Surprise: Democrat Health Care Bill Passed Last Night Doesn’t Index For Inflation
Why is that important? Because it results in tax-bracket creep.
Inflation is when, for various reason, the purchasing power of your money decreases. The amount of money you earn might stay the same, but the amount of stuff you can buy with that money decreases. Often taxes are indexed for inflation so that the rate your taxed stays relative to the real value of your money. But the Democrat health care bill passed last night ends that, at least partially:
All of those twentysomethings who voted for Barack Obama last year are about to experience the change they haven’t been waiting for: the return of income tax bracket creep. Buried in Nancy Pelosi’s health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren’t real.
In order to raise enough money to make their plan look like it won’t add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not offering health insurance.
So why is this important? Because it essentially means that what you pay in taxes will gradually go up over time without the politicians actually having to pass tax hikes and suffer the political consequences of them.
Sneaky? Dishonest? Fundamentally wrong for the economic health of our country? All that and more.
