The judicial decision to uphold all of the president’s healthcare subsidies may be very disappointing, but the economics of Obamacare are far worse than whatever constitutional mistakes have been committed by the Supreme Court.
The economics of Obamacare are very bad. The law is inflicting broad damage on job creation and new-business formation. It ruins job incentives by making it pay more not to work, thereby intensifying a labor shortage that is holding back growth and in turn lowering incomes and spending.
And across-the-board Obamacare tax increases are inflicting heavy punishment on investment — right when the U.S. economy desperately needs more capital as a way of solving a steep productivity decline.
Because of Obamacare, there’s an additional 0.9 percent Medicare tax on salaries and self-employment income, a 3.8 percent tax increase on capital gains and dividends, a cap on healthcare flexible spending accounts, a higher threshold for itemized medical-expense deductions, and a stiff penalty on employer reimbursements for individual employee health-policy premiums.
Each of these tax hikes is anti-growth and anti-job.