The silver lining in the Supreme Court’s upholding of the Affordable Care Act for Republicans was the court’s ruling that the fine to be paid by people who can afford it but choose not to buy insurance was a “tax” not a “penalty.”
Their spokesman, Rush Limbaugh, rushed to the airwaves to declare, “What we now have is the biggest tax increase in the history of the world.”
And what we have there is a big, fat lie:
But when you compare the projected revenue effect of the individual mandate to the actual revenue effects of other, actually large tax increases, the claim becomes laughable.
We used the Treasury Department’s four-year data on the revenue effects of large tax increases signed by Ronald Reagan, George H.W. Bush and Bill Clinton; along with CBO projections of the revenue effect of the mandate adjusted for its GDP projections during the mandate’s first four years.
The mandate is tiny by comparison.
And, from Kevin Drum:
This is so stupid it hurts…
[But] let’s be fair: When Republicans talk about ACA’s tax increases, most of them are talking about all the taxes in the bill, not just the penalty. But they’re still off base. There have been 15 tax increases of significant size since 1950, and Jerry Tempalski, a tax analyst in the Treasury Department, has estimated the size of all of them as a percentage of GDP. Tempalski hasn’t estimated the eventual size of ACA, but PolitiFact took a crack at it using the same methodology, and they figure that ACA amounts to a tax increase of 0.49% of GDP seven years from now. That places it tenth on the list.
It’s fair for Republicans to complain that ACA includes a bunch of new taxes. It does. Most of them fall on high earners and corporations, not the middle class, but they’re still taxes. However, the “biggest tax increase in history” nonsense is crazy, and no news outlet interested in accuracy should let it pass without challenge.
The bottom line, from Josh Marshall:
I’ve got a question: Just how stupid are all you reporters? No, that’s not a rhetorical question. Whether you want to call the ACA health care mandate a tax or not is mainly a semantic point. It’s a penalty or tax or perhaps a tax penalty on people who refuse to purchase health insurance, even after they received subsidies that make it possible. But Republicans are now saying it’s the ‘biggest tax increase in history’ — either of America or the universe of whatever. But this is demonstrably false.
The Congressional Budget Office says the mandate penalty will raise $27 billion between 2012 and 2021. $27 billion over a decade. Anybody who cares to can do the math. But if you want to call it a ‘tax increase’ — which is debatable — it’s clearly one of tiniest ones in history.
The real problem here for Republicans is that if the penalty in the Heritage Foundation’s mandate in Obamacare is a “tax,” then the Romneycare, which is also based on the Heritage mandate, also included a tax, which means that as governor, Romney raised taxes on Bay Staters.
Those are the semantics that are driving the Romney campaign’s flipping and flopping. If the penalty is a tax, then Gov. Romney raised taxes — and that would put him in bad odor with Republican Party boss Grover Norquist and the anti-tax fetishists in the GOP base.
- Section: News & Comment
I beg to differ:
Please refer to this quote from the CBO: http://www.cbo.gov/publication/43080
“Estimates Through Fiscal Year 2022
This report also presents estimates through fiscal year 2022, because the baseline projection period now extends through that additional year. The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012-2022 period; that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources).
The addition of 2022 to the projection period has the effect of increasing the costs of the coverage provisions of the ACA relative to those projected in March 2011 for the 2012-2021 period because that change adds a year in which the expansion of eligibility for Medicaid and subsidies for health insurance purchased through the exchanges will be in effect. CBO and JCT have not estimated the budgetary effects in 2022 of the other provisions of the ACA; over the 2012-2021 period, those other provisions were previously estimated to reduce budget deficits.”
Even the COB states that 510 Billion will be raised by “penalties.”
-Conservative Vato
That’s just silly. There’s no way the penalty to be paid by the tiny percentage of people who can afford health-insurance but refuse to buy it will be larger than, say, the expansion of payroll taxes on the middle class in the 1940s to pay for World War II. Not even close.
But, Mario, can we assume if you believe this is a huge tax increase then your party’s nominee therefore imposed the largest tax ever on Bay Staters when he was governor of Massachusetts?
