Filed under: Democrat Corruption, Domestic Policy, Economy, Health Care, Law, Politics, Regulation, Taxes | Tags: A New Tax on Premiums, An Unaffordable Mess, Job Destroying Stupidity
Just when people are learning about how much their new ObamaCare policy is actually going to cost them, comes news of a large new tax on small business, beginning January 1. If you thought, correctly, that Obama’s tax on medical devices and prescription drugs was, ill-informed, dumb, and ill-advised, this one caps them all. This is a tax on health insurance premiums that targets small business and individual markets.
IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.” About four out of five employers with more than 500 workers, and most union-negotiated health plans are self-insured so they don’t get taxed. Neither does insurance on behalf of “government entities,” such as original Medicare (but not privately-run Medicare Advantage. Confusing? Of course.
This selectivity means that the most gold-plated public, private and labor plans are exempt, and the tax burden falls on the poor saps who work for small businesses, the self-employed and individuals — the people who can least afford it.
The White House claims that the tab will be picked up by “deep-pocketed insurers.” Uh huh. The tax will “largely be passed through to consumers in the form of higher premiums” and “will ultimately raise insurance premiums by a corresponding amount,” according to the Congressional Budget Office. Former CBO director Douglas Holtz-Eakin says the tax will boost insurance costs by about 2% tp 2.5%. Consultant Oliver Wyman estimates the take will rise to as much as $500 per covered worker by the end of the decade.
Democrats don’t understand that business doesn’t pay taxes, they pass through that cost to consumers. They don’t understand that when the cost of doing business gets too high, they cut back on workers or dump coverage. Democrats do not understand how jobs are created, and every initiative dreamed up includes a job-destroying element. If you wonder why there has been no recovery — there it is. The research arm of the National Federation of Independent Business calculates that the higher cost of insurance will shrink hiring by 146,000 to 262,000 jobs over the next decade. They will also be encouraged to dump coverage and send their workers to the ObamaCare exchanges — which may be what was intended in the first place.
As Ms. Pelosi says, “It’s going to be a glorious thing.” Uh huh.