Affordable Care Act Does Not ‘Take Over’ Health Care Or Raise Taxes On Most Americans

PolitiFact: Affordable Care Act Is Not A “Takeover.” According to PolitiFact: “[T]he law increases regulation. But it greatly relies on the private sector to provide health care. Hospitals will not be taken over by the government, doctors will not become federal employees. The act relies on private insurers to compete and provide health care coverage to an expanded customer base. Employer-based coverage through private companies continues. The ‘government takeover of health care’ is a potent political charge that does not hold up under examination.” [PolitiFact.com, 6/16/12]

Affordable Care Act “Will Provide More Tax Relief Than Tax Burden” For Middle Class. According to the Washington Post fact checker Glenn Kessler: “The health law, if it works as the nonpartisan government analysts expect, will provide more tax relief than tax burden for middle-income Americans.” [WashingtonPost.com, 7/6/12]

FactCheck.org: “A Large Majority Of Americans Would Not See Any Direct Tax Increase From The Health Care Law.” According to FactCheck.org: “It’s certainly true that the health care law would raise taxes on some Americans, particularly those with higher incomes. The law includes a Medicare payroll tax of 0.9 percent on income over $200,000 for individuals or $250,000 for couples, and a 3.8 percent tax on investment income for those earning that much. The Joint Committee on Taxation estimated that the biggest chunk of revenue — $210.2 billion — comes from those taxes. There are other taxes in the health care law — including an excise tax on the manufacturers of certain medical devices and on indoor tanning services. The health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation‘s calculations. Republicans tend to add in fees on individuals who don’t obtain health insurance (which the Supreme Court now agrees can be considered taxes) and businesses that don’t provide it to bump that up to about $500 billion. Some taxes, such as those on medical devices, may or may not be passed on to consumers in the form of higher prices, but a large majority of Americans would not see any direct tax increase from the health care law.” [FactCheck.org, 6/28/12]

• Individual Penalty Payments “Tiny” Compared To President Obama’s Previous Tax Cuts. According to FactCheck.org, the increased revenue from penalty payments by individuals who do not obtain health insurance represents “a tiny future increase compared with the tax cuts Obama has already delivered, including an estimated $120 billion in 2012 alone from the 2 percentage point cut in payroll taxes.” [FactCheck.org, 5/17/12]

Affordable Care Act Includes Tax Credits For Millions Of Americans. According to Families USA: “We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion. The new tax credits will provide much-needed assistance to insured individuals and families who struggle harder each year to pay rising premiums, as well as to uninsured individuals and families who need help purchasing coverage that otherwise would be completely out of reach financially. Most of the families who will be eligible for the tax credits will be employed, many for small businesses, and will have incomes between two and four times poverty (between $44,100 and $88,200 for a family of four based on 2010 poverty guidelines).” [FamiliesUSA.org, September 2010]

“Where Did All The Jobs Go?” Millions Disappeared During The Recession…

Recession Officially Ran From December 2007 To June 2009, Making It The Longest Since World War II. From the National Bureau of Economic Research: “The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months. In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month.” [NBER.org, 9/20/10]

• Recession Resulted In 8.3 Million Job Losses. According to the Associated Press, “the Great Recession killed 8.3 million jobs, compared with 1.6 million lost in the 2001 recession.” [Associated Press via Yahoo! News, 5/4/12]

Bush Recession Was So Severe That Economy Was Still Shedding Over Three-Quarters Of A Million Jobs Per Month Through First Few Months Of President Obama’s Term. According to the Bureau of Labor Statistics, the economy shed 839,000 jobs in January 2009, 725,000 in February 2009, 787,000 in March 2009, and 802,000 in April 2009, for a four-month average of 788,250 lost jobs per month. [BLS.gov, accessed 5/3/12]

…But The Private Sector Has Added 4.5 Million Jobs In The Last 29 Months

Since The Recession Ended In June 2009, The Private Sector Has Added 3.3 Million Jobs While Public-Sector Employment Has Fallen By Over 640,000. According to the Bureau of Labor Statistics, there were 107,933,000 private-sector jobs in June 2009, and 111,317,000 private-sector jobs in July 2012, an increase of 3,384,000 jobs. The BLS also reports that there were 22,570,000 Americans working in the public sector in June 2009, and 21,928,000 working in the public sector in July 2012, a decrease of 642,000 jobs. The private-sector gains and public-sector losses add up to a total increase of 2,742,000 jobs.

