Health Care Catastrophe
By: Daniel Murdock
Even though working Americans would pay trillions more in additional taxes, Washington continues to press forward with plans for health care reform. There are numerous proposals on how to raise the necessary funds, but Senator Max Baucus’ (D-Mont.) plan to “limit allowable tax free health benefits” has garnered the most attention.
According to congressional documents, the federal government would apply extra taxes on Americans who make over a $100,000 or whose health tax benefits exceeded a specified amount. Such a tax would not only apply to health insurance premiums, but would also affect supplemental insurance and health savings accounts. Tens of millions of taxpayers, from single workers to families, would face significantly higher tax bills.
While the proposal to tax health benefits could face tough opposition, Senator Baucus’ scheme includes blatantly unfair loopholes to appease his traditional supporters. His plan would place union workers, who have won generous health benefits through hard fought collective bargaining, in a favorable health tax bracket. This is in comparison to all other Americans who would feel the full force of a new tax.
The Congressional Joint Committee on Taxation believes that taxes on health benefits could supply the necessary revenue to support Obama’s health care plans; however, the voting public should be extremely skeptical about the administration’s claims to be able to fix health care. Veteran health care, controlled and managed by the federal government, has been a complete failure. Similarly, government run Social Security, Medicare, and Medicaid are on the path to total collapse. While the Obama administration may categorize government insurance programs as necessary, such intrusion is unlikely to reduce costs or provide better coverage. Instead, government insurance programs will extinguish competition. Taxes on health benefits would also provide an incentive for companies and individuals to reduce the value of their health care benefits, resulting in less tax revenue than anticipated. Consequently, the federal government would have to find additional revenue sources. These proposed changes to the health care system are neither necessary nor affordable.