Tags: Obamacare | tax | refund | subsidy

Obamacare Might Actually Sink the Economy This Time

By    |   Wednesday, 25 March 2015 08:32 AM

Tax refunds are an important part of many family budgets. Millions of American households plan on receiving checks from the IRS every spring that they use for catching up on bills or once-a-year splurges. This year, Obamacare is leading to surprises at tax time.

Some households will be forced to a penalty for not having insurance. Although the amount is relatively small, starting at $95 per adult and going up to 1 percent of household income, the impact on lower-income households will be large.

Unexpected payback of subsidies could be more of a problem. A study done by the Kaiser Family Foundation estimates more than half of the households that received health insurance subsidies last year will have to pay back an average of $794. For many, this amount will come out of their tax refunds.

Tax refunds are often viewed as a form of forced savings. The savings can be rapidly spent as soon as they are received and this year, the economy might be missing out on more than $3.5 billion worth of spending.

In a healthy economy, a $3.5 billion shortfall might not mean much, but we are not in a healthy economy.

Obamacare might break the economy in 2015 as consumers suffer from smaller tax refunds and households are forced to shift scarce family resources to health insurance. This could be one of the greatest risks the economy faces this year, with a potential impact greater than the Federal Reserve's well-telegraphed rate hike. If economic data shows a slowdown in consumer spending in the next few months, stock market investors might want to consider shifting to more conservative stocks.

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MichaelCarr
Tax refunds are an important part of many family budgets. Millions of American households plan on receiving checks from the IRS every spring that they use for catching up on bills or once-a-year splurges. This year, Obamacare is leading to surprises at tax time.
Obamacare, tax, refund, subsidy
273
2015-32-25
Wednesday, 25 March 2015 08:32 AM
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