Obama: Hey, maybe we should tax health-care benefits
posted at 8:40 pm on June 3, 2009 by Allahpundit
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I dimly recall a promise being made during the campaign that people who make less than $250,000 a year wouldn’t be paying any new taxes. Did I imagine that? It’s all a jumble in my mind with Joe the Plumber’s tax problems and the fact that Joe the Plumber’s first name isn’t really Joe and the scandalous revelation that Joe the Plumber doesn’t have a plumber’s license.
I think I did imagine it. The richest one percent is going to pay for everything from now on, right?
Senate Finance Committee Chairman Max Baucus (D-Mont.) said Obama expressed a willingness to consider changing the existing tax exclusion. The decision would probably anger liberal supporters such as labor unions, but such a tax change would raise enormous sums of money as Congress and the White House are struggling to find the estimated $1.2 trillion needed to pay for health-care reform over the next decade.
“Yeah, it’s something that he might consider,” Baucus told reporters after the meeting between Obama and Democratic lawmakers. “That was discussed. It’s on the table.” Obama had summoned about two dozen senators to the White House to keep up the pressure to enact a comprehensive health-care overhaul this year…
Private-sector businesses spend about $518 billion a year on their workers’ health insurance, benefits that are not taxed. If workers had to pay taxes on their health coverage, it would raise $246 billion in revenue each year, according to the congressional Joint Committee on Taxation…
Nevertheless, the issue represents treacherous politics for Obama, given his attacks on Sen. John McCain (R-Ariz.), who advocated a similar approach during the campaign.
Am I misunderstanding or would this be a tax aimed specifically at people who don’t need or use government health insurance? If you’re already getting benefits from your employer, you’re opting out of ObamaCare, no? Or is the whole idea here that once ObamaCare’s in effect, businesses will cancel their private insurance and force employees to opt into universal health care? In which case, er, where’s all the revenue from taxing health benefits coming from? I’m missing something.
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Democrats suddenly become ultra-pro-life. More taxpayers, please.
ThePrez on June 3, 2009 at 9:00 PM
No, they suddenly throw open the doors and anyone who wants to immediately becomes a citizen.
Follow the paths, they all lead back to destruction.
Bishop on June 3, 2009 at 10:24 PM
boomer on June 3, 2009 at 10:19 PM
Thank lawyers like John Edwards.
faol on June 3, 2009 at 10:26 PM
No problem, the coming Chinese superpower will protect you and hug you and kiss you and love you forever (and never use you up)”.
What’s a little subjugation so long as we don’t have to pay for that mean old military industrial complex, so we can instead pay our
billsChi comm credit card?Speakup on June 3, 2009 at 10:26 PM
I’m an attorney and CPA and I’ve spent my career in the world of investment banking, hedge funds, and private equity, etc. Tell your mother I’m almost certain a depression is on the way and many of my colleagues believe the same thing because the math has finally caught up with us. However, I believe this depression will be worse than the 30’s because, among other factors, Americans are no longer self-sufficient and we’re burdened with debt we can never repay. I don’t want to believe any of this, but I can’t ignore what I know and see. I really hope I’m wrong. I hope those in charge figure out a way to kick the can down the road one more time, but I don’t expect that because they would have to defy their Keynesian impulses. I fear it’s too late.
flyfisher on June 3, 2009 at 10:36 PM
“Nevertheless, the issue represents treacherous politics for Obama, given his attacks on Sen. John McCain (R-Ariz.), who advocated a similar approach during the campaign.”
treacherous politics….
How does a guy who has the entire MSM guarding his image, his policies, his gaffes and his staff have anything coming close to treacherous politics??
I happened to glance at the politics/opinion page with this story on it today at the WaPo. It was buried 75% through the story.
Treacherous politics are something that a politician would play if we had a skeptical press keeping him in check. Obama has now reversed on a very harsh criticism he made of John McCain. A young journalist who wanted to earn his spurs would run this to ground and hound the WH with it.
We’ll see if that happens…. (not holding my breath…)
ted c on June 3, 2009 at 10:36 PM
all right, sweepea. How’s this for way too much:
1. Dermatologist charging 8,000 dollars for one visit and some biopsies. Normal charge: about 900 bucks.
2. Midwife charging upwards of 12,000 dollars for delivering a baby. Normal charge (including post partum visits 3000 bucks.
3. Pathologists double and triple charging people for exactly the same lab tests over and over again
4. Patients and doctors scamming medicare/Medicaid/insurance for MILLIONS of dollars by claiming procedures that weren’t actually done.
Healthcare fraud is a billion dollar a year business and no one seems to care that there are doctors who will screw you over for a couple of thousand dollars in a heartbeat.
