President Obama likes to say his campaign is about building up the middle class, but his signature initiative in office — ObamaCare — will pile thousands of dollars in new taxes and higher health costs on top of America’s middle class.
How so? Through redistribution, of course. The president has made no secret of his fondness for using the government’s tax and spending powers to spread our diminished wealth around from one group of Americans to another. And ObamaCare is nothing if not a massive redistribution machine. It places huge new financial burdens on some Americans — primarily those who already have health insurance, including the vast majority of middle-class families — in order to extend new federal entitlement commitments to other households, primarily the uninsured.
In broad terms, the amount of redistribution is easily ascertained form the aggregate expenditures and taxes contained in ObamaCare. According to the Congressional Budget Office (CBO), in 2020, ObamaCare will spend $229 billion on a Medicaid expansion and a new subsidy program for health insurance. These expenditures will primarily benefit 29 million people newly enrolled in Medicaid and the insurance subsidy program. That works out to nearly $8,000 for every newly insured American, or about $21,000 per newly insured household.
Much of the rest of the legislation is devoted to extracting these resources from everyone else in the country — about 290 million people — who won’t benefit from the new spending programs, and doing so in way that obscures what’s taking place. For these Americans who already have insurance, the law contains nothing but new financial burdens, in the form of higher taxes, higher premiums for their existing plans, and lower benefits, particularly for those on Medicare.
The sum total of the new taxes and Medicare and Medicaid cuts is about $278 billion in 2020. That’s nearly $1,000 in costs on average for most of the country, or $2,500 per household.
ObamaCare’s apologists say that these costs will primarily affect the rich, but that is not true. ObamaCare’s taxes and benefit cuts will directly increase burdens on middle class families. Among the most burdensome provisions are the following.
- The “Mandate” Tax. The Supreme Court officially designated ObamaCare’s individual mandate as a new “tax” on persons who don’t enroll in government-sanctioned insurance. CBO recently indicated that about 11 or 12 million uninsured people will have to pay this tax, but only about 6 million will do so (the others will successfully evade it). The total tax payment for these individuals will reach $8 billion in 2020, or an average of about $1,400 per person. Almost all of these taxpayers will be middle-class Americans, as the poor are exempt and there are very few rich people who are uninsured. According to CBO, 80 percent of those paying the tax will have incomes below five times the poverty rate, or about $115,000 in income for a family of four in 2012.\
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