Well, your right if you are comparing the creation of the income tax in 1913. To be correct the 1940s was really the first time there was a mechanism to collect the taxes. It was not a tax hike but heighten enforcement. It was insidious since withholding taxes pretty much hide from the masses how much they were actually paying in taxes to the government and made them grateful at every April to receive back a portion that was an interest free to to the government.
Hey, Let’s get this right. I am the Conservative Vato, not the “Republican” Vato. If Mitt is more conservative than Obama, then he defaults to my vote. The question we should ask should be “Is the state of the union better now than 4 years ago.” My answer is a resounding “No!”
Mario – Based on projections, what percentage of Americans are expected to be forced to pay the Heritage mandate penalty?
Everyone that pays income tax will shoulder the burden. Whether its in direct penalty, increased rates, or additional taxes later as the CBO numbers get revised. And they are already being revised. So the answer today, is about 52% . Or about the same amount of people against Obamacare. There are already companies poised to drop their insurance not to mention the waivers. This was not agood idea in a bad economy and an enormous national debt.
Wrong, Mario. The question was about the number of people who would be forced to pay the penalty imposed by the Heritage Foundation’s mandate. The answer — as I’m sure you know — is 4 million, according to Politifact:
That is the “penalty” that the Supreme Court redefined as “tax” and it is by no means the “largest tax increase in the history of the world.”
Here’s another question, and I hope you’ll give me a serious answer this time. First a few background facts:
I am a civil libertarian on social issues and a regulatory capitalist — like Reagan, the Bushes, Nixon, Obama, Carter, Clinton and every president we have had since Teddy Roosevelt — on financial issues. That means I believe businesses should self-regulate, but when they fail to and become hazards to the public welfare, the government has a responsibility to step in. (So, yes, by tea bagger standards, I’m a socialist.)
The “free enterprise” health insurance industry we have in this country is practically unique on the planet. No other country treats health care coverage as a commodity — other countries that have private insurers regulate them like utilities. In the U.S., however, health-care coverage is a “product” and increasingly a privilege but definitely not a right, and as corporate entities, the primary objective of the health-insurance companies is to generate profits for their investors — and they do. In 2010, the industry produced $7 billion in profit.
But the secret of their success is that they generate these profits by increasingly restricting — cherry picking — their coverage pool to those who are employed and relatively healthy, and as a result of this system they have now deliberately excluded one-sixth of Americans from coverage and thereby from receiving health care — roughly the entire populations of Canada and Australia (or California and Florida) combined.
This manufactured crisis costs taxpayers billions of dollars right now. Just as one example, the insurance companies are essentially shifting the cost of covering higher risk and poor people to taxpayers in the form of uncompensated care. The American Hospital Association estimates that hospitals gave $39.3 billion in uncompensated care to uninsured patients in 2010 — costs that are picked up by taxpayers either by write-offs or in increased public funding.
THAT is socialism — that is socialized debt, like TARP — and that is our current system, which Republicans/conservatives are determined to preserve and protect at all costs, as we saw in your candidates’ debates during the primary elections and in your 33 votes the House to repeal the Affordable Care Act.
So here is my question: Why don’t conservatives demand that Big Business — the insurance corporations — solve this crisis they have created themselves? Why do you insist on having the government come up with the solution?
Here is a fact: The insurance companies could resolve this crisis tomorrow, if they were motivated to. All they would have to do is do what auto insurers have done and scale the cost of their premiums so that everyone can afford to be insured. Economics teaches us that expanding the pool of people paying in lowers the costs overall — that is the foundational principle behind the Heritage Foundation’s individual mandate, for example. According to conservative pro-business ideology, this industry should be able to regulate itself and come up with a system to replace cherry-picking with a different profit-generating model.
But they refuse to do this. Why? What is stopping these corporations from resolving this crisis without government intervention? (And don’t say government regulation unless you’re prepared to identify which federal regulations specifically prohibit insurance companies from offering affordable premiums. I have looked and there are none.)
