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Attention Arizonans, The Taxman is Coming: Arizona and the President’s Healthcare Law

Posted: July 11, 2012 at 10:15 am   /   by

While the chattering class in Washington continues to debate the tax/penalty-penalty/tax result of the Supreme Court ruling on President Obama’s health care law, Arizonans would do well to prepare to open their wallets. The taxman commeth.

The health care law contains about 20 new taxes, but the most controversial is the tax imposed on people who choose not to by health insurance. It is essential to the success of the entire law. Without the tax on the uninsured, the whole law falls to pieces. Stated simply, the government needs money from people who do not use healthcare services or buy health insurance to finance the entire scheme.

The tax on the uninsured will be phased in from 2014 to 2016, originally conceived to avoid contentious debate before the November election. But the Supreme Court decision exposed the tax. Now citizens will be forced to confront the tax that is regressive and strikes directly at those who already struggle under the oppression of high taxes. 

Veronique de Rugy of the National Review did everyone a service when she looked at the mandated tax and broke down the figures by income. Here are the facts.

  • The minimum tax per person will start at $95 in 2014 and increase to $695 per person in 2016 and up to three times that amount per family. After 2016, these amounts will increase based on the rate of inflation.
  • The minimum tax will apply only to people who make between $9,500 and $37,000 per year. Those making less than $9,500 are exempt. Those making more than $37,000 will pay a tax based on 2.5 percent of household income above the amount subject to federal taxes.
  • The amounts subject to federal taxes is $9,500 per person and $19,000 per couple. So the 2.5 per cent tax on income above these levels escalates quickly as incomes go up.
  • The initial tax for income of $50,000 is $1,000, for $75,000 it is $1,600, and for $100,000 it is $2,250. Then the tax goes up every year based on the inflation rate.


These formulas can make a taxpayer’s head spin. But the bottom line is simple. Those who chose not to use healthcare services through traditional insurance will pay a tax that escalates with income level. For the first time, private citizens who chose not to enter into a contractual agreement with private insurance firms will pay a tax.

Who are the uninsured who chose not to buy private health insurance? Some are people who pay for their own healthcare. Others are young people who rarely use the healthcare system. Still others are low-income individuals and families who fail to meet the tax exemption. All will pay beginning in 2016 and more with each passing year.

There are other destructive taxes in the president’s healthcare law. One will levy a 2.3 percent tax on medical devices such as pacemakers and stents. Another increases taxes on dividends and capital gains. The list goes on and on.

The president’s healthcare law has passed constitutional muster. Now comes the taxman to collect. The uninsured and the insured alike will pay more and receive less. So much for lower costs and greater access.

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Attention Arizonans, The Taxman is Coming: Arizona and the President’s Healthcare Law