I’m so glad I’ve cheered you up!
In their 2013 report “Subtraction: why two minus one equals one”.
So you’re just going to hand wave away serious questions about your claims with this sort of pure BS? :rolleyes:
Sometimes they do, sometimes they don’t. Overall, some portion probably do work less due to the increase in marginal rates. But from what I’ve seen it’s far from conclusive that the effects are nearly as clear-cut as “increases in marginal rates always reduce labor participation”.
It seems to me that the only marginal tax rate that truly “force” you to alter your behavior is one that is over 100% (that is, working more literally costs you money). I know of a few cases where that has been the case in the past, but I haven’t seen any evidence that the ACA is one of them. Maybe you can enlighten me? Everything I’ve seen shows a pretty smooth reduction in benefits for exchange plans. The only point I can think of is if you were right on the edge of Medicaid eligibility (138% of FPL I think) you might work less to stay eligible.
Well, obviously there are schools of thought where all taxation is coercive. I do not agree with that opinion, but I can see why some people do.
I do disagree with iiandyiiii that this is a great report for the economy. Like most economic outlook reports it has some good, some bad, and a lot of “eh, we’re not really sure”. That’s also true of the section dealing with the ACA.
Putting the snark aside, I’m not sure if the whole report is positive for the economy; my point is only about the change in the labor force estimates, which does seem quite positive to me.
Here is another bright spot in the report that debunks a right-wing talking point:
On balance, the report is good news for ACA supporters, and bad news for those seeking to repeal or replace the ACA.
I answered your serious questions. That last one couldn’t have possibly been serious, because obviously when workers retire or choose to work less because they can afford to, then other jobseekers will have an easier time finding a job due to less competition. That’s supply and demand, ECON 101, or even ECON for athletes.
We’re discussing the CBO report, right?
“If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work. In addition, if the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed.”
I’d say even the labor force estimate is a mixed bag, although in the context of the entire ACA vs. pre-ACA I think it clearly falls on the “ACA=good” side of the spectrum.
The potential problem is if the combination of the Medicaid phaseout and the reduction in subsidies up to 400% of FPL make the incentives to not work, or work less, even stronger than they already are. There is some evidence that there is a “trap” around twice the poverty level whereby even doubling the amount of work (or adding a second parent working) doesn’t really help the family situation much because of the reduction in benefits that come with it.
I tend to think that since ACA subsidies go all the way to 400% of FPL this won’t be as much of a problem as it has been for other programs, but time will tell. I’m not sure the numbers in this report do much to bolster either side, since it’s very much a GIGO situation (like most CBO reports it depends largely on what model they used to measure the effects).
Well, the CBO report and the body of work surrounding the assumptions they make about the effect of marginal tax rates on labor participation. While there has been study in this area, like so much of economics I’m not sure we can really say that a model is very accurate down to the 1% of compensation levels.
[QUOTE=CBO]
“If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work. In addition, if the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes
are designed.”
[/QUOTE]
You may notice a number of "If"s in that paragraph, for example, and one “depending”. The immediately following paragraph is:
[QUOTE=CBO]
CBO’s estimate of the ACA’s impact on labor markets is subject to substantial uncertainty, which arises in part because many of the ACA’s provisions have never been implemented on such a broad scale and in part because available estimates of many key responses vary considerably. CBO seeks to provide estimates that lie in the middle of the distribution of potential outcomes, but the actual effects could differ notably from those estimates.
[/QUOTE]
Nobody really knows exactly what the responses are to higher marginal tax rates, other than the obvious one that a >100% marginal tax rate makes it stupid to work more. At 50%? 60%? Nobody knows for sure, particularly at the lower income end (most of the studies seem to focus higher up the curve).
My hope, although admittedly just that, is that this estimate is too focused on the purely economic impacts and not the knock-on effects of a healthier labor force, which have the potential to swamp the types of effects described here.
Doesn’t a reduction in labor of the equivalent of two million jobs’ worth of hours also mean we should expect a reduction in income tax revenue?
Cut programs and/or raise taxes. In the end we’ve got to pay for this government somehow. TANSTAAFL
No, because the report does not say 2 million jobs are going away; it says 2 miillion workers will choose to leave the workforce voluntarily, creating jobs for 2 million unemployed. This is a positive thing for the economy, with no reduction in tax revenue.
You may notice that the two "If"s in that paragraph reflect the current situation, not some hypothetical future. So they are basically “if the current setup continues” type of statement. And the depending gives you a choice between “discouraging work” and “other economic distortions”.
Another ignorant statement. Especially ignorant since it was already discussed, on this thread, that nowhere in the CBO report does it say that “2 miillion workers will choose to leave the workforce voluntarily”, or even anything remotely resembling that.
You haven’t read the report, so your opinion is irrelevant.
[QUOTE=CBO report]
The reduction in full-time-equivalent employment that CBO expects will arise from the ACA includes some people choosing not to work at all and other people choosing to work fewer hours than they would have in the absence of the law; however, CBO has not tried to quantify those two components of the overall effect. Because some people will reduce the amount of hours they work rather than stopping work altogether, the number who will choose to leave employment because of the ACA in 2024 is likely to be substantially less than 2.5 million. At the same time, more than 2.5 million people are likely to reduce the amount of labor they choose to supply to some degree because of the ACA, even though many of them will not leave the labor force entirely.
[/QUOTE]
“more than 2.5 million people are likely to reduce the amount of labor they choose to supply to some degree” is in no way equivalent to or even resembling “2 miillion workers will choose to leave the workforce voluntarily”
A distinction without a difference.
Right, but from the question of whether income taxes go down all that matters is how much workers are paid. And the reports seems to say that the net reduction will be something like 1% in labor compensation by 2024. I’m assuming that’s because the people hired to do the work of the 2-million-equivalent workers will get paid a bit less to do so than the folks that reduced their hours or stopped workers.
However, since this is all focused on workers at the low end, who tend to have little-to-no federal income tax liability I’m not sure the effect on revenue would be noticeable at all. Certainly swamped by the changes in the growth forecast included in this report.
No, you really didn’t answer anything. You’re making claims of what affect it will have on the labor market, without any proof to support your claims. Referencing elementary economic concepts does not equal an answer or “proof”. Meanwhile, the CBO outright says it’s a net reduction in labor, not that it will make things easier for people looking for more work hours. In the advanced form of economics that is sometimes referred to as “reality”, net reductions in labor are not considered “good” for the economy.
Since when is it necessary to keep the entirety of Obamacare in order to keep the cuts in other spending that reduce the deficit more than the increased costs of the expansion of care?
Repealing the parts of Obamacare that increase costs while keeping the cuts in other spending, and the result is even more cuts in spending.
The CBO does not say that it would create room for 2 million unemployed. A NET REDUCTION in labor means just that, it does not mean that new gap in unworked labor gets filled in by the unemployed/underemployed.