Wednesday, September 29, 2010

InsureBlog: Another ObamaCare© Myth Debunked

"ObamaCare imposes a tax on the sale of your primary residence of 3.8 percent."  I have heard this myth many times, often in conservative "grassroots" environments, and was planning to debunk it today.  I guess I'm not the only one who was hearing it.  Hat tip to the good folks at the InsureBlog, who note that there is enough (rotten) read meat in ObamaCare that we should not have to make things like this up.

InsureBlog points us to the Tax Foundation's debunking of this myth.  As I suspected, this derives from a misunderstanding of the actual tax hike, which is a newly increased Medicare tax of 3.8 percent on households with incomes of $250,000 or more.

The real harm that this tax will do to our nation's prosperity is not that the government will skin you when you sell your home.  It is that the higher rate is not only on salary or other labor income, but on capital gains and other types of investment income.  This will inhibit capital formation and pull down economic growth.

According to Stephen J. Entin and colleagues at the Institute for Research on the Economics of Taxation (IRET), this Medicare surtax will reduce GDP growth by 1.3 percent annually, and bring about reduced wages.

1 comment:

Henry Stern, LUTCF, CBC said...

Thanks, John, for the link-love!


It's true: there's a LOT to dislike in ObamaCare© without having to fabricate problems.

And I'd still ove some CongressCritter toexplain the connection between health care and home sales.