Obamacare costs to fall mostly on middle class
Taxes resulting from the recently Supreme Court affirmed Obamacare will fall mostly on the middle class, according to the Wall Street Journal’s chief economist.
Wall Street Journal’s senior economics writer Stephen Moore said that nearly 75 percent of Obamacare costs will saddle those Americans making less than $120,000 annually. That would be the middle class. “It’s a big punch in the stomach to middle class families,” Moore said.
“Back in 2008 Barack Obama told supporters health care should never be purchased ‘with tax increases on middle class families,’” said Moore.
“By 2016, the fine (for those not buying health insurance) could be over $2,000 a year,” Moore said. In fact, the tax for not buying health insurance for an adult will be $95, and $695 in 2016. For families not buying health coverage, the tax will be a modest $285 in 2014. However, by 2016, those choosing to “freeload” on the system will be taxed $2,085.
One of the ideas behind the Affordable Health Act was to reduce the cost of health insurance. However, “we’re finding insurance premiums went up eight, nine, 10 percent,” Moore said. “If premiums continue to go up at that pace, people could be paying $300 to $400 more a year compared to what people are paying for health insurance.”
“The rationale for Obamacare was that it was supposed to be a solution to the problem that too many poor people do not have insurance. Even the Obama administration itself admits that the Obamacare mandate will not result in insurance coverage of 100 percent of Americans,” according to the Guardian Express. “When the mandate arrives in 2014, too many people may find themselves in the situation of our hypothetical worker in the new normal economy.”
First, this is not a normal economy. The United States has been in a deep recession since 2007 and there are few signs that suggest we are nearing an end to this ongoing downturn.
Second, this tax on those persons who can least afford it, will cause families to experience a further decline in their living standard.
I guess taxing the middle class, where most of the tax revenues exist, makes sense to the Obama administration. It will, however, cause a deepening of the recession — especially for the middle class.