The following chart shows the cumulative private-sector job gains and public-sector job losses since the recession officially ended in June 2009:

[BLS.gov, accessed 8/3/12; BLS.gov, accessed 8/3/12; NBER.org, 9/20/10]

• Conservative AEI: The Public Sector Is Shrinking, But Private-Sector Growth Is Above Average. From American Enterprise Institute scholar Mark J. Perry: “In the second quarter of 2012, ‘public sector GDP’ decreased -1.44%, and that was the eighth straight quarter of negative growth for total government spending, averaging -2.88% per quarter over the last two years. In contrast, there have been 12 consecutive quarters of positive growth for private sector GDP averaging 3.07% per quarter in the three years since the recession ended, which is slightly higher than the 2.8% average growth rate in private real GDP over the last 25 years.” [AEI-Ideas.org, 7/31/12]

• GOP-Favored “Government Downsizing” Has Been “A Drag” On Job Growth. From the Associated Press: “Conservative Republicans have long clamored for government downsizing. They’re starting to get it — by default. Crippled by plunging tax revenues, state and local governments have shed over a half million jobs since the recession began in December 2007. And, after adding jobs early in the downturn, the federal government is now cutting them as well. States cut 49,000 jobs over the past year and localities 210,000, according to an analysis of Labor Department statistics. There are 30,000 fewer federal workers now than a year ago — including 5,300 Postal Service jobs canceled last month. By contrast, private-sector jobs have increased by 1.6 million over the past 12 months. But the state, local and federal job losses have become a drag on efforts to nudge the nation’s unemployment rate down from its painfully high 9.1 percent.” [Associated Press, 10/25/11]

The Private Sector Has Added 4.5 Million Jobs Over 29 Consecutive Months Of Private-Sector Growth. The following chart shows the monthly change in private-sector jobs dating back to January 2008.

[BLS.gov, accessed 8/3/12; MSNBC.com, 8/3/12]

“Failed” Recovery Act Created Millions Of Jobs, Boosted GDP, And Cut Taxes

Recovery Act “Succeeded In…Protecting The Economy During The Worst Of The Recession.” From the Center on Budget and Policy Priorities: “A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 200,000 and 1.5 million jobs in March. In other words, between 200,000 and 1.5 million people employed in March owed their jobs to the Recovery Act. […] ARRA succeeded in its primary goal of protecting the economy during the worst of the recession. The CBO report finds that ARRA’s impact on jobs peaked in the third quarter of 2010, when up to 3.6 million people owed their jobs to the Recovery Act. Since then, the Act’s job impact has gradually declined as the economy recovers and certain provisions expire.” [CBPP.org, 5/29/12]

At Its Peak, Recovery Act Was Responsible For Up To 3.6 Million Jobs. According to the nonpartisan Congressional Budget Office:

CBO estimates that ARRAs [sic] policies had the following effects in the third quarter of calendar year 2010:

• They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
• Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
• Increased the number of people employed by between 1.4 million and 3.6 million, and
• Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers). [CBO.gov, 11/24/10]

Recovery Act Included $288 Billion In Tax Cuts. From PolitiFact: “Nearly a third of the cost of the stimulus, $288 billion, comes via tax breaks to individuals and businesses. The tax cuts include a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual. The tax cuts aren’t so much spending as money the government won’t get — so it can stay in the economy.” [PolitiFact.com, 2/17/10]

Brown Voted To Extend Tax Relief For First $200,000 Of Everyone’s Income – Not For Tax Hikes On Small Businesses

Crossroads GPS doesn’t provide a citation for the statement that “Sherrod Brown’s latest vote could mean tax hikes on the small businesses Ohio depends on to create jobs.” Similar claims have cited Brown’s vote in favor of the Middle Class Tax Cut Act  on July 25, 2012.

Brown Voted To Extend Bush Tax Cuts For Middle Class, End Them For “About 1.4 Percent Of U.S. Households” At Top Income Levels. From Businessweek: “The Senate’s vote to extend most George W. Bush-era tax cuts while letting them expire for top earners gave Democrats a political victory without resolving the stalemate over U.S. fiscal policy. The 51-48 vote yesterday, mostly along party lines, shifts the focus to the Republican-controlled House, where lawmakers plan to vote next week to extend the tax cuts for 2013 for taxpayers at all income levels. […] The bill passed yesterday would extend through 2013 the tax cuts for individual income up to $200,000 a year and income of married couples up to $250,000. Above those thresholds, taxpayers would face higher rates for ordinary income, capital gains and dividends. The result would be a tax increase averaging $35,451 for about 1.4 percent of U.S. households, according to the Tax Policy Center, a nonpartisan group in Washington. The tax increases for high earners would generate about $50 billion in 2013 to reduce the budget deficit. […] Republicans say no one’s taxes should rise in a weak economy and that the tax increase would fall especially hard on those who report business profits on their personal tax returns. Their plan would extend current income tax rates and estate tax rules through 2013. The Senate, on a 45-54 vote, defeated that proposal offered by Republicans as an amendment to the Democratic bill.” Brown voted for the Democratic bill and against the Republican amendment. [Businessweek, 7/26/12; S.Amdt. 2573, Vote #183, 7/25/12; S. 3412, Vote #184, 7/25/12]

