Eastern Hemisphere Winners from ACA Western Hemisphere Winners and Losers from Obamacare

Depending upon what counts as a tax or fee, in a direct manner the ACA imposes at least 19 new taxes on individuals and businesses.  The tax increases range from an increase in the tax on investment income to a tax on young Americans choosing to spend money on more productive economic activities.  The direct cost increases imposed by Obamacare amount to about $500 billion.  The other half of the cost of Obamacare is covered through deficit spending.As almost everyone is aware, the Affordable Care Act (ACA or Obamacare) increases the cost of doing business in the United States.  Although there are benefits to the ACA, this article takes a look at how the new taxes, fees, and reporting requirements affect the competitiveness of businesses contending on an international level.  The cost increases imposed by ACA don’t make the story look pretty, and there will be some shifting of business activity to various countries, such as China, India, and many others.

Which tax increases cause the largest decrease in economic activity and lower job growth?  Although unknown, in analyzing the numbers, the top eight are probably the culprits, providing a boost to the East Asian, South American, and Eastern European economies.

To address the question of which countries’ businesses are the likely winners, the author analyzed trade statistics for trading partners and estimated, based on his best knowledge, what countries are competitive on the margin.  The results indicate that the big winners are countries with low cost labor and/or competitive biotechnology sectors, such as Singapore, China, and India.  Of course, not surprisingly, there are losers as well.  Besides the United States, the losing countries tend to be those with large economic activity dependent upon American tourism, such as the Bermudas or the Bahamas (please note that countries can show up on the loser list even though certain businesses within the country tend to be winners at the expense of U.S. businesses).  The results are shown graphically in the 3D charts at the top of this article or in the 2D chart preceding this paragraph.  In the 3D chart, the downward extrusion (or red color) represents the amount of forgone business (bad) and the upward extrusion (green color) represents business gained.  In the 2D chart, the more red the country, the greater “losing” effect ACA has on its economy, and the greater the green, the greater “winning” effect ACA has on its economy.  The country winners/losers analysis is just an initial look, but the idea is true, by and large, that many countries are co-losers with the United States and that foreign businesses gain at the expense of American businesses.

On the whole, Americans should be glad most jobs are not off-shoreable, at least not in the near future.