What Halbig Really Means: A $5K Tax Hike, Courtesy of the GOP

July 26, 2014

This past week, in a case called Halbig v. Burwell, Republican-appointed judges ruled in favor of a Republican lawsuit that families in states using the federal healthcare exchange should be denied federal tax credits. Hours later, the Fourth Circuit Court of Appeals ruled just the opposite. The attention on the minutiae of court rulings has distracted from the most significant political implication of all this: Republicans are fighting to raise taxes on millions of American families by an average of nearly $5,500 a year. Here’s how we win on this:


The GOP is fighting to raise taxes on millions of families by over $5k a year just to spite Obamacare.
It can be hard to make sense of all the policy arguments surrounding the health care law.

This one is simple: the Republicans’ Halbig lawsuit would result in massive tax hike—averaging almost $5,500 each—for nearly 5 million working American families.

That’s nearly a month and a half of take home pay for the average American family.

Many of these same Republicans fought to ensure their states didn’t create healthcare exchanges. Now they are fighting to revoke the tax break their constituents need to make health insurance affordable.

First Republicans forced families onto the federal exchange, now they want to force them to pay more taxes because they are on the federal exchange.

Republicans aren’t even pretending to govern or lead anymore. Halbig shows that they won’t think twice about hurting the families they represent to score political points or appease their base.

KEY:  Connect with your audience |  Make your case |  Show how your opponents differ


ATTACK: “Even one of the primary architects of Obamacare admitted back in 2012 and 2013 that subsidies wouldn’t be available for residents of states that didn’t set up exchanges.” 


  • When this law passed, not a single lawmaker – Democrat or Republican – argued that people on the federal exchanges would pay higher taxes.
  • The expert Republicans are citing, Jonathan Gruber, has been crystal clear that the interpretation Republicans are pushing in the Halbig lawsuit is wrong.
  • The past statements from Gruber that Republicans are pretending are damning were made when no one was sure the federal exchange would be ready. The only way for states to be sure that their people could get the tax credits was to build their own exchanges.


  • 36 states used the federal exchange in 2014. 14 others and the District of Columbia built their own. In 2015, two states that used the federal exchange in 2014 – Idaho and New Mexico – are planning to build their own going forward. One state – Oregon – tried building its own exchange in 2014, but will be using the federal exchange in 2015.
  • That means Halbig could affect the subsidies for Americans in 35 states in 2015 and beyond. About 4.5 million Americans in those 35 states are in jeopardy of losing the subsidies that enabled them to buy health insurance – many for the first time.
  • The CBO estimates that the average subsidy for health coverage was $4,700 in 2014. In 2015, that average is set to increase to $5,330.
  • In 2012, a typical American Family made $62,241. After taxes, that family’s monthly take-home pay would be about $4,000. That means their taxes could go up by about an amount equal to a month and a half of take-home salary.
Category: Health Care