If conservatives really believed that business, not government, should find solutions, they would be demanding that these businesses resolve the crisis of the uninsured they have created rather than the right’s current “can’t do” nihilistic approach of fighting it out in the political sphere, simultaneously denying that the government should engage — even reversing their support for their own Heritage Foundation mandate that would deliver as many as 50 million paying customers to the insurance corporations (and even calling that system “socialism”), on one side and, on the other, ignoring the fact that these giant, immensely profitable insurers refuse to self-regulate and create a free-market solution that provides the United States with the same universal coverage that all of our trading partners and competitors have.
Jon,
You make good points. I am glad you chose continue the conversation.
But, the math does not add up. According to Politifact only 4 million will pay $5 billion, where will the other $506 billion referenced from the CBO report come from? If it is off by a factor of ten over 10 years, then the number will amount to 40 million people that will pay using simple math.
But remember, the whole law is currently estimated to cost $1.7 trillion over ten years, compare that to $390 billion using you numbers. Since the country is already in tens of trillions of dollars in debt, it is irresponsible to take that on now.
Additionally, if I were a civil libertarian, I would have started by adjusting the federal McCarran-Ferguson Act (1945) which limits the sale of insurance across state lines. I would have certainly not gone for a system that will lead to a single payer system right from the start. Adjusting McCarran-Ferguson would allow the free market to take over and really make the situation similar to the car insurance market that you compared. That is where capitalism would take over and limit the “cherry picking.” So in essence, federal regulation has not allowed insurances to self regulate.
Where business becomes so large that the it is not willing to act ethically and regulate itself, then it might be time for the government to step in and adjust regulation. However, this is an entirely different situation, it is taking over an industry.
This is a very complex situation and the ACA was not thought out well enough to be a good solution.{“We have to pass it to find out what is in it.”-Pelosi 3/9/2010} Instead of taking a problem solving approach to healthcare, the progressives in Washington decide to go “All In.” They aren’t “Betting on America,” they are gambling America’s future.
We have not even touched on tort reform, new research, quality of care long term, rationing, availability of doctors long term, the unwillingness of some states to accept ACA, waivers, and the continued upward adjustments in the cost of ACA. If the cost is continuously upward adjusted, any estimate we have right now will wrong and low.
Anyway you look at it, taxes will pay for this fiasco. The politically connected (read “trial lawyers” a least short term) will get rich, and tax payers will pay dearly long term for the almost certain bureaucratic waste that this program will foster. (Reference: medicare, medicaid etc.)
Let’s just say one should trust the government less than one should trust business. With business, it’s about the money. With government, there is no underlying logic that one can count on. Besides, with business there is always government regulation as a fall back, with government… well, we will see in November.
Conservative Vato -conservativevato.blogspot.com
Thanks, Mario, but I am familiar with all the Republican spin you copied and pasted here. (The government has not nationalized the health insurance industry, for example. That is ridiculous. The government is delivering as many as 50 million new customers to this industry. And allowing health insurance companies to privately nationalize and move their nationwide headquarters to the least regulated states, as the banks and credit-card companies have done, will further erode coverage rather than expanding it universally. Etc. Etc.)
I am disappointed but not at all surprised that you avoided answering my simple question: Why won’t the health insurance industry regulate itself and provide an affordable product that fulfills its secondary mission of providing insurance coverage to all Americans? The auto insurance industry has done it but the health insurance industry won’t.
To repeat: This insurance industry created this crisis in order to inflate its profits. It could solve the crisis it created tomorrow, if it felt any sort of responsibility to the health and safety of the American people. It does not and it will not, and based on the precepts and traditions of the regulatory capitalism system first established by Republican Pres. Theodore Roosevelt over a century ago, the government should step in, break it up or even nationalize it.
