No, Obamacare Repeal Isn’t a Tax Cut for the Rich

Now that the last significant obstacle to Obamacare repeal is finally packing his bags and preparing to vacate the White House, the defenders of the law are desperately casting about for some talking point that will convince the public that the risibly titled “Affordable Care Act” should be left in place. Having failed to get anywhere with doomsday studies claiming that repeal will render tens of millions uninsured, they have reverted to an old lefty refrain. The Republicans, they tell us, are in a rush to get rid of Obamacare because they want to give tax cuts to the rich.

Dozens of diatribes denouncing this low plot have appeared in the legacy media during the past week, including a jeremiad in the Los Angeles Times titled, “The real reason the GOP is gung-ho on repealing Obamacare: It would give the rich a huge tax cut.” The research cited in all of these screeds was conducted by the Tax Policy Center (TPC), a joint venture of two left-leaning think tanks: the Urban Institute and the Brookings Institution. But anyone masochistic enough to actually read the study will discover that its findings have been brazenly misrepresented.

In fact, as Howard Gleckman reluctantly admits at the TPC blog, “Overall, dumping all the ACA taxes would cut taxes by an average of $180 per household in 2017 — a 0.3 increase in after-tax incomes.” So, how have the social justice warriors in the media concluded that Obamacare repeal is a tax cut for the rich? The answer lies in the way they have chosen to define the word “rich.” All of this journalistic dudgeon is about the repeal of one tax on investment income aimed at Americans with annual incomes exceeding $200,000 (individuals) and $250,000 (couples).

Never mind that Obamacare repeal will also reduce the taxes of low income Americans as well as those who fall in the middle tax brackets. The Democrats and their accomplices in the “news” media, their claims to the contrary notwithstanding, couldn’t care less about them. All that matters is that “the rich,” as the term is defined by the left, are going to benefit when Barack Obama’s “signature domestic achievement” joins Prohibition, the Sedition Act, the National Maximum Speed Law, and other big-government boondoggles in the graveyard of bad ideas.

Obamacare is, at bottom, a gigantic tax increase disguised as a health care reform law. Its primary goal is, and always has been, to transfer resources from the pockets of voters to the coffers of the federal government. This is why the President and his anointed successor, Hillary Clinton, were willing to tell any lie and do anything — legal or otherwise — to save it. And they may well have succeeded if the Obama administration hadn’t been so inept at implementing the law and Mrs. Clinton weren’t hopelessly incompetent at running a presidential campaign.

But thanks to their ineptitude, Obamacare is a goner and everyone will be allowed to keep more of their own money. Because the Democrats have vowed to fight repeal every step of the way, the Republicans will be forced to use the reconciliation process to kill the beast, but this maneuver will allow them to cut many of the taxes the law imposes. And some of the highest impact cuts will be to obscure taxes that all but the most dedicated policy wonks have forgotten, like the tax Obamacare imposes on people with high medical bills. As Ryan Ellis explains in Forbes:

Before Obamacare, those itemizing deductions on their taxes could deduct out-of-pocket medical expenses to the extent they exceeded 7.5 percent of income. Obamacare raised that to 10 percent of income. For various and sundry mathematical reasons, this tax increase falls squarely on sicker/older families making less than $100,000 annually. No Obamacare tax repeal is as much a direct help to the middle class as this one.

A far less obscure “tax” is that which you must pay if you fail to comply with Obamacare’s individual mandate. Obamacare’s apologists thought Chief Justice John Roberts was doing them a favor when he “fundamentally transformed” this fine into a tax in 2012, but that surreal ruling is now coming back to haunt them. In addition to the schadenfreude Obamacare opponents will enjoy when that tax is cut, the TPC study clearly shows that those in the lowest income brackets will benefit the most from the extirpation of this most hated provision of the unpopular law.

This is not what we are being told by the Democrats and their media co-conspirators. Using typically Orwellian logic, they tell us that repealing Obamacare’s subsidies will somehow increase taxes on the poor. In reality, these cuts will merely stop forcing hardworking Americans to pay for coverage they themselves cannot afford because of the “Affordable Care Act.” Meanwhile, these Obamacare dead-enders also insist that any revenue policy that fails to punish successful Americans amounts to “tax cuts to the rich.” This is why their side keeps losing elections.

Let’s hope the Democrats and the media keep it up. The shrinking power of the former and the decreasing influence of the latter are good for the Republic. Among other things, it will ensure that they are unable to perpetrate further crimes against democracy like Obamacare.

David Catron
David Catron
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David Catron is a health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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