5 reasons why taxing capital to fund healthcare is nuts

Darleen has the image,

James Pethokoukis has the reasons,
Don’t fund healthcare by taxing capital

Washington will have difficulty producing a stranger bit of public policy than raising investment taxes to pay for healthcare reform. Remember, the consensus critique of the U.S economy is that it’s been plagued by too much consumption and debt. O.K., fine. So the answer is penalizing savings and investment? Really? Pure Bizarro economics for that and a number of other reasons:

The five items are,
1) It will hit the middle-class eventually.
2) It is an expensive way to raise government revenue.
3) It creates an accidental industrial policy.
4) It moves the tax code in the wrong direction.
5) It puts politics over sound policy.
For an explanation of each item, go read the post.

Betsy points out,

If you believed all the sweet words from the Democrats about how only good things will come from their health care proposals, think again. This bill has provisions that will stunt job growth.

According to Heritage, under the reconciliation bill, if Company A lays off an employee with a working spouse, this could generate a $3,000 tax penalty for the other spouse’s employer, unless Company B also lays off the other spouse.

We’re not making this up. This byzantine legislation is a job-killer that will destroy small business, the major creator of new jobs. Some 77,000 businesses in the U.S. have 50 to 200 workers that could face the $2,000-per-employee tax penalty. An additional 116,000 businesses have 35 to 49 workers.

This nonsense will stunt economic growth and worsen the economic downturn by actually providing financial incentives to not hire people. It’s not worth the trouble. Businesses that might have expanded will stop at 49 employees. Those already considered a “large” business will face a minefield of taxes and penalties due in some cases to events beyond their control.

Of course, you need to understand unintended consequences and the Democrats are betting that people won’t see the link between cause and effect.

The same article Betsy links to states,

That $3,000 penalty is on top of the $2,000-per-worker penalty for all workers beyond the first 30 for such companies not offering a “qualified” health plan or paying 60% of employee health premiums. Such companies would be faced with a $3,000 penalty for hiring a single parent, the very kind of person desperately in need of employment.

Nancy is doing it “for the children.”