Giant Tax Increase Or Cynical Nonsense?

Twenty-four hours after the US Supreme Court handed down their ruling on the constitutionality of the Patient Protection & Affordable Care Act, or ObamaCare, and the Republican Party’s initial line of attack against the new reality is starting to emerge. (1) Push, at every opportunity, the line that ObamaCare represents a massive tax increase for all Americans, and (2) sow fear that the IRS is poised to start hammering at the doors of the uninsured (a group for which the GOP seems to have suddenly developed strong and protective feelings of filial loyalty) with threats of wage garnishment or prison.

As this piece from Politico, discussing Romney’s likely response to the SCOTUS decision, says:

To the Romney campaign, the ruling left the ACA looking like a richer target than ever: The justices upheld the law — leaving its unpopular provisions intact as a campaign issue — but did so on the grounds that the mandate requiring all Americans to purchase insurance is a “tax,” a traditionally easy target for Republicans.

One strategist aligned with Romney called that “the best-case scenario of it being upheld: It’s upheld as nothing but a massive tax hike.”

“President Obama just turned GOP intensity amps up to 11,” the strategist said.

And in this article, the new line of argument is laid bare:

Everyone from tea party stars to establishmentarians to possible 2016 presidential contenders seized on the tax language in the Supreme Court’s 5-4 majority opinion, which included Chief Justice John Roberts.

“‘Obamacare’ raises taxes on the American people by approximately $500 billion,” said Mitt Romney, the presumptive Republican presidential nominee. “‘Obamacare’ cuts Medicare by approximately $500 billion. And even with those cuts, and tax increases, ‘Obamacare’ adds trillions to our deficits and to our national debt and pushes those obligations on to coming generations.”

Unfortunately for the GOP, there is precious little evidence to support either of their new assertions. My stance on the Republican Party’s new line of argument against ObamaCare is this:

  • If you are a hard-pressed middle class American doing the ‘right’ thing and keeping health insurance either individually or through your employer, exactly how does ObamaCare represent a tax increase for you? You don’t have to pay the ‘fine’, and your insurance premiums should actually start to fall as more healthy people are brought into the insurance pool.
  • If you are doing the ‘wrong’ thing and not buying health insurance when you could afford to, then surely you are a parasite within the system, clogging up emergency rooms when your untreated conditions come to a head, and leaving yourself unable to pay any unplanned medical expenses that you incur, forcing insurance companies to charge higher premiums to everyone. That’s not exactly responsible citizenry, so are Republicans really going to act aghast in horror that this group of people will have to pay a fine, or a ‘tax’ as interpreted by the Supreme Court, to compensate for the negative externality that they are creating?
  • If you are doing the ‘wrong’ thing and not buying health insurance because you cannot afford to, the government will help you to buy it in the private marketplace, as I understand it using funds raised from fining people with the ability to pay who choose not to.

To me, the embryonic Republican response to defeat at the Supreme Court appears to be dumbed-down politics at its worst. Having had their well-worn argument that ObamaCare is a gross constitutional overreach taken away, they have reverted to the tax increase argument, not because there is any compelling evidence to support it but because of a semantic technicality in the language of the Supreme Court’s ruling. Republicans love to be on the side of defending people against higher taxes – a very worthy stance, and one which I share – but are they really going in to bat now exclusively for people who freely choose not to purchase health insurance, and burden everyone else with the costs of that attendant risk? I think I would almost rather be known for advocating tax cuts just for billionnaires.

It is too early yet to see how this new GOP line of attack will play in the media and the opinion polls, but given the fact that I managed to deconstruct it on my blog in less than ten minutes, I do hope (and sadly it is hope rather than expect) that proponents of the Affordable Care Act will be able to do so with even more effectiveness, and show this sudden Republican concern about ‘raising taxes’ on the willingly uninsured to be the cynical nonsense that it is.