• Ezra Klein makes the “not biggest tax in history” argument on The Rachel Maddow Show

    Normally I wouldn’t mention this here, but this is the first time, to my knowledge, that this blog has been mentioned on a major TV program. The segment starts with a series of clips of Republicans making the evidence-free claim, which ought to satisfy anyone who thinks I was making a straw man argument. I also didn’t realize that some had claimed Obamacare was the biggest tax increase in the history of the world or the universe. Do we have data on taxes levied in other planetary systems? One cannot be evidence-based on that one even if one wanted to.

    Anyway, Ezra Klein did a good job. Check it out.

    Also, in the comments, please try to resist making the same counterarguments repeatedly. I’ve already given several reasons why it doesn’t make sense to include premiums as a tax, etc. Go see the comments to the prior post for those.

    My recommendation to folks who want to oppose Obamacare on redistribution grounds: Be satisfied that it does include some new taxes, though they’re levied on the wealthy and, in time, those with high-premium plans, plus a small penalty for lack of compliance with the mandate, which will affect 2% of the population. That’s the price for taking large strides toward universal coverage, as well as beginning to undo the tax exclusion of employer-sponsored plans. I wish we could do that for free, but we can’t. It’s perfectly fine to argue that they are not worth the price, but here you won’t be able to do it by distorting the facts.

    @afrakt

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    • I think the saddest thing I’ve learned from the post-SCOTUS posturing is that many Republican politicians, instead of rejecting Obamacare as a means of reaching the goal of universal coverage, are clearly rejecting the goal of universal coverage itself. The hatred and distrust of all government intervention is just so strong it seems to warp all sense of humanity or social justice.

    • Is there evidence that anything on MSNBC qualifies as major?

    • The tax hikes in PPACA are designed to grow larger over time, by indexing to general inflation (instead of medical inflation) or not indexing to inflation at all. CBO predicts longer-term tax hike equal to 1.2 percent of GDP, with tax hike growth continuing to grow as a share of GDP over time.

      If you use the 1.2 percent figure in your chart, PPACA’s increases are outmatched only by the temporary tax hikes passed during the Korean War.

      • You need to cite some analysis on this. My understanding is that most plans will avoid the Cadillac tax by reducing generosity, hence premiums. That’s certainly the what one would expect from economics theory.

        • Austin:

          This is what the CBO has to say on the matter:

          “Under the extended-baseline scenario, CBO estimates, the recent health care legislation would raise revenues as a share of GDP by 0.5 percent in 2020, by 1.2 percent in 2035, and by increasing amounts thereafter.”

          “Thus, in CBO’s estimation, whether policyholders pay the excise tax through higher premiums or avoid it by switching to lower-cost plans, total taxes will ultimately rise in comparison with what would have happened in the absence of the new excise tax. Accordingly, CBO projects that the excise tax will increase revenues by just over 0.5 percent of GDP in 2035 and eventually by over 3 percent of GDP in 2080.”

          http://cbo.gov/sites/default/files/cbofiles/ftpdocs/115xx/doc11579/06-30-ltbo.pdf

          This is what CMS’ actuaries have to say about the “high-income” surtax:

          “In 2013, for example, about 3 percent of all workers are estimated to be affected by the higher tax rate; by 2080, this percentage increases to an estimated 79 percent.”

          http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2010.pdf

          • Right. That makes sense.

            If you follow one of the links in my prior post (the one with the chart) I think it tracks revenue by year after enactment. If you want to use a 2035 figure for Obamacare, you’d have to use the right corresponding years for all the rest. That would almost seem like a fair comparison. I have no idea how it would affect the relative order.

            My caveats would be that (a) you have picked an Obamacare year that maximizes the revenue. Maybe other taxes were maximized in different years. It seems like cherry picking. The remedy would be to look at the total across an X-year time period for some X. (b) Looking out so far for any tax or policy may not be possible or informative, as it is tweaked over time, even rolled back (especially for taxes). I doubt Obamacare’s taxes will be in 2035 what they are today. I doubt many of the other tax laws stayed put for that span.

            Anyway, feel free to work it out.

    • If they “avoid” the excise tax by selecting a less generous plan, the employee compensation that would have gone to paying higher premiums will now be taxed as income.