Biden gets four Pinocchios for tax lie

posted at 11:33 am on September 26, 2008 by Ed Morrissey
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Joe Biden told a Greensburg, PA crowd yesterday that John McCain planned the biggest middle-class tax increase in history in his health-insurance plan, but Biden told half the story and a full-blown lie.  The Washington Post caught him at it, and gave the Democratic VP candidate four Pinocchios in its fact-checking blog.  Here’s Biden at work, lying to Pennsylvanians:

John McCain and Sarah Palin “are proposing the largest increase on middle class taxpayers in American history….It will cost the middle class over one trillion dollars in additional taxes. It is almost unbelievable.” –Joe Biden campaign rally, Greensburg, PA. September 25, 2008.

Actually, it is unbelievable — and extremely disingenuous.  Biden described only a part of McCain’s plan to tax health benefits, and neglected to demonstrate how it actually works.  Michael Dobbs explains:

John McCain wants to drastically overhaul the health insurance system in order to encourage Americans to go out and buy their own health care plans rather than relying on employer-based plans. To achieve this, he plans to tax employer-provided health benefits and provide a $2,500 tax credit ($5,000 for families) toward the cost of health insurance.

By most independent calculations, the McCain plan will leave most taxpayers better off in strictly financial terms, at least until 2013. After 2013, the benefits will begin to diminish. By 2018, taxpayers in the top quintile will be slightly worse off, but middle-income taxpayers will either break even or be slightly ahead. According to the non-partisan Tax Policy Center, the McCain proposals will result in a net benefit of $1,241 to the average tax payer in 2009, $895 in 2013, and $386 in 2018.

“It is not fair to pull out just one part of the McCain proposal,” said Eric Toder, a TPC analyst. “It is a package. They are giving back more than they are taking away.”

What makes this especially egregious is that this plan addresses the self-employed uninsured, one of the Democrats’ supposed policy priorities, by breaking the lock on employees and their health insurance.  The balance of the tax credit allows people to negotiate for health insurance on their own, making their health insurance completely portable and disconnected from their employment.  This also allows people to take more risks in starting new businesses and self-employment.  Meanwhile, it also allows employers to eventually get out of the health-insurance business and have consumers bear the true costs in order to make the market more rational and competitive.

One can argue as to whether this plan is effective, but one thing that it isn’t is a massive new tax burden on the middle class.  As the TPC notes, it actually lessens the tax burden on the middle class for the foreseeable future.  It also puts capital into a free-market environment, which will open new opportunities in health insurance and allow people to get as much or as little insurance as they need or desire.  McCain’s plan would not increase costs or decrease revenues while it solves one of the biggest stumbling blocks in making health insurance accessible to all.

Biden and Barack Obama simply can’t compete with that plan.  Instead, they just lie about it in order to scare voters, but the real fear is that McCain could take leadership on health care from their own statist, top-down, Medicare-Squared approach.  Four Pinocchios may not be enough for this lie.

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