Obamacare — April 18, 2014 at 5:32 pm

Why the super rich hate Obamacare and will never let the debate die


Republicans will keep fighting this law the way they fight Medicare, Social Security and ‘myths’ like climate change, evolution and the female orgasm

ObamacareConservatives combusted all over America on Thursday when President Obama punctuated his announcement that 8 million people had signed up through coverage in health care exchanges created by the Affordable Care Act by saying that the Obamacare debate is “over.”

“The Debate Will Be Over When the American People Say It’s Over,” The Weekly Standard‘s Jeffery A. Anderson blogged, the next morning.

Well, if that’s the case, the debate was over before we even knew that 7 million Americans had signed up for insurance in the Obamacare exchanges.

On March 26, 2014, the Kaiser Family Foundation released its monthly polling that in addition to finding approval of the law rising, especially among the uninsured, 53 percent of Americans are “tired of hearing about the debate over the ACA and want the country to focus more on other issues.”

The law isn’t yet popular but it’s far more popular than the idea of repealing it.

But you know that this debate will never go away.

And those who seek to repeal the law will have unlimited funding because this law actually does something that is almost impossible to do in America: It raises taxes on the super rich.

The New York Times‘ Floyd Noris explains:

Under the Affordable Care Act passed in 2010, the Medicare payroll tax increased by 0.9 percentage point in 2013, but only for couples earning more than $250,000 and unmarried taxpayers earning more than $200,000. And unlike the old Medicare tax, the increase applies to investment income, not just to wages.More important was an additional 3.8 percent Medicare tax on “net investment income” for those couples earning more than $250,000. That includes long-term capital gains and qualified dividends on stock, income that until now was taxed at a maximum rate of just 15 percent. But it also includes other income that had been taxed at the same rate as earned income, including rent, royalties, interest and short-term capital gains.

That tax affects a tiny minority of taxpayers; in 2011, 98 percent of tax returns reported adjusted gross income of less than $250,000. But the tax may help to explain the intensity of the anger felt by some people campaigning to repeal President Obama’s Affordable Care Act, which subsidizes health insurance premiums for people who could not previously afford to buy insurance.

Thanks to Obamacare, super-rich Americans, who earn over $10 million a year and presumably have to wear a utility belt, now have to pay a tax rate closer to the merely very rich who earn between $500,000 and $10 million a year.

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Not all of the super rich object to the notion that their tax rates should be higher, of course. Warren Buffett notably called for Congress to stop coddling the super-rich. But the more Americans earn, the more they tend to report that they paying too much to the federal government.

That new taxes hitting the richest .01 percent are a little-noticed but hugely significant aspect of Obamacare, especially given two seismic events shaping our politics.

Thomas Piketty’s new book Capital explains how the enormous benefits the super rich enjoy from outsized returns on capital investment have led to a second Gilded Age, where inequality will only increase as a small number rich families increasingly dominate the economy.

This massive transfer of wealth to the richest comes with a similar transfer of political power that has been exacerbated in recent years by the Roberts Court.

The Citizens United decision followed by its recent McCutcheon decision, which will likely be followed by another decision eliminating all limits on campaign donations, enables this same small number of families to donate more in one election cycle than most Americans will earn in their whole life. And a recent study found that even before this decision America was already tending toward oligarchy.

The capture of our economy and politics by a few exorbitantly rich families makes it increasingly make it impossible to do what Obamacare did, which was levy new taxes on the super rich. Piketty suggests taxes like these — ideally enacted internationally to prevent tax avoidance — are the only hope for stemming our rampant inequality.

Health care reform is the greatest victory for the middle class since the 1960s for a variety of reasons, including ending discrimination against people with pre-existing conditions, expanding Medicaid and forcing insurers to spend at least 80 percent of your premiums on care.

But the reason the right hates Obamacare most is why we should be most proud of it: In the name of expanding health insurance to millions, it makes an attempt to confront the central issue of our time: the hijacking of our economy by the super rich.

[Image Will O’Neill | Flickr]