PolitiFact: Handel exaggerates Obamacare tax effect

PolitiFact last week looked at Georgia congresswoman Karen Handel’s characterization of the tax impact of Obamacare and at the New York attorney general’s statement that no court has ruled the DACA deferred deportation program unconstitutional. Summaries of our findings are here. Full versions can be found at www.politifact.com.

“The Affordable Care Act is the single largest tax increase in my lifetime.”

— Karen Handel on Wednesday, Aug. 30th, 2017 in a telephone town hall

We looked at the scale of the Affordable Care Act taxes and found that Handel is mistaken. In the dollar amounts, three tax measures topped the Obamacare tax increases. Relative to the size of the economy (using the metric of the gross domestic product) six tax increases were higher.

To fully test Handel’s statement, we picked the year with the highest amount for each bill.

With that approach, three tax increases were larger. The Revenue and Expenditure Control Act of 1968 (Johnson), the Tax Equity and Fiscal Responsibility Act of 1982 (Reagan) and the Omnibus Budget Reconciliation Act of 1993 (Clinton) ranked above the Affordable Care Act tax impact.

But using constant dollars misses a big piece of the picture.

A larger economy can absorb a higher tax hike, and the nation’s gross domestic product has grown a lot over the years. To compare apples to apples, we took the federal government’s data on gross domestic product and calculated the impact of each tax increase relative to the size of the economy. In 1982, for example, the $89.8 billion impact amounted to 1.14 percent of the nation’s gross domestic product.

Our ruling

Handel said the Affordable Care Act is the single largest tax increase in her lifetime. Using constant dollars, three tax laws ranked higher. Relative to the size of the U.S. economy and federal revenues the year before, six tax hikes were larger than those in the Affordable Care Act.

We rate this claim False.

“No court has held (Deferred Action for Childhood Arrivals) unconstitutional.”

— New York Attorney General Eric Schneiderman on Wednesday, Sept. 6, 2017 in an interview on The Rachel Maddow Show

We found Schneiderman is right: DACA’s constitutionality has not been determined by courts.

DACA is based on a June 2012 memorandum by Janet Napolitano, who was Secretary of the Department of Homeland Security. DACA is a policy, not a law. There’s debate among experts on whether DACA is constitutional, but there is agreement that no court has ruled on its constitutionality.

A lawsuit to challenge DACA was dismissed for lack of standing, and that decision was upheld by the U.S. Court of Appeals for the Fifth Circuit, said Anil Kalhan, an associate professor of law at Drexel University. “So there was never any adjudication on the merits,” he said.

Texas and 25 other states won a lawsuit against the Obama administration by having a federal district judge block implementation of an expanded version of DACA and another deportation reprieve program, and in 2016 the Supreme Court ruled 4-4, leaving that lower court ruling in place. But the temporary blocking those programs was not on constitutional grounds, Kalhan said, “but rather based on a conclusion that Obama administration should have instituted the policy using notice and comment rule-making, rather than using the more informal guidance document that it issued.”

A final, binding precedent even on that basis was not set either, since it was only a preliminary injunction and the Supreme Court deadlocked, Kalhan said.

Our ruling

While there is debate on the constitutionality of DACA, that has not been determined by courts.

We rate Schneiderman’s statement True.

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