Biggest tax hike in U.S. history? "Obamacare," says GOP U.S. Senate candidate Mark Neumann

Among Republicans, if there’s a topic as hot as the record-breaking heat of the summer of 2012, it’s President Barack Obama’s health care reform law.

"I think it's the worst piece of legislation that's been passed in my lifetime," former Republican Wisconsin congressman Mark Neumann said. "It's stopping business from growing and creating jobs. It's the biggest tax increase in American history, likely to bankrupt this country by spending $2.6 trillion; $500 billion taken out of Medicare; the list just goes on and on and on."

Neumann, who is running in the August 2012 primary for the U.S. Senate, went on at some length about his first TV ad -- which hits "Obamacare" -- during a July 10, 2012 interview with WTMJ-AM’s Charlie Sykes, a conservative talk show host in Milwaukee.

But we’ll zero in on the boldest claim made by Neumann -- that the law is "the biggest tax increase in American history."

Neumann’s evidence

Neumann campaign manager Chip Englander cited a July 2010 article by FactCheck.org, a project based at the University of Pennsylvania. It concluded that "as measured by the rather useless yardstick of raw dollars, with no adjustment for inflation," the Affordable Care Act could be the largest tax hike in U.S. history.

At $76.8 billion in 2014, the law would be the largest one-year tax increase in raw dollars since 1968, FactCheck.org said, using U.S. Treasury data.

But Neuman ignores what the article goes on to say: "that attack is misleading, and the raw-dollar measure is a poor way to measure the size of a tax increase." The reason is the simple fact of inflation, which means a dollar today is worth less than one years ago.

Adjusting for inflation, a 1982 tax hike under GOP President Ronald Reagan is the largest tax increase ($85.3 billion), and Obama’s health reform law drops to fourth ($71.7 billion), FactCheck.org found.

And using what it called the best yardstick -- the amount of revenue raised in one year as a percentage of gross domestic product -- the health law ranks as the seventh-largest tax hike since 1968.

The article’s conclusion: "There’s no way the ACA’s tax and other revenue increases come close to being the largest in U.S. history."

Englander also cited a Forbes opinion column that claims the reform law is the largest tax increase if both the premiums people pay for health insurance and the penalties paid by those who don’t get insurance are considered taxes.

But premiums paid to insurance companies obviously are not the same as taxes paid to the government.

(On July 24, 2012, Neumann claimed a new Congressional Budget Office analysis found the law will increase taxes by $100 billion "more than anticipated." But the analysis focused on the June 2012 U.S. Supreme Court ruling on the law, which had effects on Medicaid, but didn’t make major changes to tax provisions. The new analysis found, according to the National Journal, that the law is $84 billion cheaper and that repealing it would worsen the federal deficit by $109 billion over 10 years.)

Other evidence

Before the FactCheck.org article was published, our colleagues at PolitiFact National also did some digging in rating as Pants on Fire an even bolder claim by Rush Limbaugh -- that the reform law is "the largest tax increase in the history of the world."

They found that the health law is tied for fifth among the largest tax hikes between 1968 and 2006 as a percentage of gross domestic product. That includes the law’s penalty for not having insurance.

That makes Obama’s health law a big tax increase, but not biggest.

Our rating

Neumann said "Obamacare" is the biggest tax increase in American history."

But even the article he uses as evidence states flatly that the health care reform law is not the biggest, and that to cite raw dollars, as Neumann does, is misleading. More reliable measures put the law among the largest tax hikes, but not at the top.

We rate Neumann’s statement False.

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Eric Hovde

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Editor's note (July 25, 2012): The original version of this article incorrectly stated that the health reform law (rather than the repeal of it) would add an estimated $109 billion to the deficit.