A letter writer from Aitkin recently claimed that economist Bruce Bartlett (ex-GOP-economist, cum neo-Keynesian) has “punctured” the claim that the tax increases for Obamacare will fall on the middle class. This would be news
to the Congressional Budget Office, which estimated that those with incomes of $120,000 or less will pay 45 percent of the total taxes for failing to insure, and that people falling within this group will represent 76 percent of those paying the penalty tax. Further, the total tax increase on these middle class taxpayers is estimated to be $2 billion. (Congressional Budget Office, “Selected CBO Publications Related to Health Care legislation, 2009-2010,” December 2010, p. 73, http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/120xx/doc12033/1...).
Of course, the tax for failing to insure is only one of the taxes associated with Obamacare that will fall on the middle class. There is also the 10 percent tax on tanning services, the 2.3 percent excise tax on medical equipment, the 40 percent tax on comprehensive health coverage on so-called “Cadillac” health plans (that’s right, there will now be a penalty if you are too well insured), and new taxes that will apply to Flexible Savings Accounts and Health Savings Accounts.
As for Bartlett’s absurd assertion that there is no market feedback no matter how high the government raises taxes, even a non-economist can see that this is obviously false. If every dollar you earned were confiscated by the government, how hard would you work? Obviously, there is a point at which you will not be as productive if you are taxed at too high a rate, and anyone who is honest with him or herself knows that instinctively.
Judith Muehlbauer
Brainerd
Comments (22)
Add commentSometimes your gut is wrong.
Sometimes your gut is wrong. Taxes used to much higher on the wealthy and they did just fine at creating jobs and starting businesses.
Raising the capital gains tax from the current 15% to 20% would probably have ZERO impact on investors.
Uh, no they weren't doing "just fine"...
...creating jobs when the highest income tax rate was at 90 percent. That's why Kennedy wanted them cut. You are not addressing my argument, either. My point is that there is a point where high income taxes become a disincentive to production. Where that exact point is may be debatable, but everyone KNOWS that 100% taxation would be a disincentive. Or are you telling me you would put in extra effort to make more money if all the fruits of your labor would be confiscated by the government?
Did I say 90%. Did I say
Did I say 90%. Did I say 100%. No I didn't.
Fishhead
neither you, southie, snow,marsbar,itterditter,che, or eyolf will put anything in until they close the gate on your gulag. And you all deserve what you get.
Obviously, our low taxes now make business
owners want to outsource their production and offshore their profits. They are the job creators all right...for Asia.
They are doing just fine
Mitt is too embarrassed or arrogant to reveal how low his accountants managed to compute his tax "burden." When the information does become public knowledge, he will need more than donations to become president.
He has all he needs to become President
He's not Barack H. Obama.
Sheesh, Ey...
...not quite. You will no longer be able to reimbursed tax-free from your HSA for OTC drugs (this will cost taxpayers $5 billion) and they have eliminated penalty-free hardship distributions from HSAs (this will cost taxpayers $1.4 billion, and I might add that hardship distributions are needed more than ever given this economy).
Not only that, but there are many provisions of Obamacare that fly in the face of the high deductible plan idea that is part and parcel of the HSA concept, for example, all sorts of first dollar service mandates. The lefties are trying to turn HSAs into HMOs (I guess because they've done such a GREAT job of keeping down costs).
So Fish agrees...
...there is a point at which income taxes can be so high that they create a negative incentive to produce above a certain point. My focus was on Bartlett's supposed contention that you could raise income taxes very high without any effect on people's behavior, not on capital gains taxes.
The thing about capital gains taxes is if you raise them too high, rich people will simply not sell their holdings, because they don't have to. Can you please tell me how people not selling their stock and not incurring any taxes is going to raise revenue?
And corporate taxes are not at an all time low, even for our country. In fact, they didn't even exist until the early 20th century, and they remained lower than they are now right up to about 1941.
What's more important than our corporate tax history is that there are a lot of countries with way lower tax rates than we have, but that's only one reason that companies outsource or go offshore, labor and overhead costs are lower and regulations are not so stifling.
Corporate taxes were low when
Corporate taxes were low when the robber barons were pillaging this country AND when the Great Depression started.
As a matter a fact, Ey...
...if a person can treat their cold at home without going to the doctor, it could do quite a lot to reduce the cost of health care. I'm surprised you didn't consider that.
The point is, Scary...
...THEY control when they realize income, not the government. Capiche?