Those In The Top Bracket Still Benefit From Middle-Income Tax Cuts. According to the Center on Budget and Policy Priorities:

Furthermore, as Figure 2 shows, under the proposal to allow tax cuts on income above $250,000 ($200,000 for single filers) to expire, taxpayers in the top two brackets would still keep sizeable tax cuts on the first $250,000 of their income ($200,000 for single filers).

[Center on Budget and Policy Priorities, 7/19/12]

Congressional Research Service: Allowing Tax Cuts For The Rich To Expire Will Reduce Deficits “Without Stifling The Economic Recovery.” According to Reuters: “Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. […] Republicans want the cuts continued for all income groups while Democrats favor letting them expire for the most affluent Americans. ‘If the economy is still weak, a temporary extension (of all the rates) will not harm the economy,’ despite adding to the deficit, the CRS report said, citing CRS economist Thomas Hungerford. But allowing the rates to rise just for the wealthy could help ‘reduce budget deficits in the short term without stifling the economic recovery.’” [Reuters, 7/19/12]

Few Top Income Taxpayers Are Actually “Small Businesses”

CBPP: “Only 2.5 Percent Of Small Business Owners Face The Top Two Rates.” According to the Center on Budget and Policy Priorities: “Allowing the top two marginal tax rates to return to pre-2001 levels as scheduled next year would affect very few small businesses, a recent Treasury Department study found.  The study shows that only 2.5 percent of small business owners face the top two rates.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]

• Conservatives Rely On Definition Of “Small Business” That Counts President Obama And Mitt Romney. According to the Center on Budget and Policy Priorities: “The claims that allowing the Bush tax cuts for high-income people to expire would seriously harm small businesses rest on an exceedingly broad, and misleading, definition of ‘small business.’ The definition is so broad, in fact, that under it, both President Obama and Governor Romney would count as small business owners — as would 237 of the nation’s 400 wealthiest people.” [Center on Budget and Policy Priorities, 7/19/12, internal citations removed]
• Conservative Definition Of “Small Businesses” Includes Multi-Billion-Dollar Corporations Like Bechtel And PricewaterhouseCoopers. According to the Center for American Progress: “‘That’s 750,000 small businesses in America, the most productive, the ones that are the most successful, getting hit by a tax increase on top of everything else that’s happened to them in the last 18 months of this administration,’ said Senate Minority Leader Mitch McConnell (R-KY). But McConnell’s number is only accurate if you take an incredibly expansive view of what constitutes a small business. Included in that 750,000 is the Bechtel Corporation, the largest engineering firm in the country. It is the fifth-largest privately owned company in the United States, posting gross revenue in 2008 of $31.4 billion. […] The auditing firm PricewaterhouseCoopers, which has operations in more than 150 countries, fits the bill as well.” [Center for American Progress, 10/21/10, emphasis added]
• Former Bush Economist Alan Viard: GOP’s Definition Of Small Businesses Is A “Fallacy.” As reported by the Washington Post: “Which is why Republicans continually define pass-through entities of all sizes as small businesses, a position [former Bush White House economist Alan] Viard called a ‘fallacy.’ ‘How can it be that 3 percent of owners are accounting for 50 percent of small business income? Those firms they’re owning can’t be all that small,’ Viard said. ‘And that’s true. They’re very large.’” [Washington Post, 9/17/10]

Joint Committee On Taxation: “3.5 Percent Of All Taxpayers With Net Positive Business Income” Fall Into Top Tax Bracket. According to the Joint Committee on Taxation: The staff of the Joint Committee on Taxation estimates that in 2013 approximately 940,000 taxpayers with net positive business income (3.5 percent of all taxpayers with net positive business income) will have marginal rates of 36 or 39.6 percent under the president’s proposal, and that 53 percent of the approximately $1.3 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent. [Joint Committee On Taxation, 6/18/12]