The Poor Don't Pay Taxes? They Sure Do—For Obamacare!

Obamacare taxesChristopher J. ConoverOne of the few certainties of the Affordable Care Act is the tax load with which it's laden. The medical device tax, income tax surcharge on high-earners, tax on investment income, and others have all fueled complaints and, possibly, even killed some jobs. But these are all supposedly taxes on businesses and relatively prosperous families and individuals—the sort of people who make for unsympathetic victims when politicians are playing to the crowd. But, according to Christopher J. Conover of the Center for Health Policy & Inequalities Research at Duke University, low-income Americans shouldn't get too comfortable, because they're in for a soaking, too, as taxes on medical goods and services get passed along to them.

At Forbes, Conover writes:

Even the lowest income families (earning less than about $19,000 in 2012) will be on the hook for nearly $7,000 in Obamacare taxes over the decade that started last year.

Let’s be clear. Obamacare also absolutely and positively is socking it to the “rich” (approximately the top 2%). I calculate that families in that income range will end up paying $177,000 over the same decade. But the much more surprising figure is that such families will end up bearing only 34% of the Obamacare tax burden. It’s true that the top 20% of families will bear about 56% of the overall burden, but such families also account for 50% of after-tax income (at least according to the Consumer Expenditure Survey data I used to make my calculations).

In contrast, families in the lowest income 20% receive 3.1% of after tax income, yet will bear 7.3% of Obamacare’s tax burden. To be sure, many of these same families will be recipients of massive subsidies through Medicaid and the Exchanges. But it’s important for such families to understand that quite a bit of what’s being given by the right hand of government is being taken right back by the left hand of government in the form of all sorts of taxes on health services, health insurance and other goods and services that will be passed right back to them in the form of higher prices.

Lower-income individuals who work for large firms, points out Conover, will get relatively few benefits from Obamacare, but will still be on the hook for the taxes. They'll effectively be subsidizing their friends and neighbors at small firms.

Nothing comes for free, but sometimes the cost is distributed a little bit farther than politicians like to pretend.

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  • John||

    Could someone please explain to me again how the free shit brigade is somehow going to learn to love this thing so much it will save the Democrats and ensure it is never repealed? This bill seems to screw everyone in America. I have yet to hear of a single group of people who haven't been hurt by this bill. These people are so incompetent they can't even manage to give away free shit.

  • sarcasmic||

    You know why they can't give away free shit?

    Because there ain't no such thing (as a free lunch).

  • Ketogenic Paleo||

    TANSTAAFL, it is known.

  • Wandering Texan||

    These people are so incompetent they can't even manage give away free shit.

    Beautiful.

  • Brett L||

    I have yet to hear of a single group of people who haven't been hurt by this bill.

    I expect the insurance industry to have a good year. They got to dump a whole bunch of cheap bastards onto higher-margin plans.

  • Jerry on the boat||

    Yeah, and those insurance industry CEOs with their bonuses will long have retired when the shit hits the fan.

  • The Other Kevin||

    Like I posted yesterday, I have a pre-existing condition and I'm getting screwed just as badly as anyone else. So I'd like to see who's getting helped, too.

  • Calvin Coolidge||

    The "give away free shit" scheme doesn't only work if the free shit is paid for by different people than the ones getting it. If you disguise the tax burden sufficiently, as ACA is trying to do, you can get people to VOTE FOR THE FREE SHIT THEY ARE PAYING FOR THEMSELVES. Modern Democracy is truly a wonderful thing.

  • John||

    It may be "trying to do it", but I don't think it is succeeding very well.

  • Sevo||

    "Could someone please explain to me again how the free shit brigade is somehow going to learn to love this thing so much it will save the Democrats and ensure it is never repealed?"

    Easy. It was passed during the reign of Obo I, and any problems with it are the result of rethuglicans.
    See?

  • Tony||

    I haven't been hurt by this law. It doesn't affect me in the slightest. Maybe you should stop reading breitbart.com and start reading something with real news on it.

