This is why McCain lost, because the plan wasn’t properly explained. The $9600 would have counted as income and added to your net income, you would get all of your legal deductions. Not all of the $9600 would have been taxed, let’s say about 28-40% max. Let’s say you figured you owed the Govt $1200. You then would have gotten a tax credit of $5000 meaning you would have gotten a check from the IRS of $3800.
The CATO institute said this plan would work for %95 of the people who paid for healthcare.