How is Obamacare the "largest tax increase in US history"?

I hear conservatives spouting this now. Given their record I assume it is a flat out lie but I am open to some type of rational explanation if possible.

Until then it is just election bullshit.

The way to get to “the largest tax increase in U.S. history” is to first include both the penalty for not purchasing health insurance, and also the cost of premiums for those who do purchase health insurance, as a tax (the Supreme Court included only the penalty as a tax). Then, you have to count health insurance premiums for every person in the country, even those who already have insurance, as a tax increase. Finally, you have to assume that every person who has health insurance is paying 100% for it, with no employer contribution, and no benefits from the various subsidies and exchanges that the law provides. If you add it up that way, it is the largest tax increase in U.S. history.

One example from Forbes.

In other words, it’s what we call a fib.

Thanks for that analysis; I wasn’t totally getting the idea behind the Forbes op-ed, but now I do.

Even taking into account both the mandate and the penalty, however, Politifact still gives the claim a rating of “pants on fire,” and helpfully provides a list of the biggest tax increases in US history (the last one was in 1968), as well as a list of the biggest tax increases since then. ACA is roughly equal to a few of the top five most recent increases, but is far from the largest ever.

Thanks. The thing about the PolitiFact analysis is that it is referring to taxes actually included in the law, such as taxes on pharmaceutical manufacturers and healthcare providers, increased Medicare payroll taxes for those with high incomes, and taxes on Cadillac healthcare plans. I don’t think those taxes are what Rush and Jeff Landry (“this is the largest tax increase on the poor and middle class in the history of this country”) are talking about.

But I thought the point of their analysis was that even including taxes that actually do exist in the ACA, it still comes nowhere near the largest tax increases in US history. Note the blurb they include at the bottom stating that the CBO figures they use take into account the impact of the penalty/tax on the overall number.

On second reading, I wonder whether the Politifact article actually does factor in the new premiums that will be paid by people who previously did not have healthcare. I’m not sure I see it. Have any legitimate predictions been made on what that is going to cost individuals (as opposed to the predictions made by opponents of the ACA, which takes into account the rather dubious factors you mentioned in post #2)?

A couple of months ago, I was listening to a man who is a business owner and is a rabid Fox News fan. He was going on and on about how Obama raised the taxes on his business. I was just nodding and ignoring, but I had to interrupt at this point and ask precisely what tax Obama had raised. He said that since Obama took office, his employee health insurance premiums had risen 80% because of Obamacare and because the insurance companies were preparing themselves for Obamacare. He said this was an Obama tax as far as business owners were concerned.

As an aside, he also claimed that since Congress had not passed any budgets for the last few years, Obama got to decide how much money the government spends and can spend whatever he wants on anything he wants. This is why the Republicans had to prevent the debt limit increase. The debt limit was the only thing stopping Obama from spending even more.

Yes, that’s the point, but they’re addressing an issue that really hasn’t been raised. No one is arguing that the taxes actually included in the law are “the largest tax increase in history,” so proving that they are not is a fairly meaningless exercise.

I’m certain that PolitiFact is not counting the new premiums to be paid as a tax. No one (including the Supreme Court) is calling them a tax, except for the conservative critics. In any case, I can’t find an estimate of those costs, which are offset by the fact that the people paying them will now have health insurance.

Remember people, any increase in revenues while a Democrat is in the White House is by definition, the largest tax increase in history.


Any sensible business owner would consider it part of the cost of running a business.

He should be thankful we are not in the previous era when there was not an upper limit on tax rates. I seem to remember that earlier in the century you could get nailed with something on the order of over 50%.

I believe there were Medicare related tax hikes involved that were greater than the anticipated individual mandate charges. Health savings accounts and the medical expense deduction have also been limited.

I hate to use Fox News as a source due to its usual unreliability, but here goes:

It’s obviously slanted and it doesn’t give specifics. But I searched the IRS site and that also does not help with the new withholding rates for 2013.

No doubt better information will come out as the law, as it stands, is digested.

What do you expect when they keep nominating the most liberal presidential candidate in history.

Wait. If what the man said was true, then he is right. Are you saying that if a law is passed that increases one of your costs 80%, then you don’t blame the law, you just chalk it up as a cost of doing business? When the cost of doing business was lower before the law?

Or perhaps the man is assuming cause-and-effect where none exists. What caused my health care to go up 10-25%/year during GWB’s term? It certainly wasn’t the Affordable Care Act. Note he [the business owner] says “since Obama took office” and not, “since ACA was passed”.

And frankly, given the new mandate that 80% of premiums must be spent on actual medical costs, I question the increase is being accurately reported to Alley Dweller (unless he’s radically changed coverage, in which is it really fair to call that “an increase”).

Possibly. But if he can make an argument that the ACA caused his costs to rise, it’s not something that he should just suck up and bear, or a cost that he should absorb anyways.

I disagree with the idea that it is an employer’s responsibility to pay for health care, or anything else. An employee agrees to work for a set wage and other benefits, if any, and that is the end of it.

The only thing I owe the guy who cuts my grass is $50. If he wants to spend that towards his health care or for liquor, it’s none of my concern. Once those two twenties and a ten hit his hand, my responsibility is over.

I call BS. Or more properly, Lies, Damn Lies, and Statistics.

The Washington Post numbers are stated as a percentage of GDP.

But of course the GDP was radically lower in 1951. The ~1.52% of GDP tax increase in 1951 is still a much lower tax increase in dollar figures than 0.49% of GDP attributed to Obamacare.

In dollar figures, the increases in the Revenue Act of 1951 brought in an extra ~5.15 billion (about 44.49 billion in inflation adjusted 2010 dollars). The tax increases in Obamacare are slated to bring in 71.18 billion in 2010 dollars. The 1993 Clinton Tax increase brought in ~33.337 billion (about 50.73 billion in inflation adjusted 2010 dollars) by comparison.

In inflation adjusted dollars, Obamacare is the largest tax increase.
As a percentage of GDP, Obamacare is not the largest tax increase.

Each side can, and will, present the statistics in the light most favorable to its own side.

? You are not your lawn guys employer. So why would he come up in a post about the employer/employee relationship?

How I wish this ridiculous statement was true.

Yep. They said that about Clinton’s tax increase.

The actual largest tax increase in history, though, came under…Ronald Reagan.

He could be, depending on various factors.