The estimable Robert Rector at the Heritage Foundation laid out the numbers on January 20. While Rector’s laudable primary goal was to demonstrate the destructive effect of the subsidy structure on couples’ willingness to get or stay married (which will become apparent without further comment), he also devastatingly detailed what happens to people — married or unmarried — if they simply try to financially advance themselves.
The following information from Tables 2 and 3 of Rector’s post, with boxes added by me, illustrates the overwhelming disincentives of ObamaCare’s subsidy structure. Per Rector, “The subsidies include Medicaid eligibility, insurance premium credits, and out-of-pocket health care expense credits as applicable.” The examples presented involve couples earning equal incomes who have no children. Brace yourself:
The orange boxes represent examples where the subsidy decrease amounts to almost 80% or more than 80% of a couple’s $5,000 increase in combined or joint income. After adding another 7.65% for Social Security and Medicare taxes on top of the typical 15% (or higher) marginal federal income tax rate, the extra $5,000 earned will cost the couple more than $5,000 — even before considering state and local income taxes.
Then there are the purple boxes, where subsidy loss alone amounts to more than $5,000, including one case where it’s more than double that, before considering any other taxes.
The New York Times’s use of “wealth” in its headline for Leonhardt’s story was perhaps accidental, but in reality painfully accurate. People who advance themselves will not only in most cases be left with little or nothing additional to show for their efforts, they will in many situations have to pay for the privilege out of their own “wealth” — or if they don’t have any “wealth” laying around, by borrowing.
There’s a term for a state that penalizes additional earnings on a dollar-for-dollar basis, and it surely isn’t “representative democracy.” I don’t think anyone has yet coined a word describing a political philosophy that is okay with taking more than that. Perhaps it should be “Obamism.” Note that this is far more extreme than virtually anything Europe’s most brazen socialists have attempted since World War II.
Given the disincentives, many and probably most lower- and middle-income Americans will conclude that there’s no point in accepting promotions, working overtime, getting a second job, or attempting any other form of financial self-improvement (except perhaps under the table). They will thus end up stuck where they are. The remarkable income mobility which is so critical to long-term economic growth and prosperity and which has marked this great nation as so unique for centuries will become a distant memory.
Not coincidentally, the “haves” will remain the haves, which takes us back to Congressman Dingell’s statement about “control(ling) the population” and to the far left’s lust for a permanent perch in power without having to endure the “ordeal” of dissent. If ObamaCare is successfully installed, a demotivated population so dependent on government largesse for its very health and its mediocre but low-risk economic well-being will fiercely resist any attempt by those who love freedom and liberty to upset things in any way.
What Congress and Obama have imposed must be utterly repudiated and totally repealed. An America whose population still believes in the values of its Founders would remove from office anyone who voted for this tyrannical monstrosity — if not in November’s elections, shortly thereafter through impeachment. The question is: are we still that country?