Republican Tax Increase to Pay for Health Insurance
Written by Sam on July 26th, 2007
“For anybody not under a government health program, it provides the resources to access health coverage,” Burr said in an interview this morning.
The proposal calls for raising money by taxing the health-care benefits that many workers now receive through their employers. Those health premiums now are tax-free.
The money then would be used by the U.S. Treasury to offer refundable tax credits. Individuals would receive $2,160, or up to $5,400 per family.
For those with employment-based coverage, the credits would be enough to cover the tax bill on all but the richest insurance plans, Burr said.
For people without employment-based health care, the tax credits could be used to pay for private health insurance or other health-care costs.
Putting aside the fact that the Federal Government has absolutely no business whatsoever being involved in anyone’s health care, this bill is a tax increase. Sure, they may give you a credit, if I am reading this right, when you file your taxes, but that is after the end of the year when you get your lump sum refund. The tax will be steadily coming out of your check throughout the year I assume, so you are paying piece by piece each week and waiting for the government to give you your money back later on. No thanks.
Besides, I don’t see this passing the Senate anyway, because when they say the credit will cover the cost of all but the richest health care plans, they are talking about union members. The Democrats will never go for that.
27
PM
So the government is currently giving tax breaks to companies. Now it proposes giving those tax breaks to individuals in the form of a credit. I think the important question is: How much is the Tax?
Wouldn’t it be better to have every individual acting as their own economic agent, forcing insurance companies to compete?
27
PM
Well, for mindless minions to the free enterprise system like you guys, this should be exactly what you’re after. Jack is quite right — basically, it would end any tax subsidy for employer-provided insurance, just returning the money to individuals and letting them find their own insurance.
I suspect that, if this happened, the private insurance industy would unravel in 5 years or less. Currently, employers can basically force people to risk pool because they’re better off with employer-provided insurance as a result of the tax subsidy. However, adverse selection would quickly cause the market to unravel if each individual bought his own insurance.
I guess this is the opposite of “starve the beast.” If you think there’s an outcry for a single-payer system now, just wait until you implement this plan and half the country can’t get insurance!