Is the crazily constructed, oppressively focused, unaffordable Affordable Care Act also the biggest tax in history?
Technically speaking, no. It is a big tax hike that is already taking a toll on our economic future, but not the biggest. It is still a gouge that most of us will feel one way or the other.
The discussion got going after the Supreme Court ruled that the individual mandate could be constitutionally justified by calling it a tax.
That surprised everyone in the country with common sense, seeing as how President Barack Obama himself was among those bending over backward to assert that a penalty for not buying insurance was not a tax.
The penalty was not called a tax in the legislation, either, and some political observers are arguing that if it had been — if it had been perfectly clear that here was still one more major grab at the wallets of the innocent — the legislation might not even have passed.
But there were a bunch of other taxes buried in it, and the individual mandate has costs beyond the penalty. After all, the mandate is to buy insurance millions would otherwise decide not to buy.
The liberal Urban Institute puts the precise number of those who will have to pay something at 18.2 million. It says 10.9 million of those will get government assistance in footing their insurance bills, while 7.3 million will be on their own.
Various analyses predict 4 million people instead will opt for the penalty, forking over something like $27 billion over the next decade. That leaves 14.2 million forced to pay insurance premiums known to exceed the cost of T-shirts at Walmart, the last time I looked.
Meanwhile, there are other big taxes in Obamacare, not the least including a Medicare hike that starts next year. Rejoice! It probably won’t hit you. Congress is smart enough to aim taxes at relatively small groups with relatively few votes, and it therefore says this hike of 0.9 percent in payroll taxes will apply to only those with incomes of $200,000 and more, or $250,000 for married couples.
If these folks happen to be making money on investments — which is what retired people often hope to do — they will pay an extra 3.8 percent on that income.
The Tampa Bay Times, which says in its June 29 PolitFact.com column that the income from this Medicare tax will be $210.2 billion over the next 10 years, lists still other Obamacare taxes. One applies to expensive insurance plans affording extensive coverage. Starting in 2018, they’ll get hit with a whopping 40 percent excise tax. A new fee on pharmaceutical manufacturers and importers began last year (meaning prescription drugs will cost more). A couple of years down the road, health insurers will have to pay more (meaning still higher premiums, friends).
Here’s a tax that some say is having deleterious effects already, even though it does not kick in until next year: a 2.3 percent tax on medical devices. Washington Post columnist George Will has argued that it “will mean not only fewer jobs but also fewer pain-reducing and life-extending inventions.”
As evidence, in a May 9 column, he noted that Cook Medical has abandoned plans for a new U.S. factory and that layoffs already are taking place in other companies.
Will wrote that even Elizabeth Warren, a liberal Democratic candidate for the Senate in Massachusetts, has said this tax should go because of its nasty impact on small businesses in that state.
The American people should care about all of this because taxes have consequences, often unintended consequences of a destructive nature. Even if Obamacare does not set a new record, it is one of the 10 largest federal tax hikes since 1951, according to Washington Post columnist Ezra Klein.
There are still other costs that will get you if you don’t watch out.
Or even if you do.