Wednesday, January 26, 2011

More Administration Flip-Flopping on Taxes and the Individual Mandate

Testifying before the Ways and Means Committee, CEA Chairman Austan Goolsbee just rejected the idea that the individual mandate was a tax increase on the middle class.  That may come as a surprise to many within the Administration, as the Justice Department is defending the mandate as a tax increase, even though President Obama in September 2009 made comments “absolutely” rejecting the mandate as a tax increase.  The Administration’s constant reversals on this issue have drawn attention from the courts as well, as a judge in Virginia asked the Justice Department whether the President was “trying to deceive the people” by claiming the mandate wasn’t a tax increase in 2009, only to assert in the courts that the mandate is a constitutional tax after the law was passed.

Mr. Goolsbee also made the argument that the other provisions in the health care law – such as the new Flexible Spending Account restrictions – don’t in reality violate the President’s promise because they “aren’t in the normal form” for tax increases.  He also claimed that “the totality of” the law means individuals will benefit, because health costs will do down.  However, the non-partisan Medicare actuary found that costs will INCREASE by more than $310 billion as a result of the measure – meaning Mr. Goolsbee’s stated rationale for defending the tax increases doesn’t hold water.

And in case you’re curious, the full list of tax increases under the law – including those that apply to individuals with incomes under $250,000 – is available here.