Call it a penalty, call it a tax. Call it a “penalty tax” as the Congressional Budget Office (CBO) has.
Call it what you will, we’ll just call it ‘devastating’.
Beltway Confidential reports:
President Obama’s health care law raises taxes by $1 trillion, according to a new report from the Congressional Budget Office.
The individual mandate — which the CBO calls a “penalty tax,” in apparent deference to Chief Justice John Roberts — will produce $55 billion in “penalty payments by uninsured individuals,” the CBO told House Speaker John Boehner, R-Ohio, in a Tuesday letter. Of course, the framers of the law didn’t design the mandate as a tax, and so it produces less revenue than any other provision in the bill.
The “additional hospital insurance tax” is the largest tax increase in Obamacare, projected to bring in $318 billion in new revenues. According to the 2010 report from the Journal of Accountancy, this tax hits “high-income tax payers” — individuals making over $125,000 a year or households making over $250,000 a year.
It may hit so-called high-income tax payers, but it will most certainly have an effect on lower-income families as well.
This from the Tax Policy Blog:
Though Obama vowed not to raise taxes on low-to-middle income Americans, various provisions will most certainly fall on lower income groups. For example, new annual taxes on health insurance providers, drug manufacturers, and the medical device industry will be passed on to all consumers in the form of higher prices and premiums. More direct are new taxes on high-cost “Cadillac” health plans, the tax on tanning services that is already in effect, and the individual mandate tax/penalty.
Regarding the tax/penalty for not purchasing health insurance, my analysis indicates that many low and middle-income households will experience tax increases of substantial magnitude. For example, starting in 2016, an uninsured family of four with income of $50,000 will owe $2,085—or 4.17 percent of income. As shown in the table above, the individual mandate represents a $55 billion tax increase over 10 years, and this is before it is fully phased in.
With high- and low-income earners alike having to worry about massive tax increases, the Obamatax should do wonders for the economy, particularly in the areas of spending and consumer confidence.
Here is a video reminder of Obama saying, “You don’t raise taxes in a recession”.
Alternate headline: Congressional Budget Office Gets All Racist on President Obama.
‘Cause, you know, it’s racist to call him the Food Stamp President…
Via the Wall Street Journal:
The Congressional Budget Office said Thursday that 45 million people in 2011 received Supplemental Nutrition Assistance Program benefits, a 70% increase from 2007. It said the number of people receiving the benefits, commonly known as food stamps, would continue growing until 2014.Spending for the program, not including administrative costs, rose to $72 billion in 2011, up from $30 billion four years earlier. The CBO projected that one in seven U.S. residents received food stamps last year.In a report, the CBO said roughly two-thirds of jump in spending was tied to an increase in the number of people participating in the program, which provides access to food for the poor, elderly, and disabled. It said another 20% “of the growth in spending can be attributed to temporarily higher benefit amounts enacted in the” 2009 stimulus law.
Now that we’ve gone the Pelosi route and passed the bill to see what’s in it, the CBO is running the numbers and it ain’t pretty:
Earlier this week we learned that the healthcare bill will cost twice the original estimate. And now, this…
Via The Hill:
As many as 20 million Americans could lose their employer-provided coverage because of President Obama’s healthcare reform law, the nonpartisan Congressional Budget Office said in a new report Thursday.
The figure represents the worst-case scenario, CBO says, and the law could just as well increase the number of people with employer-based coverage by 3 million in 2019.
The best estimate, subject to a “tremendous amount of uncertainty,” is that about 3 million to 5 million fewer people will obtain coverage through their employer each year from 2019 through 2022.
In a column for the Times Union in 2010, I wrote the following about the Obama healthcare bill that then-Congressman Scott Murphy was pitching as ‘fiscally conservative’.
Associating conservatism with a law that will hijack roughly a sixth of the U.S. economy can only be explained by political naivete and a reliance on the Congressional Budget Office’s mathematical wizardry to surmise that the legislation will reduce the deficit by $138 billion.
There were two reasons that the CBO numbers were absurdly misleading:
First, the CBO is required to take the written word in the bill before it at face value. For example, the law includes a $463 billion cut in Medicare, an impossible feat for a program already hemorrhaging red ink. Because this amount is in the law, it is assumed to be true for the sake of the CBO report. This is the equivalent of setting up a personal budget and including a winning lottery ticket in the bottom line. Yes, it puts that Florida vacation within reach, but no, it’s not going to happen. The CBO report emphasizes that its findings were preliminary and did not reflect the actual bill that would pass.
Second, former CBO director Douglas Holtz-Eakin, in a March 20 New York Times commentary, offered a peek at the shell game being played by his former agency and the Obama administration:
“In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.”
And now, the curtain is being pulled back on those CBO calculations from two years ago, and there really is no great wizard being revealed. In fact, the opposing disappointment is epic, as the cost of Obamacare is now being estimated at nearly twice the original amount.
Via Beltway Confidential:
President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.
Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.
Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion. That’s because we now have estimates for Obamacare’s first nine years of full implementation, rather than the mere six when it was signed into law. Only next year will we get a true ten-year cost estimate, if the law isn’t overturned by the Supreme Court or repealed by then. Given that in 2022, the last year available, the gross cost of the coverage expansions are $265 billion, we’re likely looking at about $2 trillion over the first decade, or more than double what Obama advertised.
But hey, we can afford that kind of miscalculation right? Surely it would have passed if voters knew the real cost, right?
Obamacare and Obamanomics – just a shell game, and we’re the losers.