To hear the 'baggers talk about it, Papa Joe has risen from his grave and is now running the United States. Zombie Mussolini and Zombie Mao are sharing the spoils. The HCR bill must be overturned for these vague and unspecified reasons that boil down to "socialism" and "loss of freedom".
Now why would anyone, let alone a non-rich fool at a 'bagger meetup, worry about the real contents of the law, especially with the Reconciliation fixes? Do they really mourn the loss of insurance companies' right to rescind or deny coverage? Do they pine for the donut hole?
Of course there is a real change in the law which upsets some influential right-wingers. And it's something we progressives should be very happy about. As is so often the case, it's the money.
Almost everyone pays lip service to guaranteed issue, meaning no denial of coverage due to preexisting conditions. But the insurance companies demanded universal coverage, lest people buy coverage only when sick. (I don't believe this would be true, but they do, and they have enough clout over Congress and the press to make it the conventional wisdom.)
Universal coverage means that somebody has to pay. An employer mandate would upset the right, so in keeping with Republican ideals, HCR merely encourages employers with tax credits and, for the largest ones, minor penalties. Instead it focuses on an individual mandate. But insurance is too expensive for most individuals to buy. So subsidies are needed in order to make an individual mandate work. And that's a lot of dough. So it has to come from somewhere. Democrats don't just raise the structural deficit the way Republicans do. (They're accused of it by Republicans, of course, but the latter are projecting.)
So the HCR bill and in particular the Reconciliation part (Obama sidecar) have a funding mechanism that meets the letter and spirit of Obama's campaign promise: If your income is less than $250k/year (per couple, or $200k individual), a/k/a The Threshold, then your taxes don't go up. Above that, you pay.
This takes two parts. Right now there's a Medicare tax, I think 1.45%, on all earned income. Reconciliation raises this by 0.9% on income above The Threshold. So if you are single and make a million bucks a year, you pay an extra $7.2k. That's not chump change but it's the other part that really wins: There's a new 3.8% Medicare tax on unearned income (interest, dividends, capital gains, annuities, royalties and rents) for the above-Threshold types.
Really rich people don't make most of their money from salaries. Even the CEO class gets much of its compensation in the form of stock, which translates to a capital gain after a year. Hedge fund zillionaires make it as "investment" income, usually disguised as long-term capital gains. And this is all targeted head-on by the 3.8% tax, which is slightly less than what the House wanted but wasn't included in the Senate bill at all. So if a tycoon makes $10M in dividends and interest from his portfolio in Mountaintop Removal Coal Co. and Cheap Labor Dirty Abbatoirs Ltd., then it's now subject to $380k/year in new taxes!
This finally reverses decades of tax cuts for the rich. Under that hard-core Bolehevik Eisenhower, the top tax rate was 90%, and it applied to dividends and interest, as well as short-term capital gains and half of long-term gains. Under Pinko Reagan, it was around 50%. But the Shrub got the dividend tax rate to 15%. So Warren Buffet could rightly complain that his tax rate was lower than his secretary's. The new 3.8% tax begins, just begins, to turn that around. It is literally progressive, in both the tax sense and the political sense.
This is what the 'baggers are all upset about. They don't know it, of course: The rich Foxies have scared them into a dither with generalizations and lies. The very rich have once again mobilized members of the working class to work against their own interests. You don't see 'baggers whining about "I want my unearned income back"! Now some of them may fall into the Lottery Mentality, where they think that they're going to be rich some day, and will want to keep it all. Others may fall into the "know my place" mentality. This goes along with my earlier diary about the roots of conservatism. Their version of an ordered society wants the rich to be really, really rich, and thus they, as commoners, will nonetheless gladly give of themselves to get the prince even nicer fineries. This "worker ant" mentality is nutty to us but is probably on display right now.
So let's celebrate the small progress we've made. The HCR bill is far from perfect, but we've pushed tax policy towards being just a bit more progressive, and in so doing we've shifted the Overton Window a notch away from the far right. And that is what's driving the top-0.1-percenters crazy.