Tags: Obamacare | less | work | cliffs

Investors Business Daily Report: Obamacare Encourages Less Work

By    |   Tuesday, 23 Oct 2012 07:49 AM

Obamacare will usher in four “steep cliffs” that are bound to impact working and hiring decisions, according to Investors Business Daily (IBD).

“In the time of Caesar, all roads lead to Rome,” IBD said. “In the time of Obamacare, seemingly every parth heads straight for a cliff. The health law is filled with cliffs where the returns for more work take a nose dive.”

IBD said a regulatory disadvantage kicks in for some small businesses when they hire a 50th employee: for companies with 49 employees that do not offer employee health coverage, the hiring of employee number 50 would carry a $40,000 penalty.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

Even for those small companies that do offer coverage, the companies can be charged up to $3,000 for each employee whose out-of-pocket Obamacare coverage exceeds more than 9.5 percent of the employee’s household income.

IBD compared the regulatory impact of the Obamacare 50th employee rule to a similar experience with government oversight in France, where there are 2.4 times as many French businesses with 49 employees than with 50 because of additional labor costs and regulations that kick in with the 50th hire.

For those at the low-income level, IBD reported a family at 200 percent of the federal poverty level (FPL) would pay $830 less for subsidized insurance than a family at 225 percent of poverty would. But higher taxes and smaller subsidies would discourage the family earning less to try to earn more.

For those at the moderate-income level, families at 400 percent of the FPL, would lose eligibility altogether for Obamacare subsidies, another disincentive to work more.

Finally, IBD cited what it called an “older workers’ cliff” on Obamacare, in which workers who retire and claim Social Security would see their Obamacare premium subsidy rise with almost no deductible — potentially encouraging early retirement among those who are still able.

“The drag Obamacare has had on the economy has been hard to quantify in the two-plus years since it became law, because so many of its economy- and job-altering provisions had yet to be written,” Kyle Wingfield, a political commentator for The Atlanta Journal-Constitution. “But that’s changing, and the law’s negative impact on the economy is becoming clearer.”

According to the Orlando Sentinel, Darden Restaurants — owners of about 2,000 outlets including the Red Lobster and Olive Garden chains — is studying ways to shift more employees under the 30-hour-a-week ceiling at which employee must provide health coverage under Obamacare.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

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Obamacare will usher in four “steep cliffs” that are bound to impact working and hiring decisions, according to Investors Business Daily (IBD).
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