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Sunday, Apr 22, 2018
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Obamacare seriously redistributes income; will Americans shrug?

Some on the right are making more sad clucking noises about another unanticipated consequence of the Affordable Care Act, this one unearthed by economists working for a left-leaning Washington think tank, but The Right Stuff is not convinced this one is even a game-shaper, let alone a game-changer.

According to findings by the Brookings Institute, when fully in place in 2016, Obamacare will reduce the incomes of every American except those in the bottom 20 percent. Everyone else, including those with incomes as low as $25,000, will take a hit.

Indeed, taken as a percentage, those with lower middle-class incomes will notice larger reductions than those in the top half of the income strata. “In other words,” writes the Washington Examiner’s Byron York, “Obamacare is going to cost some of the very people it was designed to help.”

Indeed, by providing billions in subsidies, expanding Medicaid, cutting Medicare, fining — er, taxing — those who don’t purchase government-sanctioned coverage and levying new taxes (all of which, York notes, “will change how much income millions of Americans bring in each year”), Brookings finds “The ACA may do more to change the income distribution than any other recently enacted law.”

The bottom 10 percent will see a surge of 7.2 percent; the next 10 percent will enjoy a 5.3 percent bump. Everyone else gets docked between 0.3 (top earners) and 1.1 (lower middle class) percent.

Now, add this information to last week’s boat-rocking news from the Congressional Budget Office, which found that Obamacare’s work disincentives will shrink full-time toil by 2.5 million jobs by 2024 while encouraging those receiving Medicaid to shirk employment. The upshot: By every evolving measure, the ACA commits battery on the American ethos that being materially productive and self-reliant improves not only the individual but the country as a whole.

So, why do I doubt there will be any particular political blow-back against Democrats from the Brookings report? Because the percentages nipping the upper 80 percent are small compared to the preternatural generosity of most Americans, and also because Big Media can be counted on to highlight the tales of those treated favorably by Obamacare’s subsidies — tales that will encourage you to say, “And I helped.”

I don’t know what the number is that would cause a critical mass of your neighbors to reject Obamacare’s redistributive nature (and Art Laffer isn’t available to provide the appropriate curve), but 1 percent or less isn’t it.

Not that we ever should shrug at government’s capacity to take what able-bodied folks have earned and give it to other able-bodied folks, and I’m on board with anybody who wants to make the camel’s-nose-under-the-tent argument. But vigorous resistance to the creep of incrementalism remains, alas, a minority position.

That’s what our friends on the left always count on, and it hasn’t let them down yet.