Our headline is a quote from this post at The Astute Bloggers to whom we owe a hat tip. They’ve linked to several very good sites in their post and we urge you to visit them. ~CAJ
Another Charming Aspect of the ObamaCare Minefield
Repair_Man_Jack
RedState
6/16/2011
Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income, including the sale of single family homes, townhouses, co-ops, condominiums, and even rental income.
– Congressman Jeb Hensarling. (GOP.gov)
I would like to praise our President for his political courage and honesty. While running for office, Barack Obama flat-out told Joe the Plumber he intended to spread the wealth. I think he sincerely believes that this taxation would primarily effect the rich, improve America’s Gini Coefficient, and help pay for his gateway program to Single-Payer Federal healthcare known as ObamaCare.
Regrettably, this tax will not accomplish this laudable goal. Like a lot of the poorly-designed, economic programs of this administration, this program will destroy more wealth than it ever gets around to actually transferring. The negative externalities of this proposal will be legion. I will attempt to outline the ones that come to mind in the post below.
We start with the housing market. This is the most likely place for a sudden spike in liability for people who are not truly rich by historic standards. Eighteen US states had Median home sales prices of $223k or higher according to Trulia.com’s heat map. This implies that almost ½ of these sellers would have been taxed on their proceeds at 3.8%. This is particularly pernicious in areas such as Hawai’i and Washington, DC where even very modest and unassuming residences would trigger this sort of a tax.
Yet this only accounts for the 1st order effects of the taxation…
…Beyond the effect on the housing market, this also could increase the difficulty new businesses have in finding the best workforce to hire. One of America’s great strengths as a nation is the mobility of our labor capital. Put a 3.8% Escape Tax on the mobility of the American workforce and potential employers will have to pay more to recruit out-of-towners, facilitate offsite work collaboration through technology, or limit their recruiting to the commute range of their facility…
Read the whole thing at RedState.com
