Small Biz Health Care Daily: ObamaCare and Middle-Income Taxes

After two members of the Obama administration opened the door to raising taxes on middle-income earners to pay for the President’s health care plans, White House press secretary Robert Gibbs said on Monday: “The President’s clear commitment is not to raise taxes on those making less than $250,000 a year… The President was clear during the campaign about his commitment on not raising taxes on middle-class families. And I don’t think any economist would believe that in the environment that we’re in raising taxes on middle-class families would make any sense. And the President agrees.”

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council, responded:

“Mr. Gibbs is correct in noting that few economists would be in favor of raising taxes on middle-income earners in a recession. Unfortunately, President Obama already has done that to pay for another health care program, increasing the federal excise tax on a pack of cigarettes by 159 percent in order to expand the State Children’s Health Insurance Program (SCHIP). In addition, many economists would point out that it’s not a good idea to raise taxes on upper-income earners in a recession either, but the President has few qualms about that. As for the big plan to reform health care, while President Obama talks about reining in costs, government’s expanded role will only cause costs to explode. The Congressional Budget Office forecasts that an Obama-style health care plan would balloon the budget deficit by an additional $1 trillion over ten years. And that’s probably optimistic. One way or another, middle-income earners would have to pay.”