The Obamacare tax is set to hit particularly hard this year, and federal and state officials are hoping the threat of a $1,000 tax bill will finally be enough to prod reluctant Americans to sign up for the president’s controversial health law.
California officials spotlighted the “individual mandate” in particularly blunt terms Wednesday, saying time is running out before Uncle Sam asks them to pay “their fair share” for the health overhaul.
The minimum penalty in 2016 will be $695, and the average penalty will be $969, the government estimates, as wealthier taxpayers who exceed the minimum must pay a 2.5 percent tax on their income above the filing threshold.
In 2015 the minimum tax was just $325, and the tax rate for wealthier families was only 2 percent.
“For 2016 that penalty is going up, and it’s going up a lot,” Covered California Executive Director Peter V. Lee said in a conference call devoted to the “costly gamble” that consumers take by remaining uninsured.