Pelosi’s Tax on Labor

It's 10.5%. That's 8% from the employer; 2.5% from the employee and it will come dollar-for-dollar out of the pockets of workers. As the Wall Street Journal noted yesterday:

Cornell economists Richard Burkhauser and Kosali Simon predicted in a 2007 National Bureau of Economic Research study that a payroll tax increase of about this magnitude plus the recent minimum wage increase will translate into hundreds of thousands of lost jobs for those with low wages.

To make matters worse, many workers and firms would have to pay the Pelosi tax even if the employer already provides health insurance. That's because the House bill requires firms to pay at least 72.5% of health-insurance premiums for individual workers and 65% for families in order to avoid the tax. A Kaiser Family Foundation survey in 2008 found that about three in five small businesses fail to meet the Pelosi test and will have to pay the tax. In these instances, the businesses will have every incentive simply to drop their coverage.

Comments (8)

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  1. Bruce says:

    This is the same person who told us health care reform would be funded by taxing the rich? Rich like she and her husband?

  2. Tom H. says:

    Unbelievable that these people think they can get away with trying to convince workers they aren’t being taxed by this new health reform bill. The workers are going to be taxed rigth out of a job.

  3. Greg says:

    A 10.5% tax right in the middle of the worst economic downturn since the Great Depression? This is insanity.

  4. Devon Herrick says:

    Over time the availability of consumer driven health plans might diminish if everyone choosing a low-cost, high-deductible health plan had to pay a penalty equal to 2.5% of payroll. The penalty would make selecting a non-conforming health plan so costly as to make the plans unmarketable. This tax would reduce choice and force workers to cover the cost.

  5. Freedom says:

    I see no one is talking about what’s in the rest of the bill. If they okay this bill, we can kiss freedom and libery away!!! Why hasn’t anyone mentioned this?

  6. Mike says:

    We need to say to those morons in Washington, that you can dream up all the penalties that you want, but we will not pay one of them! This is America, and we are Americans, and will not stand for being threatened by our elected officials! This President, and this Administration have to go! Impeach!!

  7. Lynne says:

    Who is looking into what the pharmacuticals are going to get out of this? They should be up in arms about this why aren’t they? Is it because they are working hand and glove with the goverment?

  8. Larry says:

    Will the President and our Congress be subject to the same system? The answer is NO. Will elected officials from each state have some sort of immunitity? The answer is probably, yes. Where does the immunitity stop or start? Favortism will run amock.