The Obamacare Fiscal Cliff
Obama claims that his tax plan would only increase the tax burden on those earning more than $200,000. What the Democrats, the media, and even Republicans fail to mention is that there is another aspect of the fiscal cliff that will hit everyone. A number of Obamacare’s tax increases are scheduled to take effect in January. These tax increases will be severely regressive to those at the middle and bottom of the income ladder, as they will engender a record spike in the cost of health insurance premiums.
The new taxes in 2013 include a cap on the Medical Itemized Deduction, a cap on private flexible savings accounts, a 2.3% excise tax on medical devices, a 3.8% surtax on investment income for those earning more than 200k, and a .9% increase in the Medicare payroll tax for the rich.
Well, what if you are not one of those evil rich seniors?
First, the excise tax on medical devices will affect everyone. The tax will be applied to anything from wheelchairs and dental bridges to hearing aids and walkers. It will also cripple medical innovation.
But wait until 2014 when Obamacare will begin levying a tax on insurance companies.
Now, liberals might think that it’s a good thing to sock it to those nefarious insurance companies. But according to a new analysis by the Oliver Wyman for America’s Health Insurance Plans (AHIP), everyone will suffer from an inexorable rise in insurance premiums.
In 2014, a new sales tax will be levied on all premiums collected by insurance companies that have more than $50 million in profits. Obviously, that will have a direct effect on the cost of the premiums. The new tax will raise families’ insurance costs by as much as $7,000 over a decade. And as is the case with the other tax increases, the blue states will be hardest hit. New Yorkers will see the cost of their family plans rise by almost $10,000 over the next 10 years. If you are a senior who is currently enrolled in Medicare Advantage, the one quasi free-market Medicare program, your premiums will increase by $3590. Throw in all the regulations and mandates that have yet to take effect, and we are looking at the death of the private market, with single-payer as the only option.
Instead of banal Republican politicians parading their ugly faces in front of TV to capitulate on taxes, why don’t they mention the Obamacare taxes? How many Americans are even aware of the silent fiscal cliff, which will affect everyone?
Republicans can’t surrender and condemn their policies as political losers as long as they fail to articulate their strongest arguments.
Cross-posted from The Madison Project