Of course if you don’t know anything about the inner workings of health care, maybe you shouldn’t play “devil’s advocate” with someone who is waist deep in it….
mjk on June 3, 2009 at 11:03 PM
Does anyone remember what cost G.H.W. Bush reelection? the first 3 words were “Read my lips”
2012 can’t come soon enough.
Pablo on June 3, 2009 at 11:16 PM
Are you shorting the market? I’ve got a somewhat similar background (not law school, but business school) and I tend to agree with what you’re forecasting, but my rational response is “If you can’t beat ‘em, make some money off ‘em”. If we’re going to get hit with deflation, the only way to grow your assets is to bet on falling asset prices, no?
venividivici on June 3, 2009 at 11:17 PM
I seem to recall Obama claiming during the campaign that the average American family would save in the neighborhood of $1500/yr with his health care plan. So how does he reconcile that statement with a possible VAT tax, a Cap & Trade tax, and a tax on my health care benefits? The GOP better open their GD mouths and start tearing into this guy and the Democrats. If any of this gets through they had better promise on the campaign trail next year that they will undo this mess.
DerKrieger on June 3, 2009 at 11:19 PM
We just need to get to 2010 and make enough gains to make Obama a lame duck.
DerKrieger on June 3, 2009 at 11:20 PM
Are they proposing a 50% tax rate on health benefits? If so I may have to sell my house and move into an apartment.
DerKrieger on June 3, 2009 at 11:21 PM
And there’s none of this torturous lethal injection crap with the Chinese. They humanely have one guy pull your arms tight behind your back while another guy caps you point blank with an AK47. Very humane the commies are. I guess families tend to go close coffin after that, but hey, the Chinese and Marxist/Communists are going to show us the way.
BTW, wasn’t taxing health care benefits what obamas said was John McCain’s dirty little secret during the town hall debate.
Suckahs
hawkdriver on June 3, 2009 at 11:21 PM
No matter how you slice this, we can not afford universal healthcare or indeed any more entitlements.
I love the taxing healthcare benefits. WHAT MORONS. They start taxing my healthcare benfits, guess what? I immediately give up my health care. I can’t afford my taxes now. THEN you’ve got gettlefinger saying that the union is just glad that their members gets to keep their health care and pensions. WTF?
Does the right hand know what the left is doing?
ORconservative on June 3, 2009 at 11:28 PM
I agree with you, I’m in the deflation camp. I was short most of last year. but right now you’ve got to be so careful. We’ve been in a typical bear market rally. I’m convinced I know what’s coming (generally). What I’m uncertain of is the timing. I feel confident the market will sink like a stone. I just don’t know when, so I’m not short any more. Instead I’m jumping in and out, scarfing profits here and there, trading on short term momentum. Buy and hold is a thing of the past.
flyfisher on June 4, 2009 at 12:04 AM
Joe Biden spoke out against John McCain taxing health care benfits in September 2008.
Then there were all of those ads criticizing John McCain for the same reason.
And, of course, Barack Obama criticized McCain too.
Barack Obama’s promises expire faster than dairy products at room temperature.
VibrioCocci on June 4, 2009 at 12:13 AM
I can’t believe we still have the Social Security ceiling. I thought the idiot would do that day 1.
Remember:
To Republicans, every day is the 4th of July; to democrats, every day is April 15th…
Ltlgeneral64 on June 4, 2009 at 12:13 AM
Oh, but will they call you “George”?
Sapwolf on June 4, 2009 at 12:21 AM
Medical billing is a lot more complex than this suggests. The only way that insurance companies “regulate” the price of healthcare is by negotiating to hold the price down. They are actually much better able to negotiate the price of your healthcare since they’re big enough to have some pull.
So why don’t they keep the price of healthcare lower? At least partly because the hospitals and doctors on the other side know exactly what they’re doing, and are pre-emptively raising their rates so they can still make a decent profit when managed care insists on a 85% discount.
I worked at a hospital in a city where United Healthcare was just trying to penetrate. Since they saw the coming of managed care, and knew that this particular company and other HMO’s would demand huge discounts, the very first thing they did was to raise the rates on everything across the board. After all, 10% of $200 was a lot better than 10% of $150. Do those numbers across the board for all hospital services, and pre-emptively raising the rates made the difference between operating in the red and operating in the black.
BTW, this was a non-profit hospital.
There are ways to cut costs, though. One huge thing is tort reform. Doctors have literally gone out of business rather than pay the malpractice insurance required to protect themselves against lawsuits.
