Obamacare repeal = huge tax cut for America’s wealthiest

Since one of my regular commenters who is normally pretty up on things missed this point, I figured it was worth emphasizing.  Not to mention, I’ve seen a few good posts elsewhere on the matter.  Jordan Weissman’s take captures the dynamic nicely:

Obamacare is a complicated law with lots of interlocking parts that make it tricky to understand. But one of the core, very simple things it did was raise taxes on the wealthy in order to fund subsidized health care for more Americans. Couples earning more than $250,000 saw a 0.9 percent increase in their top Medicare tax rate, as well as a new, 3.8 percent Mediare surtax on investment income.

If Republicans have their way and successfully repeal the Affordable Care Act, those two taxes will be toast—which will mean a substantial break for some of the country’s wealthiest families. The liberal Center on Budget and Policy Priorities estimates that millionaires would see 80 percent of the benefits from those tax reductions. Based on the most recent IRS data, the think tank roughly projects that the 400 highest income households—which earned an average of more than $300 million each in 2014—would see a $2.8 billion annual tax cut, worth about $7 million on average per filer. To put that in some perspective, that’s a smidge more than Obamacare is set to spend on insurance premium tax credits in the 20 smallest states and the District of Columbia…

Republicans cutting benefits for the working class and poor in order to fund tax cuts for the wealthy is a dog bites man story if there ever was one. But by repealing Obamacare’s sources of funding, the GOP is putting itself in a little bit of a bind. After all, any viable Republican replacement plan—should one actually ever come into existence, as promised—is going to presumably require some funding. Once Congress has dumped the Affordable Care Act’s taxes into the dustbin of fiscal history, however, a lot of Republicans may be nervous about raising taxes to fund their own proposal. What happens at that point? Your guess is good as mine.

Weissman is right, this is dog bites man.  But this is a really big dog with strong set of teeth.  And, it’s one of the reasons Republican politicians hate Obamacare– a core feature is a clear redistribution of wealth from America’s wealthiest to the poor and middle class.

The collapsing dimensions of American politics

What is that supposed to mean?  Well, first off, my apologies for being a pretty lame blogger lately.  Busy start to the semester and the busiest teaching schedule I’ve had in a while.  Also, so much I want to say about so many things that I kind of end up saying nothing at all.  I’ll try and be better.  Probably shorter posts, but more.  Can’t just put everything in quick hits.

Anyway, on to my point.  Some very smart political scientists have been mapping the votes of Congress on multiple dimensions for years with some interesting results.  Most, but far from all, of Congressional votes could historically be explained by the first, scope-of-government, left-right dimension.  We’ve now reached a point where most everything can be explained by a single dimension– Democrat vs. Republican, and that’s it.  And that’s not good.  From VoteView:

What we find alarming is the unprecedented collapse of the long-term structure of Congressional Voting during the past 20 years. [emphases mine] Contrary to what many scholars say when they cite our book, Congress: A Political-Economic History of Roll Call Voting (1997, New York: Oxford University Press), Poole and Rosenthal DO NOT CLAIM that voting in Congress is largely one-dimensional. Rather Poole and Rosenthal show that a two-dimensional dynamic spatial model is the best fitting model for Congresses 1 – 99.

What has happened in the past 20 years is that the second dimension of Congressional voting has slowly evaporated. As late as the 1990s the second dimension picked up differences within each of the parties over abortion, gun rights, and other social or lifestyle issues. For example, on the vexed issue of abortion each Party had a pro-choice and a pro-life faction. Hence, roll call votes on Abortion often cut through the parties along the second dimension. The same was true for gun control (see the spatial maps in this post). Hare and Poole show the second dimension disappearing in a variety of issue areas in this analysis.

The two figures below show that the extraordinary divisiveness that has marked American Politics since November 2000 has resulted in Congressional voting to collapse into a one dimensional near Parliamentary voting structure; that is, the parties are very unified as shown by Party Unity Scores. The first graph shows the correct classification for each House in 10, 2, and 1 dimensions using Optimal Classification. Note the dramatic convergence of all three measures during the past 20 years. This shows that almost every issue is voted along “liberal-conservative” (it is hard to make sense what this dimension means any more!) lines. Furthermore, no other period in American history shows this pattern.

Donald Trump will be the third consecutive President who is widely disliked by members of the opposite Party. Indeed, Trump’s personality coupled with the extraordinary party unity within each party will mean that American Politics will enter a phase that has never been seen before. We hope things do not melt down but we would not bet our mortgages on it!

Now, of course, this does not portend bad things, but it is certainly unprecedented, so we could have unprecedented bad outcomes in our politics.  Or, maybe things will be unprecedentedly good and America will be great again in no time!

 

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