It is vitally important that our readers circulate this information as widely as possible. Barack Obama, with his own words, conceded the health care reform issue to John McCain.
- Just one last point I want to make, since Senator McCain talked about providing a $5,000 health credit. Now, what he doesn’t tell you is that he intends to, for the first time in history, tax health benefits.
So you may end up getting a $5,000 tax credit. Here’s the only problem: Your employer now has to pay taxes on the health care that you’re getting from your employer. And if you end up losing your health care from your employer, you’ve got to go out on the open market and try to buy it.
It is not a good deal for the American people. But it’s an example of this notion that the market can always solve everything and that the less regulation we have, the better off we’re going to be.
To begin with, Hillary Clinton’s supporters should note the similarity between the McCain plan and the Clinton plan. Per hillaryclinton.com/feature/healthcareplan/summary.aspx (still available at archive.org),
- [Hillary Clinton]: A Net Tax Cut for American Taxpayers: The plan offers tens of millions of Americans a new tax credit to make premiums affordable-which more than offsets the increased revenues from the Plan’s provisions to limit the employer tax exclusion for health care and discontinue portions of the Bush tax cuts for those making over $250,000. Thus, the plan provides a net tax cut for American taxpayers.
John McCain’s plan is almost identical, although all employer-provided health benefits would apparently be taxable as Obama says. Even so, the progressive income tax structure would make the program far more valuable to lower and middle income workers than to high income workers.
- [McCain]: While still having the option of employer-based coverage, every family will receive a direct refundable tax credit – effectively cash – of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider. Those obtaining innovative insurance that costs less than the credit can deposit the remainder in expanded Health Savings Accounts.
Obama’s own statement shows his total lack of understanding of the issue–or perhaps he thinks his listeners are so ignorant that they don’t understand it. To recap, “Here’s the only problem: Your employer now has to pay taxes on the health care that you’re getting from your employer. And if you end up losing your health care from your employer, you’ve got to go out on the open market and try to buy it.” Here are the only, although numerous, problems with Obama’s statement.
- The top income tax bracket is 35% for 2008 so, if you are a single person who makes over $349,701, your employer-provided health benefits would have to cost $7143 before the taxes you pay outweigh the $2500 credit. A family policy would have to cost $14286 before the tax outweighed the $5000 tax credit. On the other hand, if you are in the 25% bracket ($31,851 to $77,100), it is almost inconceivable that the tax on your employer-provided benefits–if you get them at all–would exceed the value of the tax credit. In other words, the McCain plan benefits Middle America, the same demographic that Obama’s party claims to represent.
- If you don’t get employer-provided health care, and millions of workers do not, the McCain plan puts you $2500 (single) or $5000 (family) ahead of where you are now, in after-tax money.
- If you lose your job or change employers, you still have the tax credit with which to buy health insurance.
- The tax credit gives you the complete freedom to change insurers–we have done this twice in five or so years in response to hefty premium increases–if your insurer does something you don’t like.
Obama’s own words therefore shows that he either lacks the competence to address health care reform, or that he lacks the integrity to tell the truth about the McCain plan.
- “Your employer now has to pay taxes on the health care that you’re getting from your employer.” If your employer gives you any benefits at all, and the tax credit will more than offset any taxes except perhaps for executives in the highest income brackets.
- “And if you end up losing your health care from your employer, you’ve got to go out on the open market and try to buy it.” Which will be a lot easier if you get the tax credit from the McCain plan than if you get nothing, which is currently be the case.
We expect the remaining debates to be be equally entertaining, with the Anointed One bumbling and stumbling as he attempts to stand up to Captain (USN, retired) McCain without a teleprompter or cheat sheet to feed him answers to tough questions.