But the government did the opposite of that, Mario. It based the law on a plan developed by the Heritage Foundation, a think tank that sponsors the Rush Limbaugh show — a plan that was endorsed by Newt Gingrich, one of your party’s alleged big thinkers, and put into law in Massachusetts by your party’s nominee, Mitt Romney. For strictly political purposes — making the current president a “one term” president and installing Romney, a proven, serial liar and sleazy vulture capitalist, in the White House — corporate interests in your party waged an all-out war on its own reform plan. These interests funded a fake “populist” outrage group called the “tea party” (whereas every student of history knows it should have been branded the “Whiskey Rebellion”) and sent it into the streets with its misspelled signs and racist outrage. Heritage scrubbed its website, Limbaugh supporters started showing up at presidential events with loaded weapons and now your party has wasted 50 million taxpayer dollars voting 33 times to repeal the ACA, which, again, is your party’s own conservative health-care plan — without even bothering to come up with any sort of plan to replace it that achieves universal coverage. Instead, all we get is the right wing’s patented “can’t do” rhetoric.
I am not an economist or an expert in health-care finance, but I do know a little about politics and I will tell you this: You Republicans and/or conservatives (and trust me, Mario, no one outside your movement believes there is a dime’s worth of difference between the two) are reaching the end of this gambit of incessant negativity, this railing on and on while never bothering to offer a positive agenda. Your side is on the verge of repulsing middle-class, independent swing voters who are seeking solutions to our problems — and who are well aware of the Republican right’s responsibility for the economic collapse — but who are instead hearing unrelenting hateful rhetoric from Romney, McConnell, Boehner and all your other leaders. Your movement has done this before, with its communist witch hunts in the 1950s. After that debacle, history records that voters forced conservatism into the political wilderness for 40 years.
Keep it up now and watch what happens.
Jon,
The only significant hate rhetoric is coming from Bill Maher. Conservatives are made to apologize when they are perceived as going over line. But, it is called artistic freedom when a liberal does it.
In a capitalist society, the responsibility of a company ends at offering the products that the company feels it can sell in its own best interest. For instance, if you have lemons and want to sell lemonade, by your reasoning, it would be your responsibility to offer soda, tea, coffee, and whatever else someone else would prefer that you offer. When companies get together to fundamentally change an industry, it is called an Oligopoly.
I don’t get my talking points from talk shows but from researching issues and making a call on them. I was raise to be a democrat in a very liberal environment. The underpinning of my philosophy is the belief that American greatness stems from the freedom to exceed and/or fail in the American system. It comes from the entrepreneurial spirit. I believe that the government will never have a better solution than business. Even when the project requires resources beyond multiple industries it, government should go to industry for the brains.
Again, universal healthcare is a great concept but the US can not afford it and it is highly likely that it will be a fiasco . As far as the great lie, that happened before the Affordable Care Act was passed. Even the name is a lie.
From the left, right looks right but from the right, most Republicans look moderate.
Conservative Vato- conservativevato.blogspot.com
There you go again, Mario, parroting the Republican “can’t do” line: Unlike Canada, the UK, Japan, France, Germany, Scandinavia, etc., etc., the America is just not up to the task of providing health care to all its citizens. America can put a man on the moon but it can’t provide universal health care.
If car insurance companies can provide an affordable product, so can health-insurance corporations. The difference is that the health insurers have purchased the Republican/conservative movement and its apparatchiks and propagandists, and it is more than willing to spend a billion or two to fight this out politically — because they can afford it and it is more cost-effective to them than doing the right thing. This flies in the face of GOP-conservative ideology that ONLY business can solve business problems and that what business is perfect at is developing market-driven solutions. To me this proves, once again, that conservative ideology is impracticable and fantastical, which is to say utter B.S.
It never works in the real world — see Reagan’s presidency where, when you look past the spin you see no fewer than eight tax increases and massive growth in spending; Bush I’s mishandling of the economy; and the most disastrous presidency of all: the eight years of the George W. Bush regime, which was marked by one disaster and abysmal failure after another and another that ended with the crash of the economy and the Bush recession. At least Reagan got out of Grenada. Bush II left office after eight years without one single accomplishment — but rather with a record of two failed wars, one of which was unnecessary and prosecutable as gross incompetence or criminal negligence; running up the deficit with these wars and other Big Government sops; turning the America into a torture state; spying on Americans; and on and on. It’s no wonder he left office as the most unpopular president in the history of polling.
