The fiscal train wreck that Obamacare and other health care entitlements will inevitably cause is quickly approaching—and no amount of tax increases can save us from the crash.
Although the “Eat the Rich” and “Tax the one percent” way of thinking is currently in vogue, these catchy sound-bites remain nothing more than pithy slogans. Not only can the “rich” not pay it off, but if Congress does not act, the rich, the middle class, and the poor together will not be able to cover the tab.
Making matters worse, taxes are scheduled to increase significantly on earners in all income brackets – hitting the poorest Americans hardest. Yet even if these draconian tax hikes come to pass, America’s vexing fiscal issues will remain.
Higher taxes in the coming years are the result of laws already on the books and will occur without any action from Congress. Because a large portion of the tax code is not indexed for inflation, more and more people will be pushed into higher brackets. This means that a greater share of people’s incomes will go to taxes, further eroding people’s purchasing power– despite nominal increases in compensation. The poor will be impacted disproportionally as fewer and fewer are eligible for the Earned Income Tax Credit. Obamacare will also pile on tax hikes on the nation’s wealthiest citizens.
Yet despite forecasts projecting the largest tax revenue stream in living memory over the next couple decades, the nonpartisan Congressional Budget Office (CBO) says we will still be unable to control the growing debt. Obamacare and other health care entitlements are literally putting a chokehold on the American economy and real change is desperately needed in order to avert complete financial catastrophe.