Sen. DeMint Op-Ed: Obamacare’s $4 Trillion Tax Will Hit Middle Class
Recent news has provided Americans a steady stream of new reasons to support a full repeal of President Obama’s controversial health care takeover.
Just in the last few months, we’ve seen the administration impose an unprecedented mandate that all employers, even religious schools and hospitals, pay for employees’ abortion-inducing drugs, sterilization and contraception.
We have seen the Congressional Budget Office further expose the true costs of ObamaCare, raising estimates of spending on insurance subsidies by $51 billion, and admitting that millions more Americans will lose their employer coverage to get dumped into ObamaCare’s brave new insurance world.
And of course, last month we heard the administration’s lawyers hem and haw at oral arguments before the Supreme Court, further undermining ObamaCare’s already dubious constitutionality.
But if those weren’t reason enough to support the full repeal of ObamaCare by Congress and a new president, Happy Tax Day! I’ve got four trillion more of them for you.
You probably already know that ObamaCare is full of what Democrats these days call “revenue enhancements” — job-killing tax increases on everything they can think of to pay for their health care takeover.
What you might not know is that the largest tax increases in the ObamaCare legislation are not indexed for inflation.
For example, the “high-earners” surtax hits individuals who make more than $200,000, and couples who earn more than $250,000. People making that much will comprise about 3% of the country in 2013.
But as time goes by, and inflation drives up income, today’s “high-earner” threshold will “medium” earners and, eventually, “almost everyone” earners.
According to the nonpartisan Medicare actuary, by 2080, ObamaCare’s tax on high earners will hit 79% of American taxpayers.
Meanwhile, the 40% tax on high cost health plans, the so-called “Cadillac health plans,” was linked to general inflation, instead of the much higher inflation rate in the health care sector.
So it won’t be long before the president’s “Cadillac” tax starts hitting Americans with “Honda” insurance. (A cynic might even wonder if this is why the tax won’t kick in until 2018, long after the end of Obama’s presumed second term.)
According to the CBO, all of the ObamaCare tax hikes will raise taxes by about 0.7% of gross domestic product by 2021. As more and more Americans sneak into the president’s definition of “high earner,” by 2035, it will be 1.2% of GDP, and rise from there.
Between now and 2035, that comes out to more than $4 trillion — that’s what happens when taxes, aimed at the rich, inevitably hit the middle class.
The pain from ObamaCare taxes is already being felt.
Medical device manufacturers, whose products ObamaCare slaps with a special tax, are already laying off workers. Even businesses in industries unconnected to the health care sector are holding back.
As an analyst at UBS put it, ObamaCare’s burdens are already “arguably the biggest impediment to hiring, particularly hiring of less skilled workers.”
Consider that $4 trillion in new taxes between now and 2035 comes out to $169 billion taken out of the private economy every year.
Since it costs businesses about $63,000 to create one middle class job, ObamaCare is already going to cost Americans 2.7 million lost jobs per year.
The total comes out to $3,300 in higher taxes for the average family, on top of the $2,400 increase in health insurance premiums (which the president promised would actually drop by $2,500).
How do you solve a problem like ObamaCare? Simple: you don’t. Its out-of-control costs will either destroy our health care system, or bankrupt our country — and, eventually, both.
This is a big part of why the public opposed ObamaCare in 2010, why they want the Supreme Court to overturn it and why they want Congress to repeal it.
For all the hidden taxes, for all the exploding spending projections, for all the untold dollars and freedoms that will be lost under government-run health care, for all the unknown unknowns, the American people actually seem to know exactly what ObamaCare will always cost them: more.
This post was originally published at Investors Business Daily.