This is the dirty little secret about Obamacare. It is a ticking time bomb as costs will continue to destroy the Middle Class over time. Like all things, Progressives accomplish this in a Progressive fashion. The frog does not jump out of the pan if you slowly turn up the heat.
When President Obama was selling his signature health care reform bill back in early 2010, he described it as the "largest middle-class tax cut for health care in history." The costs would be largely paid by taxing insurance companies "that stand to gain a lot of money and a lot of profits" and by making "sure that the wealthiest Americans pay their fair share on Medicare."
The press at the time picked up this theme. The New York Times, for example, called ObamaCare "the federal government's biggest attack on economic inequality since inequality began rising more than three decades ago."
But a closer examination finds that ObamaCare's three biggest taxes — a Medicare surcharge, the so-called Cadillac tax and an insurance premium fee — will increasingly hit the middle class because of how the law indexes them for inflation and medical costs.
The single largest tax hike in ObamaCare is the one that boosts the Medicare payroll tax rate to 3.8% on family incomes over $250,000, and extends that tax to their investment earnings.
Over the next decade, the Medicare surcharge will raise $318 billion, according to the Joint Committee on Taxation.
But these taxes, commonly described as targeting the rich, will soon hit middle-income families.
That's because the Democrats who wrote the law did not index the income thresholds for inflation. So more and more families will end up paying these "wealthy" taxes simply because they are getting cost-of-living increases — a phenomenon known as "bracket creep."
For example, in 20 years, families with a combined income of $155,000 in today's dollars will face those higher Medicare taxes, assuming the inflation rate is the same as it's been for the past two decades. Four decades from now, families earning as little as $83,000 in today's dollars will be paying those higher Medicare taxes.
Looked at another way, the number of people hit by ObamaCare's Medicare surcharge will double every 16 years, according to an analysis by the Americans for Tax Reform Foundation.
"Bracket creep will take place with the Medicare surtax, and it will quickly shift from a tax on 'the rich' (however nominally it achieves even that) to a tax on the bulk of American workers," noted the ATRF's Blake Seitz.
Annual revenues from this tax will more than double in a de cade, hitting $45.8 billion in 2023, according to the JCT, thanks in part to this bracket creep.