Obamacare Means Your Marginal Tax Rate Is Going Up
- Published: 01 October 2013
On January 1, 2014, the country's producers will step into a shiny new relationship with their federal government. If you hire, work and produce taxable income, the Affordable Health Care program will force you to pay full price for health care, while creating generous discounts for practically everyone else.
Advocates of redistribution continue to try to perpetuate the myth that, as long as tax rates are less than 100%, business operates as usual because receiving even 1% of your compensation is better than getting no compensation at all. This makes absolutely no sense to anybody but the people collecting your tax money and the people getting your tax money.
As the government levies greater employment taxes on businesses, collects more taxes from families with high income, and provides subsidies to families with low income, there will be a reduction in the incentive to work. The harder you work, the more you pay out in taxes and the less you retain for you and your family.
Even if full government confiscation were the only way that taxes could depress the labor market, raising the average tax rate to 50% and above involves millions of people with rates far higher. Folks that promote Obamacare and generally bigger government have not yet acknowledged that redistribution absolutely requires an increase in the marginal tax rate and contracts the labor market. Here is a great article by Casy Mulligan of the Wall Street Journal that quantifies some of this.
Are you "tax-ready" for the Affordable Health Care act? Not sure? We can help. Contact us and ask for our Tax Law team.
- The Tax Law Team
Rogers, Sheffield & Campbell, LLP