Monday, July 02, 2012

Obamacare and Bankruptcy

As disappointing as last Thursday’s SCOTUS ruling was, I have always recognized that if there is any Constitutional limit on Congress’s ability to use the tax code to incentivize some personal decisions and discourage others, the case law hadn’t gotten around to finding it yet.

The legal problem is that the legislation John Roberts ruled on isn’t the legislation Congress actually passed.  Substantively, however, I am less concerned with the Individual Mandate than the implications for national solvency.

Case in point:

On June 7, 2012, the House passed the Healthcare Cost Reduction Act (HR 436), a bill I [Congressman Mike Turner] cosponsored to repeal the 2.3 percent excise tax on medical devices enacted as part of President Obama's healthcare law. This legislation, which passed the House with strong bipartisan support, is similar to a bill I introduced last year (HR 1310) to repeal the tax on medical devices used by first responders.

Beginning in 2013, a 2.3 percent excise tax will be imposed on the sale of life-saving, life-enhancing medical devices by manufacturers, providers, and importers. We have all heard of a cradle-to-grave government—well, this is a cradle-to-grave tax! Every item used to provide care, from the incubators used to care for prematurely born children to the rollers which move caskets, would be subject to this tax.

More anti-tax boilerplate follows.

I don’t have an opinion one way or another on excise taxes, except to say that PPACA is chock-a-block with little revenue boosters like this that are predictably – in fact, ceaselessly predicted by Megan McArdle and others – falling by the wayside.  Last I looked in on it, the cost of Obamacare had nearly doubled from its original projections.  And the march towards national bankruptcy continues unabated . . . .

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