Opinion: Editorials

Examiner Editorial: Obamacare is loaded with big tax increases

|
Photo - Protesters outside the Supreme Court the day of the court's health care ruling. (Graeme Jennings/Examiner photo)
Protesters outside the Supreme Court the day of the court's health care ruling. (Graeme Jennings/Examiner photo)
Opinion,Editorial

Last week's ruling by the U.S. Supreme Court that the individual mandate in President Obama's national health care law was a valid exercise of Congress's taxing power has triggered a renewed political debate in Washington over whether the provision is really a tax. If so, it violates Obama's pledge not to raise taxes on the middle class. If not, then its constitutional justification is fictional.

But such semantic and legal arguments over this relatively small "tax" should not distract from the fact that Obamacare as a whole contains $813 billion in tax increases.

Democrats, citing the Congressional Budget Office, have touted Obamacare as a deficit-reduction measure. Given that the law will spend $1.76 trillion on its core provisions to expand Medicaid and provide subsides to individuals to purchase insurance on government-run exchanges, the only way the math works is to cut projected Medicare spending and raise taxes.

If implemented in 2014, the penalty on individuals who don't purchase health insurance will boost government revenue by $27 billion through 2021, according to an analysis done last year by the CBO. The requirement that certain employers provide acceptable insurance or pay a penalty would raise an additional $82 billion.

Additional destructive tax increases include a $259 billion Medicare payroll tax hike and $148 billion in taxes on medical device makers, drug companies and insurers. Such taxes will not only be inevitably passed on to consumers of all income levels, but will stifle innovation by vacuuming up money that could have otherwise been spent on research and development. The law also includes a 3.8 percent surtax on investment income for households earning more than $250,000, as well as a number of smaller tax increases, such as the 10 percent tax on indoor tanning.

In all, the CBO has identified $813 billion in taxes over the next decade (2012 through 2021). And even this number understates the true cost of the law to taxpayers, because many of the revenue-raising measures don't go into effect for several years. In the most obvious example, Obamacare is set to impose a tax on benefit-rich insurance policies. At first glance, the CBO report shows this so-called "Cadillac tax" will raise $111 billion over 10 years. But a closer look shows that it isn't scheduled to kick in until 2018, so that $111 billion number is only for the first four years of its implementation.

Instead of narrowly focusing on the issue of whether or not the mandate should count as a tax, opponents of Obamacare should use this opportunity to make a broader point about the many expensive and punishing taxes that the law piles on businesses and the American people.

View article comments Leave a comment