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View Diary: In 400 Days the Health Insurance Cliff will Kick In. For Real. (97 comments)

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  •  Reality appears a tad less dramatic (5+ / 0-)

    If you actually meant this money was a tax credit -- I am not near any of these numbers, and have no idea -- in order to the individual making $14856 to receive a $3700 tax credit that was actually worth $3700, she would have had to have owed $3700 in Federal income taxes.  Tax credits may cancel taxes, but only if you were going to pay the money.  Did you actually mean "tax credit"?  Or is it a true subsidy?

    We can have change for the better.

    by phillies on Sun Nov 25, 2012 at 10:15:11 AM PST

    •  The tax credits are refundable (3+ / 0-)
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      DRo, TexasTom, phillies

      Still though, I don't see how these income step limits are any different from step limits on many types of government programs and tax policies.  

    •  The credit is independent of actually owing (1+ / 0-)
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      taxes.  It can act, in effect, as a negative income tax.  And it will be payable in advance, so you don't need the money up from on Jan 1 to pay for your insurance and then get it back a year later.

      •  Let me try again (1+ / 0-)
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        The following numbers are unlikely, but chosen so that everyone can follow the arithmetic.

        I earn $10,000 a year.  I have somehow managed to have no deductions at all.  I get all my money from capital gains so I am in the 10% bracket.

        I therefore owe $1000 in income tax.

        It is impossible for a tax credit to do more than reduce the taxes I owe by $1000, because that is how much tax I owe.  Therefore, this Federal coverage is for me not worth $3700, but only $1000.

        Now, if this is in fact a subsidy, it might be like the EITC, in which case I get the $3700 refund even though I am not paying $3700 in taxes.

        Readers will note -- the words of Romney, because the man actually got one thing right by some accident -- that something close to half of all Americans owe no income tax.  A support in the form of a true tax credit does absolutely nothing for them, because there is no tax to offset.  However, I am still not clear if this subsidy is a tax credit or something else.

        We can have change for the better.

        by phillies on Sun Nov 25, 2012 at 12:04:25 PM PST

        [ Parent ]

        •  No. (1+ / 0-)
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          Some tax credits (known as "refundable") are allowed to exceed the amount of tax you owe. If you get one of these credits, the amount of tax you paid just doesn't matter.

          Example: the adoption tax credit was made refundable last year. We adopted twins and got an enormous tax credit, way more than the taxes we paid. (Of course, it didn't cover all the adoption costs, but still.)

          "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

          by nosleep4u on Sun Nov 25, 2012 at 12:19:11 PM PST

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          •  yum, refundable tax credits..mmmmmm good (0+ / 0-)

            or run your car with it?

            c'mon, simple language, is it a subsidy you can pay your insurance premium with or not?
            If it is a tax credit how can you create any useable value with little income tax to pay, geez.
            Now if tax credits become transferable/sellable/tradable great, otherwise, so what, they do nothing. The bibble babble around this simple concept in ten comments or less is amazing.

            'Tax credit' seems to be shorthand for middle class support: 'vote fer me', and backhand for poorer people 'the congressman is not in at the moment'.

            I am not seeing much help here for self employed, low income people, so not much will change, we pay little in direct income tax..(that is, income taxes where our names are attached..but everything else we pay is supporting everyone else's income tax)
            and will still have to pay premiums for private health care insurance with no real help from the gubbmint.

            Unless this is a direct subsidy it sounds like bullshit.

            Shocked I am.

            I have a tax credit futures market starting up, get in on the ground floor..cause that's where you will be sleeping...

            This machine kills Fascists.

            by KenBee on Sun Nov 25, 2012 at 04:11:09 PM PST

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            •  Let Me Try a Third Time (0+ / 0-)

              Is the tax credit for health coverage a conventional tax credit, limited to the amount of tax I pay, or is it a refundable tax credit, as described by nosleep4u?

              If it is the former, it is somewhat less than valuable for Mittt Romney's "47%".  If it the latter, then the amounts given in the original table are reflective of actual consequences.

              In either case, someone should wind up the Republican tax cutter dolls, because this is an actual tax cut. (8^))  And they all want to repeal this tax cut.,,,Where is Grover Norquist when we need him? (8^))

              We can have change for the better.

              by phillies on Mon Nov 26, 2012 at 06:31:43 AM PST

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      •  werds jp, use yer werds! (1+ / 0-)
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        why introduce yet another phrase 'negative tax credit'..or is that what I give the Taco truck, that green paper stuff?

         Is this a direct cash subsidy or not?

        If not, how does this help to directly support below FPL people with little taxes to credit?

        And if not a tax credit why was it even introduced here, except to confuse?..grrrrr!

        Anyway, thanks for trying to unwrap this...we may need a couple more diaries to do it..:>

        This machine kills Fascists.

        by KenBee on Sun Nov 25, 2012 at 04:21:38 PM PST

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        •  It's called a tax credit. (1+ / 0-)
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          I didn't make the terminology up.  Specifically it's a refundable tax credit, which is defined to be one which you can get even if you have to taxes which are being offset. If you don't like the terminology complain to the IRS and the authors of the PPACA.

          The point of the diary wasn't to explain in intricate detail exactly how every aspect of this tax credit would work (because, for one thing, regs are still being written about that), simply to point out the very real financial cliff that some people will fall over because of how the credit is structured.

          •  ... even if you have NO taxes ... (1+ / 0-)
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            •  heh, not yelling at you brother, this verbiage (0+ / 0-)

              gets thrown out of the rabbit hole and then we have to pick thru it like sparrows and ressemble it.

              Nothing is more distracting to a conversation than an insider acronym or 7th level bullshit and my saying 'wait, what??!?!'

              Naturally, withholding for federal income taxes and estimated taxes are also refundable credits, as these are prepayments towards a person's tax liability. Refundable tax credits, like payments, are applied towards a person's tax obligations, and any over-payments are refunded back to the taxpayer.
              from a google lets see..that would be a check, a refund, money in both pockets in real words non tax experts can understand...but then you said they will somehow estimate this and give it to you before the year in anticipation instead of after the year's results are in.

              That is super good then, yowza let the gifting begin!
              They'll be sending my pony I expect!

              So maybe the banks will love this too as maybe we will have to put the money in a dedicated account where only premium payments can be made or something similar? Like a medical savings account only narrower cast..and banks can charge $15 a month and smile. If one had a medical savings account the monies spent were subject to restrictions I never had a problem with, but were limited to reasonable definitions of medical needs. The IRS was the regulator eventually. You could put in only so much and take out with some penalty...but you knew that :>

              Thanks for this JP.

              This machine kills Fascists.

              by KenBee on Mon Nov 26, 2012 at 01:20:27 AM PST

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