It’s well established that the inhabitants of blue states send more money to Washington in federal taxes than they get back from Washington in the form of Medicare, Medicaid, Social Security, and other federal programs, while the inhabitants of red states are just the opposite: they get more back from Washington than they send. In other words, blue states subsidize red ones. What’s less well known is the Affordable Care Act (Obamacare) makes the blue-state subsidy of red states even bigger – or at least that was the idea. But in reality, blue states aren’t subsidizing red because so many red states have refused to expand Medicaid under the act (even though the federal government picks up 100% of the tab for the first three years and over 90% thereafter). In fact, since everyone, even in red states, has to pay more Medicare payroll tax and higher capital gains taxes to finance Obamacare, red states may well end up subsidizing blue-state Obamacare. (And if the Supreme Court decides that the inhabitants of states with federal exchanges don’t qualify for Obamacare at all, the red state subsidy of blue-state Obamacare will be even bigger.)
Posted on: Wed, 31 Dec 2014 22:32:11 +0000
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