Exchequer

Obamacare, Taxes, and Wishful Thinking

When Obamacare was being debated, all the bright young things insisted that it would reduce the deficit, or that it would prove at worst practically deficit-neutral. And they still do. And they are absolutely right: If Obamacare’s spending comes in on budget, if all of its savings measures are fully enacted, and all of its taxes are fully implemented and produce the expected level of revenue, it will be so.

Stop laughing.

Of course, Obamacare’s spending estimates go up practically every time somebody takes a look at it — the CBO added another $81 billion last summer — and almost certainly will continue to do so.

And now the tax side is in question, too: A group of Democratic senators is seeking to delay the implementation of new taxes on medical-device manufacturers, citing concerns about competitiveness for the industry. Other than what they believe to be temporary economic weakness, all of the arguments the Democrats make against implementing the tax now are arguments against implementing it ever. My prediction is that this one will be the first to go.

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