What history has shown is that when conservatives are given power, they immediately screw it up. What’s puzzling is why they want it so badly. You know in your heart that if Romney wins in November and Boehner and McConnell control Congress, the FIRST THING they will do is go on a Keynsian spending spree to get the economy growing and inflate job growth. The evidence of this is that it is what every Republican president has done since Hoover when faced with a recession.
The next thing they will do is green light Big Government initiatives like rounding up 12 million undocumented workers and their families and incarcerating them and/or hiring government bureaucrats to monitor all 4 million American pregnancies every year to ensure they come to term. Conservatives believe America is too incompetent to come up with a solution to universal health insurance coverage but you can rest assured they will stand up massive new Big Government bureaucracies for projects like these.
Again, middle income swing voters decide our elections these days, and one day soon they will start to notice how Republicans and conservatives are cheering for America’s demise, hoping it will fail. And if Romney is elected in November, that day will come sooner than later.
Jon,
I happen to have friends in Canada that have gotten sick and have had to wait quite some time to get treated. Usually the wait created complications that increased the level of care needed and suffering. Let me add, that Canada is doing economically better because they have a “drill now” mentality and oil sands.
I don’t agree that we have had conservatives in government control in the recent past. Reagan had a democrat congress. Bush was certainly not a conservative. Frankly, Bill Clinton was more conservative that either of the Bush presidents that is why I voted for him in the first term. During his terms, the average American’s wealth went up and the budgets were balanced.
That is not the case now. Average American wealth has declined.
Stating that, “There is a train coming and by the way you are standing on the tracks!” is quite different than “I hope you get hit by the train.”
The first is a warning just like I am doing here.
I always hope the best for America. I hope that one day we have an economy where everyone can get health care. I hope that one day every healthy American will be self actualized to improve their economic fate and the need for welfare and food stamps will be diminished. I hope that we can create an economy where the jobs that people want to do are the jobs that sustain the economy.
We are not there yet. Saying the truth should not be frown upon. We can not improve if we do not admit first that the situation is not optimal, if we lie to ourselves. When my daughter was young, there was a time when I had to say that we could not afford a pony at that time. At some point, America has to cut up the FED and Chinese Credit cards.(that’s another Blog.)
For now, the best way for Americans to get health insurance, food, cell phones, and other items they want and need is to create jobs for them that provide income enough to support those needs. The best way to do this in a sustainable fashion is to create an environment that promotes business especially small businesses. The government has let us down in that most important of issues.
on the topic of illegal immigrants, no one is going to incarcerate 12 million undocumented workers. That’s just illogical. Frankly, we can’t afford that either. If we don’t have an employment problem, the importance of the illegal immigrant problem is not such a priority and clearer heads can problem solve it. Reagan tried amnesty in the past but here we are again. The solution has to be an act of congress not an executive order.
The best of intentions mean nothing without results. The leaders know what needs to be done. I can only guess that they lack the backbone to do it. We had time to fix the problems but the wars and ObamaCare have accelerated the sands in our hourglass.
There is a debt train coming. It is cruising through Greece at the moment, then onto Europe. I hope we get a president that can lead us off the tracks.
Mario – I know many, many middle-aged working people right now in the United States who can’t afford health insurance and therefore cannot get treatment at all. They would be happy to have the option to wait. I had a work friend who lost his insurance in his fifties and then learned he had lung cancer. He died in a hospital here in Los Angeles leaving behind nearly $1 million in hospital and medical bills. This debt was eventually paid by the taxpayers — and it’s this broken system conservative-Republican-tea partyists are defending sometimes even with threats of violence.
As I said before, this is socialism. Like TARP, this is corporations socializing debt in order to protect their profits. Real conservatives would be outraged over this. Real Christians would be horrified that millions of people are unable to receive care.
Even after all these years now, I still can’t comprehend how conservative-Republican-tea partyists are able to ignore the fact that there are millions of AMERICANS who have no access to health care at all, and yet they criticize the Canadian system based on anecdotes that some care is delayed. Never mind that care is delayed in our system, too, and there is just as much anecdotal evidence that Canadians rarely have to wait. To them, apparently, the fact that a few Canadians have to occasionally wait for treatment trumps the fact that millions of Americans are denied coverage. What makes the denials so dastardly is that they are a deliberate part of a corporate strategy — a risk-reduction scheme — to boost profits.