Yessir mr eyolf
everyone should spend $100 on a Dr. office visit to get prescriptions for over the counter drugs. Actually, I'd bet a lot of welfare folks already do. (but wait, that's not their money they're spending!)
Hmmm...
...so low corporate taxes encourage people to engage in dishonest business practices, is that it Fish? Then why do we have such a dishonest business climate with high corporate taxes?
I think your attempt to connect low tax rates as the cause of unfair businesses practices is a little tenuous, at best. What can be argued rather persuasively is that economic growth during the early 20th century (the depression not withstanding, which of course was not caused by taxes that were too low) was a lot healthier than it has been when corporate taxes were at their highest (like during WWII). And just so we're clear, I don't think WWII made us richer, that's why we had to ration consumer goods during that period.
Actually eyolf,
you are right about the same place on that. I really wasn't referring to HSA's but I guess I replied wrong. I personally think HSA's helped lower insurance costs because people could see their own money flying away every time they went to the Dr. It brought reality home more than an 80-20 plan, so to speak. At one time my company had a 100% plan available for a very reasonable price. Guess what happened? A few people abused it so bad with thousands of Dr. visits and prescriptions for every drug known to man that it had to be thrown out. Everyone that didn't abuse it lost out more than the abusers. That aside, I think that a very large part of the high health care costs are people that pay zero for health care, but use the clinic and Dr. for a zillion problems that working people that have to pay those costs don't. Did I focus on welfare folks? Probably yes. Did I focus on single mothers? Probably yes. And you know what, sooner or later we have to hold a bunch of people accountable for their personal choices in life. The people that choose to be dependent do NOT have the right to enslave everyone else because of laziness. (Before you screeech, read again, "The people that choose to be dependent, Not those that have no choice.)
"...so low corporate taxes
"...so low corporate taxes encourage people to engage in dishonest business practices, is that it Fish? Then why do we have such a dishonest business climate with high corporate taxes?"
GREED and it will never go away regardless of the tax rate. The money hoarders like Romney will never have enough to fill the hole in them and if we don't keep their greed from consuming everything around it like a black hole pretty soon we'll find ourselves headed toward the blackness.
GREED is what consumed regulations through back door deals with congress and brought us to this point in time where common sense regulations are gone. The banksters can walk off with tens of millions in bonuses after losing billions of dollars of depositors money by gambling on derivatives.
GREED is consuming this country.
Days of the robber barons returning on the coat tails of perfect
The days of the robber barons returning on the coat tails of a perfect smile this fall. It will be a feeding frenzy of de-regulations on everything from pipeline safety to banking regulations and the 99% will pick up the tab while the wealthy walk away with the cash.
Here's a good example from todays paper of how GREED feeds upon itself and innocent people suffer.
http://ap.brainerddispatch.com/pstories/state/mn/20120724/1021840629.shtml
The corrupt way we finance elections has allowed GREED to triumph over commonsense regulations and people have died as a result. The regulations on oil pipelines in Texas are so non-existent that the pipeline company doesn't even have to know within hundreds of feet where it's own pipeline is buried. Dozer operators have broken into pipelines that they were told by the pipeline company were a safe distance away and died in a fireball.
Yes Ey, that's exactly what I was saying...
...Fish was linking low tax rates with Robber Barons. There is no link as far as I can see.
And I don't know where you get the idea that anyone on the conservative side supports illegal business practices. For that matter, I don't support government practices that pick winners and losers as I think the market should be doing that. Where things get murky is when you talk about "unethical" business practices. Unfortunately, the leftist understanding of unethical means that you can never have layoffs even if you're going bankrupt and that's what needs to be done to survive. Or in the case where lefties insist on taxing the life out of corporations so they aren't competitive and then whines about how they are outsourcing to countries with low tax and labor rates (which, BTW, leftist CEOs and conservative CEOs are equally likely to take advantage). I don't find the leftist position particularly ethical in those cases because their hunger for tax money to spend on social programs which do NOTHING to eliminate poverty (did you notice that poverty rates are as high as they were in the 60's before so many of the social programs were implemented?).
Greed is not any worse than it's ever been...
...I might add that entitlement types are pretty greedy, as well. And on what basis? They think other people should work to support them when they are capable of doing that themselves just because they were born? I do NOT have a lot of money and I do NOT covet other people's money. As far as I'm concerned, unless a person is making their money illegally, they have a right to keep a large share of what they earn. That's not greed, that's justice.
Meanwhile those who refuse to work shouldn't expect those who do to help them live in luxury. They should expect a little deprivation, because even supporting their basic needs is taking a fair share of the fruits of labor from those who do.