    A Republican government will have trouble repealing the law because it has a lot of aspects that people like and aren't going to take kindly to being forced to give up.

    And it's not free. Nobody ever claimed it was free. Unlike vast trillion-dollar programs (and wars) Republicans dream up, this was actually paid for.

  • Sevo||

    Tony|2.20.14 @ 5:15PM|#
    "I haven't been hurt by this law. It doesn't affect me in the slightest"

    Fuck you, asshole.

  • Sevo||

    Oh, and you're a lying piece of shit; you or your employer are paying for coverage you'll never need.

  • Tony||

    That's been the case the entire time I've had health insurance. That's how insurance works.

  • Sevo||

    Tony|2.20.14 @ 5:28PM|#
    "That's been the case the entire time I've had health insurance. That's how insurance works."

    No, idiot, that's not how it works.
    I was never covered for birth procedures, and neither were you unless you're dumber than I thought.

  • Tony||

    But you paid for other people's healthcare. I'm sorry if you think that shouldn't include women.

  • CampingInYourPark||

    Actually, it doesn't cost him a thing to be on his mom's plan, just like before

  • PapayaSF||

    Nobody ever claimed it was free.

    It was going to "reduce the deficit," remember?

  • PapayaSF||

    I haven't been hurt by this law. It doesn't affect me in the slightest.

    Well, if you have health insurance, one of the Obamacare taxes is a 2% tax on all health insurance plans. So you'll be paying that, fool.

  • Tony||

    How many holocausts does a 2% tax increase equal in libertarian freedom math?

  • Brett L||

    SLD: This is a guess at a politically viable way of extracting themselves, not what I think is a "good" solution.

    Here's my serious suggestion: Undo everything except the Medicaid expansion. Give whatever infrastructure on the exchanges you have to the states to run centralized price-comparison sites if they want, and declare victory. Say, "hey, we tried and it made things worse. We're just going to keep the part that 'worked'. Letting able-bodied, non-working, adults have Medicaid."

  • Pro Libertate||

    That goes with the latest massive and mostly unreported scam of everyone and their able-bodied mother going on disability.

  • wareagle||

    funny how everyone who thinks he's getting something on another person's dollar never stops to consider that the other person is likely getting something on his dime, too.

  • C. S. P. Schofield||

    "Nothing comes for free, but sometimes the cost is distributed a little bit farther than politicians like to pretend."

    Nothing comes for free and the cost is always distributed a little bit farther than politicians would like you stupid peasants to believe.

    FTFY

  • CampingInYourPark||

    Saturday was "National Youth Enrollment Day" for the Health and Human Services department: a culmination of extremely expensive effots to get young people to sign up for Obamacare-sponsored health care plans on Healthcare.gov.

    But the powers that be, who are utterly convinced that they are singularly capable of running a national health care system, approached Youth Enrollment Day with an interesting proposition: what if Healthcare.gov went down for scheduled maintenance on the exact day they suggested that every Millennial in America feed their personal information into an unsecured website all at once.

    Never ending lulz

  • CampingInYourPark||

    LMFAO:

    “We just found that out,” said Aaron Smith, co-founder of the recruitment group Young Invincibles. “Obviously it’s unfortunate.”

    “It’s not ideal,” another Obamacare ally said.

    http://www.freedomworks.org/bl.....-youth-enr

  • Sevo||

    "“It’s not ideal,” another Obamacare ally said."

    See? It's impossible for anything Obo ever did to be a failure. It's just a different sort of success!

  • The Late P Brooks||

    low-income Americans shouldn't get too comfortable, because they're in for a soaking, too, as taxes on medical goods and services get passed along to them.

    Tut, tut, J D; those poor people don't pay, the evil insurance company does. Everybody wins.

  • Teaching Student||

    My favorite is the argument that people can now quit the jobs they hate to "start their own business" or whatever... This law priced me out of the fucking health insurance market, so now, my only option is to stay with the job I hate, that doesn't give me 30 hours a week... because I have insurance through them... it only eats half my paycheck... Screw those bastards and their high and mighty attitudes...

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