Backpedaling on Health Care Reform

June 8, 2009 at 3:47 pm Leave a comment

  Look, this kind of tax reduction causes businesses to cut benefits and/or force employees to choose less functional plans.  It’s a back-track on at least 3 campaign promises on a topic that is a ‘top 3’ issue to many voters.  For most, health care and taxes are at the top of the concerns – even above the war in Iraq, homeland security, and evironment.  By my count: (1) There were promises not to raise income taxes.  Now, with other cuts this proposed increase might be offset – but then what’s the point anyway?  (2) There were promises not to tax health insurance costs.  (3) There were promises to improve health care coverage and affordability.   

I know I’m jumping the gun.  I know this is only a proposal.  But to even say that taxing an extremely over-priced & still-sky-rocketing product like health insurance is extremely disappointing.  I don’t really care if this was Reagan’s idea and in fact it may be further evidence that’s is a bad idea. 

Health insurance ‘haves’ to pay for ‘have-nots’?

The idea of limiting the tax break for employer-provided insurance gained momentum last week, when Obama told senators that he’d consider it as one ingredient of the health insurance reform bill he wants Congress to pass by early August, when the Senate starts a one-month recess. While details of such an approach are still sketchy, it would likely involve employees paying tax on a percentage of their employer-provided health benefits. 

Scolding McCain in their debate on Oct. 15, Obama said, “This is your plan, John. For the first time in history, you will be taxing people’s health-care benefits.”

The tax exemption on employer-provided health insurance, which dates to 1943, has already survived one attempt to limit it. An echo of Ronald Reagan In 1984, President Ronald Reagan floated the idea of requiring workers to pay taxes on employer contributions to their health insurance exceeding $2,100 a year. A Washington Post editorial the following year called the proposal “surprisingly lucrative yet eminently fair,” and speculated that “(it) might have helped hold down health care costs in the bargain.” But opposition, especially from labor unions, scuttled the proposal.


Entry filed under: Politics. Tags: , , , , , .

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