And across-the-board Obamacare tax increases are inflicting heavy punishment on investment — right when the U.S. economy desperately needs more capital as a way of solving a steep productivity decline.
Because of Obamacare, there’s an additional 0.9 percent Medicare tax on salaries and self-employment income, a 3.8 percent tax increase on capital gains and dividends, a cap on health-care flexible spending accounts, a higher threshold for itemized medical-expense deductions, and a stiff penalty on employer reimbursements for individual employee health-policy premiums.
Each of these tax hikes is anti-growth and anti-job.
There is so much talk about “secular stagnation,” inequality, and stagnant wages these days. But there’s little talk about the negative economic impact of Obamacare. It’s a much bigger story than Supreme Court jurisprudence.
A couple of examples.
First, there’s the problem of the 49ers and the 29ers. The business mandates and penalties imposed by Obamacare when small firms hire a 50th employee or ask for a 30-hour workweek are so high that some firms are opting to hold employment to 49 and hours worked to 29. Lower employment and fewer hours worked are a double death knell for growth.
The BLS sheds light on this: Although part-time work has fallen during the recovery, from around 9 million to 7 million, it hovered around 4 million during the prior recovery. And part-time employment, which as a share of total employment peaked at around 20 percent in 2010 and has slipped to about 19 percent, hovered around 17 percent during most of the prior expansion. Obamacare?
Everybody is complaining about the low labor-force participation rate and the equally stubborn reduction in the employment-to-population rate. But why are we surprised? Obamacare is effectively paying people not to work.
University of Chicago economist Casey Mulligan argues that Obamacare disincentives will reduce full-time equivalent workers by about 4 million principally because it
Originally appeared at: http://davidstockmanscontracorner.com/obamacare-economics-worse-than-the-supremes/
Obamacare Economics—-Worse Than The Supremes is a story from: BitcoinWarrior.net