Many have already felt the pain of Obamacare’s impact on their health insurance coverage and medical care, but that’s only half the story. The other half is the negative, long-term impact Obamacare has on jobs and the opportunity for personal career advancement, as University of Chicago economics professor Casey Mulligan explains in the November Imprimis.
The key is Obamacare’s “tax distortions,” i.e., those changes in behavior on the part of businesses and households for the purposes of reducing their costs (tax burdens) or increasing their subsidies (tax benefits). These tax distortions “create all kinds of productivity problems and will have visible and permanent effects on the economy.”
Obamacare effectively creates three new hidden taxes on full-time employment and business expansion via the employer mandate and the federal premium subsidies:
- Since the employer mandate applies to full-time employment, Obamacare effectively penalizes (or taxes) employers who offer full-time employment to workers and rewards employers who offer part-time employment to workers.
- Since the employer mandate applies only to employer with 50 or more employees, Obamacare effectively discourages (or taxes) businesses that grow and expand, hurting employees who would have advanced financially as a small business grew into a larger, more profitable business.
- Since state exchange premium subsidies (tax breaks) are progressive and based on worker earnings — the more a worker earns, the less he/she receives in government tax breaks — Obamacare effectively creates a new hidden tax on wages.
“In conclusion,” writes the author, “I can make you this promise: If you like your weak economy, you can keep your weak economy.”
Source: Effects of the Affordable Care Act on Economic Productivity, Casey Mulligan, Imprimis.