Unless and until our system covers everyone, the Canadian health-care system will always be far superior to ours, period. So will Britain’s, France’s, Germany’s, Japan’s and every other country that ensures that coverage is universal. American is far behind our competitors and allies and conservative-Republican-tea partyists just do not care.
But what I really want to know is why you think it’s okay that the insurance corporations won’t fix this problem themselves — that they have forced this issue into the political arena. Conservative ideology rests on the fundamental assertion that government is bad and business is good, that the “free market” will produce the best solution. To me, this crisis in health care — like the financial crisis in 2008 which was caused by conservatives insisting on getting the government out of the way and letting the financial institution regulate themselves — is proof that conservative ideology is based on fantasy at worst and wishful thinking at best.
File this under, I hate to say i told you so…
From MSNBC, “Tax penalty to hit nearly 6M uninsured people.”
http://www.msnbc.msn.com/id/49092897/#.UFpwIo1lSpM
Again, Romneycare and Obamacare are both based on a plan developed by the Heritage Foundation, which is so conservative it sponsors Rush Limbaugh’s show. Romney, Gingrich and other right wing ideologues fully and completely supported the Heritage plan up until 2009, when the president adopted it as an alternative to a single-payer, Medicare-for-all (ie. a socialist approach) that true liberals, as opposed to DLC moderates like Obama, support.
Before Romney, Gingrich and the rest of the GOP hacks flip-flopped for substance-less, purely partisan political reasons, back when they were 100% in favor of the Heritage Plan, they referred to people who did not buy insurance but showed up at ERs needing treatment as “free riders.”
Now that the Heritage Plan is law, these free riders should behave responsibly, obey the law and buy insurance. Based on the Heritage Plan’s theory, the premiums should be lower in 2016 than they are now — down from the exorbitant $700 to $1200 a month cost today — because as many as 50 million will have entered the pool and lowered the premium costs. That is the conservative, free-enterprise pro-business capitalist theory that underpins the Heritage Plan.
In 2016, when the free riders show up at the ER — then as now — the government, i.e. the taxpayers, will have to pick up the tab. The difference will be that, after the ACA is in place, the costs of their care will be offset at least a little by the “tax” or “penalty” they collectively have to pay.
You continue come at me with your criticisms of the Heritage Plan, but you have never answered my question: Why hasn’t the free-enterprise capitalist system we have now solved the crisis of the uninsured? As I’ve said, auto insurers found a way to keep premiums affordable and still remain highly profitable. The private health insurance companies make $7 billion in profits each year for doing nothing. Their entire business model is nothing but a bureaucratic pay wall they have constructed between patients and doctors — they add no value, do not produce a product. They could avoid the ACA and solve this tomorrow if they wanted to. What is stopping them, Mario? You refuse to say!
If you and other right wingers don’t like the Affordable Care Act, you really should address your criticisms to the source of the crisis: United Health, Cigna, Aetna and the other big insurers. They let down all believers in free enterprise by forcing this issue into the political sphere. They forced the government to take action. You should also direct your complaints and criticisms to the inventors of the plan: http://www.heritage.org/
In closing, I have to say that based on this back and forth, Mario, I believe that if George Bush or some other Republican had deployed Romneycare/the Heritage Plan nationwide, you and every other conservative from Rush Limbaugh on down would be supporting it 100%. What proves this is the fact that, despite all the whining, lying and doomsaying, your side has not bothered to produce an alternative plan that would cover everyone. Why? You can’t — because the Affordable Care Act is the conservative plan. The only reason you guys don’t like it now is because it was implemented by the fictional anti-colonial Kenyan socialist you despise.
Let me call this behavior what it is: Un-American. By putting its petty partisan interests ahead of the best interests of the United States and its people, the conservative movement has once again shredded its credibility — just as it did time and time again under George Bush. The only difference today is that the American right has replaced George Bush as the symbol of its decadence and self-destruction with its current standard bearer, Mitt Romney, a lying, tax-dodging vampire “capitalist” with no core principles. That says it all.