At one point, before tort reform was passed in Mississippi, a billboard on I-55 going north from Jackson, MS advised you to drive carefully, since there was no longer a brain surgeon practicing between there and Memphis. (It was a billboard calling for tort reform, and a very effective one.)
The big problem with insurance is that it’s usually available only through your employer, and effectively subsidized through the government. So the insurance company is the only one seeing your actual healthcare costs, which does not encourage people to be thrift in using healthcare.
ThereGoesTheNeighborhood on June 4, 2009 at 12:39 AM
Ted,
Anyone who brings this up will be met with, “Well, it’s the same thing that McCain proposed, and you supported him, so why do you have a problem with it now?”
But you are absolutely correct. Just another example of hypocrisy from Dear Leader.
By the end of this year, anyone who has not become a fiscal conservative (or at least lost that hope and change feeling) has to be either a complete idiot, or been asleep for a couple of years. Look at New Jersey and California – people are (finally) rejecting oppressive taxes and these insane spending deficit policies.
UltimateBob on June 4, 2009 at 12:50 AM
When they removed the end user from paying the bill up front, price lost its sensitivity in Health Care. I have been self pay for almost 2 decades now, and have paid my own insurance premiums for the past decade (I couldn’t get coverage before that). I am very aware of the prices. Most people are not.
karenhasfreedom on June 4, 2009 at 1:11 AM
Where’s the best place to be in a deflationary economy? Commodities? I keep reading/receiving conflicting advice.
I figure it’s not long until 401(k)s and traditional IRAs go the way of the do-do bird as well, which will leave us all saving on our own for retirement. Do you — or does anyone else? — think it would be wise to convert everything to a Roth now?
NoLeftTurn on June 4, 2009 at 1:24 AM
I’ll give you a hint… keep a sharp eye on the bond markets. When it gets to the point where no corporation can sell bonds to finance their operations the real credit crisis will hit us with a vengeance.
The Sh%t will hit the fan completely by 2011-2012 if not before. I’d guess that’s our time frame. If the Feds start raising interest rates… well… it’s time to cash your chips and ride out the storm.
Why do I say this: well, all this debt has to be funded by either other nations buying our Treasury bills, or by the Federal reserve printing cash and inflating the system. Either leads to less bond buyers. If by inflation, bonds wont be bought because everyone will know they’ll be worth far less when they get their money back. The only alternative is to sell the T-Bonds and that picture doesn’t look pretty either: If they go that route, they WILL have to raise the interest rate because we’re finding less and less buyers. The T-bonds have to have a higher rate of return in order to be attractive enough to prospective buyers. Raising interest rates during a period of economic growth post recession could drive us into another one! It’s analogous to a tax increase because it will keep corporations from getting the cash they need to grow.
Either way, the corporate bond market is socked.
Chaz706 on June 4, 2009 at 1:33 AM
ABC my friend… Anything But Cash (or Cash based goods for that matter). Stuff of real value will come in handy.
Chaz706 on June 4, 2009 at 1:34 AM
And on a final note when it comes to the Economy:
Beware the Debt Star.
It’s effects on the Economy are starting to make it the 4 trillion dollar white elephant no one wants to talk about.
But something tells me that surviving in the stock market will require something akin of a Jedi who can sense it’s next moves, and their effects on the Economy.
May the force be with you! Always!
Chaz706 on June 4, 2009 at 1:42 AM
You’re not missing anything AP. This is democrat elite thinking. If that’s not an oxymoron I’ve never heard one!
Griz on June 4, 2009 at 1:52 AM
Heh. Feel duped yet, Obama voters? HOPEANDCHANGE!!
http://www.youtube.com/watch?v=11-2WMf1u7Q
Black Adam on June 4, 2009 at 3:12 AM
By my some what fuzzy math, this says they not only plan to tax our health care benefits, they intend to tax them at a rate of 47.5%. At that rate it in almost assured that people will have to opt in to the government plan.
MikeA on June 4, 2009 at 7:19 AM
No matter what you decide to invest in, get rid of your 401k and IRA. Liquididate them and pay the penalties if.
In 10 years or maybe even sooner Social Security will become a means tested program. Anyone who has $1 in 401s or IRA accounts will not be eligible as they are “rich” and don’t need it.
The absolute worst thing to do IMO is a Roth IRA. In theory that sounds good, tax free growth. But come on, do you really think the govt will let you take that money out without any taxes in 10, 20, 30 years?
angryed on June 4, 2009 at 7:43 AM
ABC in a deflationary environment…did I read that right? If you meant ABC when inflation comes, 100% agreed. If you meant ABC in deflation, you’re nuts. During deflation, cash is king.
angryed on June 4, 2009 at 7:45 AM
(Does anyone remember what cost G.H.W. Bush reelection? the first 3 words were “Read my lips”
2012 can’t come soon enough.
