Google+
Close

The Corner

The one and only.

Revisiting WaPo ‘Fact-Check’ of Obamacare’s Taxes



Text  



While Congress is busy debating a stop-gap spending bill and differing budget blueprints, one economic fact hasn’t gotten the attention it deserves: the hundreds of billions of dollars of tax hikes coming over the next few years as a result of the “Affordable” Care Act.

The Washington Post recently decided to weigh in on the health-care-reform law’s tax hikes. The Post’s “fact checker,” Glenn Kessler, looked at comments from an exchange between two members of Congress:

SEN. RON JOHNSON (R-Wisc.): The fact of the matter is, we already have a $1 trillion in middle-income tax increases hitting us in Obamacare. They’re hidden, but it’s middle-class . . .

REP. DEBBIE WASSERMAN SCHULTZ (D-Fla.): No, first of all, that is completely untrue. There are not $1 trillion in taxes in Obamacare.

[ABC's "This Week," March 10, 2013]

The Washington Post ultimately concluded the spirit of what Senator Johnson said was accurate: The president’s law is built on a $1 trillion in tax hikes, though they point out that these tax hikes are not limited to the middle class exclusively. They further concluded that Debbie Wasserman Schultz was inaccurate to call such a claim “completely untrue.”

The fact is that the “Affordable” Care Act will impose $1 trillion in new taxes on the American people. That isn’t anyone’s opinion — it’s the official conclusion of the Congressional Budget Office. The CBO’s letter to Speaker Boehner last summer verified that there is $1 trillion in new revenue in the law.

When we heard Senator Johnson’s words, we assumed Johnson was making a general statement about whom the taxes specifically affect: There’s a $1 trillion in tax hikes and many of those are hitting the middle class. Could Senator Johnson have been more precise? Probably. But there is not an official definition of the “middle class.” The CBO doesn’t define the middle class, the poor, or the rich.

We definitely know that these taxes won’t just hurt the rich. In fact, higher-income Americans are the ones best positioned to avoid the law’s most harmful effects on their pocket books, while middle-class and low-income families will be hit with multiple taxes.

In fact, the Post alluded to analysis from the Joint Committee on Taxation that confirms that many of the taxes in the law will hit Americans making under $200,000 annually (and families making less than $250,000 annually). While the law does not define whether these Americans are “middle class,” these are the same people whose taxes the president repeatedly pledged not to increase. Oops.

As the JCT explains, these Americans will be taxed if they do not have health insurance and taxed if they have the wrong kind of health insurance, and their health insurance company will be taxed, too. The last tax is especially dumb — the CBO has said that this tax will be “largely passed through to consumers in the form of higher premiums.”

And it’s not just the JCT and the CBO that believe the “Affordable” Care Act actually will increase the costs of prescription drugs, health insurance, medical devices, and much more, all representing implicit taxes on consumers. According to an April 2010 memo from the actuary of the Medicare program, the medical-device tax, the pharmaceutical-drug fees, and the health-insurance excise tax will “generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums.”

Overall, we believe Senator Johnson’s argument actually understated the harmful economic effects of the “Affordable” Care Act.  We would argue that the costs to the middle class will be far worse than simply the expected effects of $1 trillion in new tax increases. The CBO has said that the law will reduce national employment by more than 800,000 jobs. Medicare’s chief actuary has predicted it could cause 15 percent of hospitals to close by 2019, and eventually even cause providers to stop accepting patients on Medicare or Medicaid.

And not all negative impacts have even been quantified yet. The CBO can’t score all the delayed access or denial of care that patients will experience. They haven’t detailed how the $1 trillion in tax hikes will harm specific sectors of our economy and cause businesses to shrink — for example, the dampening effect that the medical-device tax will have on innovation, or the ways in which it will prevent new devices from ever reaching patients.

While the law continues to be implemented, Americans of all income levels will soon realize that this law doesn’t deliver the care they were promised. Instead, it will raise their taxes, threaten their jobs, and reduce the quality of their health care.

As doctors, these are facts we can’t live with.

As senators, we will continue to work to ensure more Americans get the care they need, from a doctor they choose, at a lower cost.

— John Barrasso, M.D., is a U.S. senator from Wyoming and Tom Coburn, M.D., is a U.S. senator from Oklahoma.



Text  


Sign up for free NRO e-mails today:

Subscribe to National Review