by EZRA KLEIN, Bloomberg
Is the Affordable Care Act really “the largest tax increase in the history of the world,” as Rush Limbaugh so grandiloquently put it? No. It’s not even the largest tax increase in the history of this country.
Or of the past 50 years. Or 20. It’s not even the biggest tax increase scheduled to take effect in the very near future. (That’s the expiration of the George W. Bush tax cuts slated for New Year’s Day.)
Typically, we estimate taxes over 10 years. Contrary to the claims of Republicans such as House Majority Leader Eric Cantor, who says the Affordable Care Act has “six years of benefits with 10 years of tax increases,” most of the law’s tax increases don’t kick in until the latter part of the decade. So a 10-year budget window can be misleading in the case of the Affordable Care Act.
Fortunately, in its 2010 Long-Term Budget Outlook, the Congressional Budget Office resolved this problem, estimating the size of the Affordable Care Act’s tax increase in the year 2020, by which point all the taxes will be fully in effect. So how big is it? One half of one percent of GDP. That’s about the size of Bill Clinton’s 1993 tax increase or George Bush’s 1991 tax increase, and much smaller than Ronald Reagan’s 1982 tax increase.
Still, it’s a big tax increase. The money, though, is not coming from the source that many suspect -- or even from one that Republicans necessarily oppose. [MORE]