Pablo)
As ted c alluded to, that only works if you have a vigilant media dogging your steps. Ogabe has a fellating media, or didn’t you notice?
(We just need to get to 2010 and make enough gains to make Obama a lame duck.
DerKrieger)
I believe Ogabe’s plan is to have everybody terror-stricken and in fearful paralysis by then. He will blame the crash on GW Bush and claim to hold the key to salvation. The fellating media will paint him in shining armor atop a valiant steed ready to lead us to salvation. America proved in 2008 that we are stupid enough to buy that crap. Why wouldn’t it work?
SKYFOX on June 4, 2009 at 9:02 AM
I’ve read through every comment on this and have not seen any evidence that anyone here even understands what the proposal to tax the employer paid medical benefits actually means in comparison to McCain’s plan.
In comparing the proposal to McCain’s plan, the MSM is merely trying to defuse any opposition from Republicans by saying “Why object to this? After all, it’s only what McCain proposed.” In fact, while McCain proposed to tax the employer paid portion, he was also offering a $2500 to $5000 tax credit. Missing from the news about the Baucus proposal is any mention of a tax credit as this is strictly a revenue grab to pay for the new Obama care to the current uninsured.
If my own employer paid benefits were taxed, I would have to switch to the plan that cost them the less….an high deductible plan that utilizes a health saving account to try and escape from some of the tax. However, how long does anyone thing that HSA contributions would remain tax free?
JohnnyL on June 4, 2009 at 9:20 AM
Yes, you are missing something. You forgot to consider the unicorns.
bitsy on June 4, 2009 at 9:56 AM
Particularly guns, ammo, and provisions.
I’m stocking up on all of the above.
Not paranoid, just prepared.
UltimateBob on June 4, 2009 at 10:09 AM
Excellent points, JohnnyL
UltimateBob on June 4, 2009 at 10:10 AM
“How does a guy who has the entire MSM guarding his image, his policies, his gaffes and his staff have anything coming close to treacherous politics??”
That’s true on most things but people are going to notice that their paychecks are significantly less. I’ve written a lot of payroll software and there are many people that will call about their check being off by even a penny. That may sound like an exageration but it’s not and I promise you that it will be noticed without the MSM even bringing it up.
slug on June 4, 2009 at 10:11 AM
I have never taken an economics class, so logic and observation are my only tools to analyze current events. I’ve been certain for some time that a depression is coming, primarily because it is impossible for an economy to recover without incentive for businesses to hire new employees, and I see none on the horizon. It’s nice to hear someone with experience corroborate my conclusion, though I wish we both had a more optimistic view. No point in fooling ourselves, I suppose.
The question, I think, is how to prepare? You mentioned self-sufficiency: I think it’s worth my while to learn as many survival skills as possible, and stock up in the meantime on necessities that will be expensive once hyperinflation hits. Any other advice or suggestions people have would be appreciated. Thanks.
Animator Girl on June 4, 2009 at 11:25 AM
While stocking up on those “necessities” give some thought to reconsidering what that really means. Preparing for a long survival in social chaos is not the same thing as preparing for a couple of weeks after a hurricane or earthquake. Spare parts for firearms, ammo and reloading supplies, garden tools and seed, sewing kits and cloth, livestock and related equipment are all things to consider. You can only store so much food and water and it will eventually run out. The main thing to stockpile now is knowledge. That is the only thing you take with you where ever you go. With it you have hope. Without it you are a sheeple.
MikeA on June 4, 2009 at 1:26 PM
Some (most?) of you may be too young to recall, but taxing health care benefits was an idea floated during the first Obama administration, 1977-1981 by president Peanuts & Love.
I don’t recall exactly, perhaps it was Walter Williams or Thomas Sowell who wrote that Health Care Insurance as we know it first came about during the wage freezes imposed by FDR in the WW2 years. Employers couldn’t offer higher wages for the same work to attract better employees, so they offered benefits.
oldleprechaun on June 4, 2009 at 1:50 PM
Right, I agree. However, I assume that however much I prepare, such an unfamiliar style of living will have a bit of a learning curve – it’s worth it to me to have some food stockpiled to give me time to learn how to get more, depending on the circumstances. My main concern is purchasing a firearm – I need training, since I’ve never used one before, but the reality is that I don’t know if I can afford a gun, ammunition, and lessons while also saving for financial emergencies – I don’t make that much. Thanks for your thoughts, though. Anything else?
Animator Girl on June 4, 2009 at 2:52 PM
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