Economy Alarm: Pelosi Runs Economy Into Hole, Keeps Digging
Pelosi Runs Economy Into Hole, Keeps Digging
Puts Cost of Trillion-Dollar Healthcare Takeover on Backs of Workers
Speaker Embraces Delusion that Healthcare Takeover, Tax Hike Will Create Jobs
“House Speaker Nancy Pelosi (D-Calif.) said that the health care bill ‘is a stimulus package…I do think the health care bill is a stimulus package. I do believe the energy bill was, (with the) creation of new green jobs, a jump start,’ Pelosi said on CNN’s ‘State of the Union.'” (Carrie Budoff Brown, “Pelosi: Health Bill is ‘Stimulus Package,’” Politico, 7/26/09)
Credibility Crash: Democrats to Put Healthcare Costs on Backs of Workers with Job-Killing Payroll Tax
Even many Democrats are revolting against Speaker Nancy Pelosi’s 5.4% income surtax to finance ObamaCare, but another tax in her House bill isn’t getting enough attention. To wit, the up to 10-percentage point payroll tax increase on workers and businesses that don’t provide health insurance. This should put to rest the illusion that no one making less than $250,000 in income will pay higher taxes.
To understand why, consider how the Pelosi jobs tax works. Under the House bill, firms with employee payroll of above $250,000 without a company health plan would pay a tax starting at 2% of wages per employee. That rate would quickly rise to 8% on firms with total payroll of $400,000 or more. A tax credit would help very small businesses adjust to the new costs, but even a firm with a handful of workers is likely to be subject to this payroll levy. As we went to press, Blue Dogs were taking credit for pushing those payroll amounts up to $500,000 and $750,0000, but those are still small employers.
So who bears the burden of this tax? The economic research is close to unanimous that a payroll tax is a tax on labor and is thus shouldered mostly if not entirely by workers. Employers merely collect the tax and then pass along its costs in lower wages or benefits. This is the view of the Democratic-controlled Congressional Budget Office, which advised on July 13: “If employers who did not offer health insurance were required to pay a fee, employee’s wages and other forms of compensation would generally decline by the amount of that fee from what they otherwise would have been.”
To put this in actual dollars, a worker earning, say, $70,000 a year could lose some $5,600 in take home pay to cover the costs of ObamaCare. And, by the way, this is in addition to the 2.5% tax that the individual worker would have to pay on gross income, if he doesn’t buy the high-priced health insurance that the government will mandate. In sum, that’s a near 10-percentage point tax on wages and salaries on top of the 15% that already hits workers to finance Medicare and Social Security.
Even Democrats are aware that his tax would come out of the wallets of the very workers they pretend to be helping, so they inserted a provision on page 147 of the bill prohibiting firms from cutting salaries to pay the tax. Thus they figure they can decree that wages cannot fall even as costs rise. Of course, all this means is that businesses would lay off some workers, or hire fewer new ones, or pay lower starting salaries or other benefits to the workers they do hire. (Wall Street Journal Editorial, “The Pelosi Job Tax,” 7/30/09)
To read the entire article, click here: http://online.wsj.com/article/SB10001424052970203609204574316183688201934.html
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