Author Danny Vinik

Democrat Support for Obamacare Jumps

Danny Vinik Leave a comment

A lot of political reporters have commented on the Kaiser Family Foundation poll released today with numbers in the aftermath of the Supreme Court upholding the Affordable Care Act. Overall, Americans seem to want the opponents of the law to move on and support for the law has moved slightly in the Democrats’ favor, though it really has not changed much.

There was one graph that immediately jumped out at me though:


Democrats who have a very favorable opinion of the bill has skyrocketed from before the health care decision until afterwards, up from 31 percent to 47%. In fact, Democrats have never had a more favorable opinion of the bill. What does this mean? Probably nothing, the economy will be the main focus come November and health care won’t have an affect, but it has to be nice for Obama to finally see some appreciation from Democrats for his health care bill.

The poll also finds that the decision makes Democrats 18 percent more likely to vote and Republicans 31 percent. I would imagine that the rise in Democrats who have a very favorable opinion of the law would make them more likely to vote, but conservative hatred of the law is a stronger driver of votes than liberal approval of it. I will be highly surprised if it actually matters in the presidential election, but interesting nonetheless (especially on a slow news day).

Is Obamacare the Biggest Tax Increase in History? No

Danny Vinik Leave a comment

Nope. Not at all. Kevin Drum debunks this one:

“There have been 15 tax increases of significant size since 1950, and Jerry Tempalski, a tax analyst in the Treasury Department, has estimated the size of all of them as a percentage of GDP.  Tempalski hasn’t estimated the eventual size of ACA, but PolitiFact took a crack at it using the same methodology, and they figure that ACA amounts to a tax increase of 0.49% of GDP seven years from now. That places it tenth on the list.”

And he supplies the table to the right as well.

Since the mandate is now defined as a tax, Obamacare does raise (optional) taxes. The President can no longer say otherwise. Politifact has dug up the transcript of an interview Obama did with ABC’s George Stephanopoulous and it’s good stuff:

Stephanopoulos: Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?

Obama: Well, hold on a second, George. Here — here’s what’s happening. You and I are both paying $900, on average — our families — in higher premiums because of uncompensated care. Now what I’ve said is that if you can’t afford health insurance, you certainly shouldn’t be punished for that. That’s just piling on. If, on the other hand, we’re giving tax credits, we’ve set up an exchange, you are now part of a big pool, we’ve driven down the costs, we’ve done everything we can and you actually can afford health insurance, but you’ve just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that’s…

Stephanopoulos: That may be, but it’s still a tax increase.

Obama: No. That’s not true, George. The — for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase. People say to themselves, that is a fair way to make sure that if you hit my car, that I’m not covering all the costs.

Obama is right about everything here except declaring it not a tax increase. It is a tax increase, but it is a tax increase to correct a market failure. The President points the market failure out, but does not acknowledge that the way to correct it is through the tax. When Obama says “take a responsibility,” he means that individuals can either buy insurance or face a tax increase (which, in reality, is just the withholding of potential tax refunds). The reason for the tax seems to have been lost in the discussion of the Supreme Court’s ruling this past week, but it’s important to remember why it’s there. Without it, only unhealthy individuals would sign up for insurance and insurance companies, who can no longer discriminate based on pre-existing conditions, would get sucked into the “death spiral.”

By the way, check out what tax increase is fifth on the list: Reagan’s tax in 1982.

Avs Get Great Deal with Matt Duchene

Danny Vinik 1 Comment

The Colorado Avalanche have just resigned center Matt Duchene to a two-year, $7 million deal, a great deal for the team. The Avs have done a good job locking up their players this offseason, having already agreed to deals with forward David Jones, defenseman Matt Hunwick and captain Milan Hejduk. But this deal is the best they’ve made so far. Just look at Duchene’s stats so far in his career:Due to knee and ankle injuries, Duchene played in just 58 games while tallying 14 goals and 14 assists. While those stats make the deal seem like fair value, Duchene’s first two years in the league demonstrate his true worth. The third-overall pick in the 2009 draft tallied 51 goals and 122 points in the two years while missing just three games.

The best part for Colorado: Duchene is just 21 years old. That means he still is going to improve quite a bit. There’s no reason that he cannot score 35 goals and dish out 50 assists each season for the next few years. If Duchene had had those stats this year, he would have been fourth in the league in points and tied for 11th in goals. That’s an entirely realistic target for such a young player and yet Colorado is paying just $3.5 million per season for him. The injuries are certainly worrisome, but if Duchene stays on the ice, this will be a great deal for the Avs.