Here is Paul Krugman’s answer in today’s New York Times:
Mainly, though, those insurance subsidies will cost money, and that money will, to an important extent, be raised through higher taxes on the 1 percent: tax increases that have, by the way, already taken effect.
Paying for health reform by taxing the rich was what Barack Obama promised when he was campaigning back in 2008. It’s also what Hillary Clinton said. In fact, I don’t think a single Democratic candidate for president even hinted that ordinary Americans would have to foot the bill. Ah, but now we get to the fine print. Courtesy of the Joint Tax Committee and the CBO:
- Of the $1.5 + trillion ObamaCare will cost over the next ten years, only about 20% will come from taxes on the rich.
- Almost half will come from cuts in Medicare spending, including $156 billion from the Medicare Advantage program (whose enrollees have below average incomes) and $145 billion from the DSH program (which funds medical care for people who can’t afford to pay their bills).
- Taxes on insurance, medical devices and even tanning solons fall on the whole population and probably in a regressive way.