The Purpose of This Bl;og

By and large, liberals are very decent, kind, and compassionate people who genuinely want what is best. This should be kept in mind as we explore the Law of Unintended Negative Consequences near invariably resulting from Leftist big-hearted solutions to societal problems.

Tuesday, November 12, 2013

Obamacare - Won't Raise Taxes?

Obama has said: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” (See HERE)

Did Obama keep this firm pledge?

While taxes were certainly raised on the rich under Obamacare (see HERE and HERE and HERE), in regards to the poor and middle class, the answer to the question is clearly "No" in several respects--direct taxes, indirect taxes, and deferred taxes. I will explain each below.

Direct taxation:

One of the fundamental, and perhaps most controversial elements of Obamacare is the individual mandates, which requires all individuals in the U.S. be insured by 2014. (See HERE and HERE and HERE)

In order for the individual mandates to work, or in other words in order to make certain that people would comply with the individual mandates, a financial incentive or fee was proposed by the White House. (See HERE and HERE and HERE and HERE)

And, even though the fee was cleverly dubbed an "individual responsibility payment" (see HERE), it was to be collected by the IRS (see HERE and HERE), and thus had every appearance of a tax, and would most likely apply to those making less than $250K a year. As such, the President came under criticism for breaking his promise.

In response, the President claimed the incentives were "absolutely not a tax." (See HERE and HERE and HERE and HERE)

However, in order for the individual mandates to pass constitutional muster, the President's own Justice Department argued before the Supreme Court that the incentives were a tax (see HERE and HERE and HERE and HERE and HERE and HERE), and the Court deemed the individual mandates as constitutional on that basis. (See HERE and HERE and HERE and HERE and HERE)

So, contrary to Obama's firm pledge and speaking out of both sides of his mouth, the tax penalties for non-compliance under the individual mandates is a direct tax on those making under $250K a year. (See HERE and HERE)

Also, under Obamacare, in 2018 a 40% excise tax will kick in on insurance plans with premiums that are more than $10,200 for individuals and $27,500 for families. (See HERE and HERE) This tax is often called the "Cadillac tax." (See HERE)

The Huffington Post reported: "But because the tax is focused on high premiums, not high levels of coverage, companies that tend to pay higher premiums -- like small businesses and employers with a high proportion of sick workers -- could wind up paying the tax even though their benefits aren’t particularly generous, the EPI study found. In addition, if employers try to avoid the tax by shifting to less generous plans, workers will likely suffer when it comes to their overall compensation, even if they get a boost in wages to make up for the lost health benefits, according to EPI. What’s more, those workers who need medical care would end up with higher out-of-pocket costs." (See HERE) (See also HERE and HERE and HERE)

Obamacare also raises taxes on items used by average citizens, like tanning beds  (see HERE and HERE) and "everything from tampons to tanning salons, from gold to the sale of your home." (See HERE and HERE)

Several research and media outlets have compiled lists of all the new taxes directly imposed by Obamacare on people making less than $250K a year. (See HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE)

Indirect taxation

While many of the Obamacare tax increases are intended to directly affect the rich as well as corporations and small businesses and unions (see HERE and HERE and HERE and HERE and HERE), the costs are often passed on to the consumer and the general economy, thereby indirectly impacting people, particularly seniors, making less than $250K a year, contrary to the firm promise. (See HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE and HERE)

Deferred taxation

In my next article I will tackle the question of whether Obamacare wont raise the deficit as promised, and thus the national debt. (See HERE)

Given that we, as a nation, can't even afford to pay for Medicaid and Medicare (both are going bankrupt--see HERE and HERE and HERE and HERE and HERE), and given the expansion of Medicaid under Obamacare (see HERE and HERE and HERE and HERE), among other things, it isn't hard to guess what I will likely discover.

And, if as suspected deficits and the national debt continue to spiral upwards, in part due to Obamacare, not to mention the negative effect on the economy, it will have to be paid for by somebody, and that will likely be our children, most of whom won't be among the wealthy class. This constitutes a deferred taxation on people making less than $250K a year, contrary to what was promised. (See HERE)

So, the Leftist LUNC here is that the non-wealthy citizens of the U.S. were promised no new taxes, but in three respects that is exactly what they got.

For an explanation as to why these Leftist LUNCs occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

Additional Documentation

Individual, corporate, medical device, Medicare readmission, Cadillac, union, and other tax/penalties:

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