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

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  •  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

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    •  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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