Is Obamacare The Largest Tax Ever?

A post at Mother Jones has been making the rounds on Facebook with the table to the left as the main point. To quote author Kevin Drum, “Democrats have long insisted that Obamacare’s penalty for not buying health insurance isn’t a tax, but on Thursday the Supreme Court upheld it on the grounds that it was a tax. J’accuse! Or, as America’s Bard of the Frozen North tweeted, “Obama lies, freedom dies.” This is so stupid it hurts.”

Yes Kevin, I agree. Disagreeing with the fact that the SCOTUS saved the bill on the basis that it is a tax is stupid indeed. The source of Drum’s angst is a Forbes articlethat says the following:

“And if both the premium and the penalty are considered a tax, the mandate becomes the largest tax increase in U.S. history. And that doesn’t include all of the other taxes imposed by the legislation.”

However, Drum does not provide the quote, nor does he properly analyze it. He omits the part in bold. He omits the numbers relating to the premium. His analysis is based on just the financial impact of the penalty, which I think is a mistake.

But let’s ignore that glaring mathematical error for the time being and stick with his main premise. Drum created this table to prove a point, to clearly show that Republicans are stupid for claiming that the tax is the largest tax in history. (The data came from this Treasury Department report.) If you compare the impact of Obamacare to previous large tax hits as a percentage of GDP, Drum is correct, this is not the largest tax increase in history.

But, if you look at the raw dollars of the deal, again using Drum’s numbers, the cost of Obamacare is $71.18 billion dollars. (0.49% x 2010 GDP of $14.526B). That would make it the largest tax increase ever. The second highest dollar amount in the list? Clinton’s 1993 tax increase of $33.34 billion, which is less than half of the Obama tax increase. Third would be GHW Bush and fourth Reagan.

But let’s take this further because this is not just about bashing flawed logic. It is about exposing the truth. There have been larger increases than Obamacare, and some of them were passed by Republican presidents. I think it is important to note that the vast majority of massive tax increases took place during Democratic leadership. Liberals are free t0 whine about how Conservatives hate this massively expensive government overreach. But let’s use this topic as yet another opportunity to point out how the left wants bigger government spending more money, as proven by their track record of instituting the largest taxes in our history.

The following charts should provide more transparency on the topic.

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