September 28, 2009
Even as unemployment approaches 10 percent nationwide, a recent Heritage Foundation analysis found that House Democrats' government takeover of health care (H.R. 3200) would demolish or destroy hundreds of thousands more jobs and lead to further economic stagnation:
- The Center for Data Analysis model of the economic effects of the $534 billion surtax imposed in H.R. 3200 resulted in hundreds of thousands of job losses-nearly half a million, to be precise. The model found that in 2019, employment levels would be lower by 452,000 jobs than under current law.
- By discouraging high-income workers-the majority of whom are small businesses-from making additional investments that add value to their enterprises, the surtax would result in lower economic growth-an average of $46.7 billion per year in lost GDP over the next decade, with those numbers growing until reaching $68.2 billion in 2019.
- The lower growth and fewer jobs created by the surtax would also affect the pockets of millions of all Americans. Specifically, the analysis found that disposable incomes for a family of four would be reduced by $995 in 2019 when compared to current projections if the surtax were to become law. Some may also note that the lower levels of disposable income for all families as a result of the surtax on certain high-income individuals could be viewed as violating the President's "firm pledge" that no one with an income under $250,000 would face tax increases.
- The Heritage analysis did not include the hundreds of billions in new taxes imposed beyond the surtax-including more than $200 billion in higher taxes associated with the employer mandate and $29 billion in taxes on individuals who cannot afford to purchase government-mandated health insurance.
- Other independent studies have confirmed the impact of the bill's proposed new tax on jobs-i.e., employer mandates. For instance, the Congressional Budget Office noted that, "a pay-or-play provision could reduce the hiring of low-wage workers, whose wages could not fall by the full cost of...a substantial pay-or-play fee if they were close to the minimum wage." Harvard Professor Kate Baicker has also published an analysis demonstrating that at least 5.5 million low-wage workers would be "at substantial risk of unemployment" due to new mandates on employers-and that minority workers were twice as likely to lose their jobs as their white counterparts as a result.
At a time when unemployment stands at a 26-year high-and with job losses still rising-many may use these studies as further confirmation that by imposing more than $800 billion in tax increases, H.R. 3200 would cause additional damage to the American economy-above and beyond those created by the government takeover of health care which the legislation would create.
For additional information, contact:
The House Republican Conference Policy Office