John Schnatter, the founder and CEO of Papa John’s Pizza, has announced that as soon as Obamacare takes effect, the price of a large pepperoni pizza (and other pizza’s, wings, etc., I’m sure) will increase by a whopping 14 cents!
The idea of a large pizza’s price increasing by by 14 cents doesn’t sound like a big deal of course. You probably lose more change in your couch weekly. The problem isn’t that the price of a pizza will increase; the problem is that the price of many similar goods will become more expensive as well. Obamacare is essentially a huge tax on employers. What do employers do when they face a huge tax? They pass on as much of it as possible to consumers through higher prices on their goods.
The funny thing is that a lot of people are actually surprised by and pissed off at Papa John’s actions. But where’s the surprise? There’s no reason to be surprised, especially given that tax incidence analyses have been around for centuries. Whenever federal or state governments increase taxes on corporations and/or businesses, a proportion of the taxes fall onto the consumer, resulting in a lower quantity demanded as well as dead weight loss. Some people are angry at Papa John’s and other businesses because it doesn’t provide many of its employees with a good health plan? Ok. Well now with your help, Papa John’s and numerous other businesses will provide healthcare (not that it’ll be of particularly high quality).
In conclusion, as a result of Obamacare, people will not only have to pay higher taxes and premiums, but higher prices for everyday goods as well. I wonder what the actual projected cost of Obamacare would be if the total increases in prices of goods could be calculated and added onto the already monstrously high projected cost.
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