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Economist Steve Moore explains how ObamaCare implementation will hurt small businesses, take-home pay, and upcoming tax regulations.
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-- -- Joining me now editorial board member and senior economics writer for the Wall Street Journal Stephen Moore.
What happened Steve and it was only going to be the rich people who saw lessen their paychecks you have wiped out we could see this coming a mile away and you're right it was supposed to be for people in the top two or 3% but actually.
A 100% of workers are paying higher taxes.
A starting now by the way people are starting to observe it in the first paychecks they're getting.
This year because of course that payroll tax went -- it's gone up by two percentage points set.
You make 50000 dollars a year -- that makes you middle income worker.
Your -- and another thousand dollars a year because of this tax increase so it takes a real bite out of peoples and cops.
Yet and get get the same time.
In all fairness it was -- holidays must be a one your holiday.
Then it to your holiday so it's always I was kind of amazed that they actually did say we're getting rid of the holiday and we're bringing back -- -- payroll tax.
Ax while you know that the this is the problem with the with holidays is that they -- -- eight.
And that's one it was supposed to.
Create all of these jobs of course it didn't work it didn't work much better than the -- economic stimulus plan -- Yet although the problem with all of this is that you know we keep accumulating this enormous debt.
A top that is we just raise the debt ceiling by.
What another 500 billion dollars for rough few months and the question is whether we can continue with these taxing and spending policies in the future when were.
Bob borrowing over a trillion dollars a year.
Yeah but let me ask you is an economist Stephen because I.
I'm right there with you -- -- when we got the holiday and the taxes went down.
That I said she'd just doesn't seem like it's a lot of money that's gonna actually do anything to stimulate the economy.
Some but when -- it would gig add up eight bucks for you -- eight bucks county and eight bucks for the next guy it adds up to a pretty big number.
And I suspect there probably was some and I'm thinking small -- UBS if -- -- small increase.
So if that's the case.
At the small increase in the economy right it -- now that we we've taken it away is it really gonna make that much of a difference to the economy is it didn't make much of a difference when they gave us -- -- -- Look I think on the martian I agree with your analysis at the very margin this is gonna hurt employment I think it's gonna hurt the economy but.
Not nearly as much as the taxes on businesses I mean let's go back to the tax increases you're talking about earlier that.
That that the tax on the top you know two or 3% of people are making over quarter million dollars.
To you know two out of three of those people are business owners Tom -- of their investors and businesses and my real concern is when you take money out of those business says.
It -- -- it leads them to hire fewer workers not more workers self.
I think -- those business taxes are gonna have a more negative impact on the economy and on hiring.
That they -- the increase in the payroll well.
So there's another item on on your paycheck when -- -- you're looking to see -- the gross and you take out you know for the federal tax in this state aspect.
But the other one that's in there there's not a tax but man alive is that people screaming about this -- -- is your health insurance.
It has skyrocketed.
And that means.
Joseph and Jane have a lot less money in their paycheck and -- on the on the net take home.
-- you are exactly right about that you know -- that we've seen over the last eight to ten years very little increase.
-- take home pay for workers you know we just haven't seen those.
Pay increases that workers have become become accustomed to and would like to see -- year after year.
And by my analysis about 80% of the reason -- workers aren't getting the kind of robust pay increases that they would like to see.
Is because the money that would go to pay increases -- is going to pay for those health insurance premiums you know somebody has to pay support the business pays for it.
A lot of time it comes out of the worker -- -- and this is one of the biggest problems with the US economy I'm not convinced that obamacare is gonna do much about.
Reducing those premiums in fact they -- increase by over 2000 dollars since we passed obamacare.
Yeah I don't know were.
I think the president doesn't really better vice DC he not he did say it wants he said it numerous times your premiums are gonna go down by 2500 and they've and they haven't.
On how that but they've gone up by closer to 2500 but and this is kind of a sharp turn in our conversations Stephen but.
A year from now there will be a lot of companies are gonna have to make some hard decisions about whether they're gonna offer health insurance.
I don't I think that's right a -- if there's going to be a lot more than we think they'll say you know.
You might wind up with more pay your -- your paycheck is I'm not gonna take any money out if I'm Robin offer health insurance.
BI and I think what's gonna happen under that scenario in your at all so right about that is more more employers are gonna push.
The year workers in -- they kind of government run says stop.
That and think about this you know the one of the selling points of Obama care -- two or three years ago was you don't feel like the insurance you -- you get to keep it.
Which hell out of the employers don't provided any lottery you don't get to keep -- that's a problem and the other one related to our conversation top.
If for employers that have over fifty workers all of these new regulations on health care -- yet.
I'm talking to a lot of employers who say I'm up 49 -- at -- 49 -- No number of employees yup -- people who kept their employees up 49 workers because they don't want to hire that fiftieth worker because of all these new.
I think it is attacks and I don't know I mean it it's not billed as I know the Supreme Court said you know -- exactly but -- but on the on what it comes to people just going home with their paycheck and there's a lot of people that are talking about it the water cooler say and I'm getting less so you've got the 401K.
Gap which were lot of people had already paid their amount but maybe maybe.
-- part of but that's not attack that the -- so that's a good thing but but the rest of that is.
What is they're going to be a rebellion because I think a lot of people are going and it happens every time we're only gonna raise taxes on those people and it always seems to affect everybody that they get yeah about it.
There's an old saying help it if it quacks like a duck duck and looks like a duck and sounds like about it isn't actually it has I think this is attacks increased.
Happy new year folks your paycheck just went down by 2% at like at 2%.
Pay cut.
That workers but got because of this payroll tax so it's it's not starting off at such a happy new year will.
Well you know let's keep our fingers crossed you know there's some signs of recovery in this economy right now the housing sector is really starting to boom.
You know the energy sector is really doing while we're starting to see a little pick up of retail sales self.
Keep your fingers crossed I think we despite all the -- that government is putting on the back of importers.
We're starting to see some of those signs of recovery -- as an economist so it's gotta make it very difficult.
To do a lot of what normally economist but I do in their projections -- to rule overall.
Paul -- over the map now they've changed -- I agree with that and you know I think if it weren't for Washington top Tom.
I would be projecting a very strong 2013 I mean I think we can be wrong at 45%.
Growth potentially except you've got all these regulation we talked about all these new taxes those are slowing down the rate of growth that we need we need to get back deport 5% growth.
Eight to get worker paychecks up and be to get a doubt that sit down because what worries is that there's explode as the economy is -- per point so it's a vicious circle and -- He's 3% your magic number -- -- if we add 3% used to that about breakeven as far as the economy growing strong enough to add jobs.
Up 3% -- out 3% is pretty good you know we should get 4% because remember pump think about how -- this economy slid into a recession how much GDP -- -- -- just once one last statistic to think about.
We're still four million job short today.
Of where where where where we're we're -- 2007.
Yes six years four million fewer jobs that's a big problem and.
