On Wednesday, the Congressional Budget Office confirmed what we've been saying for years now: President Obama has broken his pledge not to raise taxes on the middle class. During his 2008 campaign, Obama promised Americans that he wouldn't raise taxes on anybody making less than $250,000 a year. Technically, he broke that pledge weeks after taking office, when he signed an increase in cigarette taxes, which fall disproportionately on those with lower incomes. Now, the CBO has released updated estimates showing that Obamacare's insurance mandate -- which the Supreme Court ruled to be a tax -- will hit millions of middle-class Americans.
In its report, the CBO determined the mandate tax would cost 6 million Americans a total of $7 billion in 2016, with a minimum payment of $695 apiece. The annual cost will then average about $8 billion from 2017 through 2022. The health care law requires Americans either to purchase government-approved insurance or to pay a penalty. The CBO estimates 30 million will be uninsured by that year, but most will be exempted from the mandate because they are unauthorized immigrants, members of Indian tribes or don't earn enough income to file taxes, among other reasons.
Among those who will have to pay a mandate penalty, 4.7 million will have incomes below 500 percent of the federal poverty level, according to the CBO, which is projected to be $60,000 for individuals and $123,000 for families of four by 2016.
The tax penalty, according to the CBO, is "the greater of: a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments); or a percentage of the household's income that rises to 2.5 percent for 2016 and subsequent years (also subject to a cap)."
Lest some of his defenders argue that Obama's campaign pledge merely pertained to income tax rates, here's what he actually said as a candidate in Dover, N.H., on Sept. 12, 2008: "I can make a firm pledge: Under my plan, no family making less than $250,000 a year will see any form of tax increase -- not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
As with many of Obama's "firm pledges," this one was a bit flimsy.