Sunday, December 28, 2014

The ACA Cadillac Tax Rabbit Hole

“The Cadillac Tax is supposed to raise $80 billion over ten years to finance the expansion of health coverage.”

“The $80 billion of tax revenues will never appear. Companies as well as government entities will limit their medical insurance plans to the "predetermined thresholds". It is difficult to imagine virtually any entity continuing with any plan that results in an Obamacare Cadillac Tax.” - Kill the Obamacare Cadillac Tax Now, Hank Adler, 12/27/2014

-Upon Further Review-

If the $80 billion in tax revenue never occurs through tax avoidance, and the tax revenue was a component of the financing of ACA, then either a deficit occurs, government supplied items of another variety are reduced, revenue must be raised from another source (the other revenue source can only come from another set of taxpayers) -or- a combination of increased deficit, reduced government supplied items of another variety and increased tax upon some taxpayer group.

Not only does the tax revenue not appear due to tax avoidance, the Cadillac plans scrapped mean those individuals currently with the Cadillac plan must now have less-than a Cadillac plan (a less generous plan to avoid the tax) meaning those individuals absorb more health-care expense than under any previous Cadillac plan they were enrolled in.

The final result being zero tax revenue raised for ACA and more health-care expense for the individual. Judging intentions is always a mistake. Judging this particular lose-lose result might be more enlightening.

Link to the entire article appears below:


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