increase,” claiming that millions of Americans are going to have “an IRS problem.” Watch it: