Most politicians would wince at being accused of trying to push the biggest tax increase in U.S. history.
But under President Obama and the Democratic leadership in Congress, the question isn’t whether but which tax increase—the “cap and tax” bill or the health care reform legislation—is the biggest in U.S. history.
At IPI we’ve been trying to decide ourselves, but there are so many variables, moving parts and unknowns it’s hard to know.
The Wall Street Journal said last June: “Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history.”
To support the claim, the Journal cited the Heritage Foundation’s analysis, which found Waxman-Markey, the House version of the cap and trade bill, “would cost the economy $161 billion in 2020, which is $1,870 for a family of four. As the bill's restrictions kick in, that number rises to $6,800 for a family of four by 2035.”
As for health care reform the Congressional Budget Office (CBO) estimates that the House health care bill raises $572 billion in new revenues (i.e., tax increases) over 10 years, plus $167 billion in penalties from individuals who don’t get coverage and companies that don’t provide it.
But that’s not all. Although Democrats deny it, health actuaries crunching the numbers see significant premium increases, especially for those who buy their own policies, in part because of the “consumer protections” in the bill—a type of indirect tax increase.
So while the Heritage Foundation estimates the “cap and tax” legislation will increase costs for a family of four by $1,870 in 10 years, a PricewaterhouseCoopers’ analysis for America’s Health Insurance Plans found family premiums would be $4,000 a year higher under health care reform legislation—not including the tax increases.
So for my money—actually, it’s our money—the health care bill will be the biggest tax increase in U.S. history.
And let me just say when it comes to tax increases, being an overachiever is not a virtue—nor politically popular.
Today’s TaxByte was written by IPI resident scholar, Dr. Merrill Matthews.